There are different types of business entities available in Hong Kong such as:
- LIMITED LIABILITY COMPANY
- SOLE PROPRIETORSHIP
Among the above business entities, the private limited liability company is the most common type of business entity registered in Hong Kong.
Many foreign investors prefer limited liability companies as an offshore company in Hong Kong because it is a separate legal entity with limited liability for its owners.
What Are the Basic Requirements for Company Registration in Hong Kong?
1. Company name
Having a Hong Kong limited company’s name is part of the requirements in registering a Hong Kong company and company formation Hong Kong.
Company name can be in English or in Chinese, or in both languages. However, the combination of Chinese and English characters is not allowed for Company Registration.
The company name must have the word “Limited” at the end.
2. Directors of Limited Company
- Minimum number of director required: 1
- Maximum number of directors required: unlimited
- At least one director must be a natural person who must be at least 18 years old.
- He or she can be a foreigner and Hong Kong non-resident.
- He or she is not bankrupt or convicted for criminal offences.
- No requirement that directors also being shareholders.
- Board of Directors meetings can hold at anywhere across the globe.
3. Shareholders of Limited Company
- Minimum number of shareholder required: 1
- Maximum number of shareholders required for a private company: 50
- The shareholder(s) can be an individual or a company.
- For individual shareholder, he or she is at least 18 years old.
- For individual shareholder, he or she can be a foreigner and Hong Kong non-resident.
- A director and shareholder can be the same person.
- 100% foreign shareholding is allowed. There is no foreign shareholding restrictions.
- You can hold shareholders’ meetings at anywhere across the globe.
4. Significant Controllers Register and Designated Representative
- The Significant Controllers Register can be kept in hard-copy or electronic form. It is required to be available for review in the company’s Hong Kong Registered Office Address or a designated place in Hong Kong.
- The Significant Controllers Register contains the particular details of the person(s) who have significant controlling interest to the company.
- The company is responsible to obtain and identify the up-to-date information of its Significant Controller(s).
- The company is responsible to prepare and keep the register available for law enforcement officers’ inspection.
- The company must appoint at least one person as the company’s Designated Representative.
- The person is responsible to provide assistance for law enforcement officers to access the company’s Significant Controllers Register.
- The person must be a Hong Kong resident aged 18 or above, who can be the company’s shareholder, director, or an employee of the company; or Hong Kong accounting / legal professional, or registered licensee of “Hong Kong Trust and Company Service Provider”.
5. Company Secretary
- A mandatory requirement to appoint company secretary when registering a Hong Kong company.
- If the secretary is an individual, he or she needs to ordinarily reside in Hong Kong.
- If the company secretary is a body corporate, its business place or registered office address must be in Hong Kong.
- If the company has only a sole shareholder and director, he or she cannot acts also as the company secretary of the company.
6. Share Capital
- No minimum share capital amount requirement for companies registered in Hong Kong.
- Share capital is not limited to the Hong Kong Dollar and can be expressed in any major currency.
- Shares can be transferred freely (subject to a stamp duty fee).
- The usual practice for companies registered in Hong Kong is to have at least one shareholder with 10,000 ordinary shares being issued.
- Issued Share Capital (commonly known as paid-up capital) is the portion of share capital which is issued and subscribed by the shareholders.
7. Registered Address
- Local Hong Kong address is required as the company registered address.
- A P.O. Box cannot be treated as the registered company address.
- Only a valid physical address is accepted as the registered address of the company.
8. Public Information
- Public information refers to information about shareholder(s), director(s), and company secretary.
- It is a mandatory requirement to update your company officer(s) details with the Hong Kong Company Registry.
- Under the two-tier profits tax rates regime, Corporate profits tax rate for the first HKD2 million of assessable profits is 8.25%. Assessable profits above HKD2 million is subject to tax rate of 16.5%.
- Hong Kong taxation system is on territorial basis.
- Only profits generated from Hong Kong are subjected to Hong Kong’s profits tax.
- No capital gains tax, no dividend withholding tax, and no GST/VAT.
10. Annual compliance requirement
- Annual audit of accounts by HK Practicing Certified Public Accountants is a mandatory requirement. Private Limited Company must file its audited accounts and profit tax return annually with IRD, Inland Revenue Department.
- All company must file annual returns with CR, Companies Registry and pay the annual business registration fee (BR Fee).
- The HK Business Registration Certificate must be renewed annually or once every three years, a month before expiry.
- Annual General Meeting (“AGM”) must be held every financial year. Company must hold its AGM within 9 months after its financial year end date. In the case of the first financial period which is longer than 12 months, the company must hold its AGM within 9 months after the first anniversary of the company’s incorporation ; or 3 months after the end of that financial period, whichever is the later.
- A company can dispense with the holding of AGMs by a written resolution or a resolution at a general meeting passed by all members. Also, a single member company is not required to hold an AGM.