Understand the Jurisdictions Setup Requirement Before Proceed Your Company Registration in Hong Kong
Hong Kong is the financial and commercial centre of Asia, and as such, it has always been a magnet for investors keen on exploring the Asian markets. Its ease of access to Mainland China has also attracted a plethora of corporations and business with the desire to take advantage of the manufacturing prowess of China to trade with the rest of the world. It is also pleasing to know that the authorities have made company registration in Hong Kong a simple and straight forward process that enables investors to register their legal entities without any hassles.
Why Start a Business in Hong Kong
Other than being Asia’s commercial and financial centre, there are quite many reasons why investors are keen on starting a venture in Hong Kong, and which should also appeal to you if you have been considering starting a business in Asia. Some of the most notable ones, however, include the following:
Little Investment by Foreign Investors
Company registration in Hong Kong requires a comparative little investment by foreign investors. Investors are thus not burgeoned with the need to have high amounts of capital before they can begin to trade, invoice, hire staff, or transfer capital abroad. It is also essential to observe that the tax burden in Hong Kong is among the lowest in the world, and this means more profits for Hong Kong companies.
Gateway to Mainland China
The strategic location of Hong Kong makes it ideal for setting up a business to exploit the opportunities available in Mainland China. Irrespective of your business interest, it is highly lucrative to have easy access to Mainland China where you can obtain various goods and services to trade with the rest of the world.
Hong Kong has an international reputation for being one of the best cities to do business in the world. With the sound structures and legal systems, having a company in Hong Kong will make you tap into the reputation, and as such, the business will enjoy a lot of goodwill and trust.
No Foreign Exchange Controls
Hong Kong does not impose any restrictions on foreign exchange, and this allows for the free circulation of funds. This means that you will have the freedom to exchange foreign currencies as you want and credit operations will also be handled quickly and conveniently.
Simplified Taxation System
The tax rates for companies in Hong Kong are among the lowest in the world, and this is a convenience that every foreign investor will appreciate. It simply means more profits for the company.
Types of Legal Entities in Hong Kong
According to the new Hong Kong Companies Ordinance, the number of legal entities that can be registered in Hong Kong was reduced from eight to five. The current entities include the following:
- Private companies limited by shares
- Public companies limited by shares
- Private unlimited companies with a share capital
- Public unlimited companies with a share capital
- Companies limited by a guarantee with a share capital
The preferred entity for foreign investors keen on company registration in Hong Kong is the private companies limited by shares. It is usually a separate legal entity, and as such, it offers protection to the assets of the directors and the shareholders in case of any liabilities.
Basic Requirements for Registering a Company in Hong Kong
Here is a brief look at some of the basic requirements when thinking about company registration in Hong Kong:
- Directors – a minimum of one director and an unlimited maximum number of directors will be necessary when forming the company. The directors must, however, be a natural person and they don’t have to be a resident of Hong Kong.
- Shareholders – to form a private limited company in Hong Kong, a minimum of one shareholder and a maximum of 50 shareholders will apply. There are no requirements for the residency of the shareholders.
- Company secretary – it is a mandatory requirement to appoint a company secretary when forming a company in Hong Kong. The secretary, however, must be a resident of Hong Kong if they are an individual. And if they are a body corporate, then they must have a registered office in Hong Kong.
- Share Capital – There is no minimum share capital requirement for forming a business in Hong Kong. However, it is a general understanding that there will be at least one shareholder with one ordinary share at the inception of the business.
- Registered Address – for company registration in Hong Kong, the company must have a registered local Hong Kong address. The address has to be a physical address, and a PO Box is not acceptable.Taxation – the corporate tax rate in Hong Kong is 16.5% of all the assessable profits earned in Hong Kong. Hong Kong has a territorial tax system where tax is imposed only on the profits made from the operations of the business in Hong Kong.
How We Can Help You
The process of company registration in Hong Kong may appear simple, but that may not be the case for foreigners. There are specific requirements and documentation applicable based on the type of venture you are interested in starting.
If you are not aware of the specifics, you may end up spending a lot of time and money in the process. Consequently, it is prudent to get help from professional business formation executives to help you simplify the process. It is the easiest way to avoid missteps and get everything done right the very first time.
At 3E Accounting, we can help you with the entire process of company registration in Hong Kong. This will let you start doing business in Hong Kong in the shortest time possible. Contact us and let us kick begin the process of your Hong Kong company formation.