HONG KONG COMPANY GUIDANCE
There are three different types of business entities available in Hong Kong:
1) LIMITED LIABILITY COMPANY
2) SOLE PROPRIETORSHIP
3) PARTNERSHIP
Among the four 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 English company name must have the word “Limited”.
2. Directors of Limited Company
a) Minimum number directors required: one
b) Maximum number directors required: unlimited
c) At least one director must be a natural person who must be at least 18 years old.
d) He or she can be a foreigner and Hong Kong non- resident.
e) He or she is not bankrupt or convicted for criminal offences.
f) No requirement that directors also is shareholders.
g) Board of Directors meetings can hold at anywhere across the globe.
3. Shareholders of Limited Company
a) Minimum number of shareholders required: 1
b) Maximum number of shareholders required: 50
c) The shareholder(s) can be a person or a company.
d) The shareholder(s) is at least 18 years old.
e) The shareholder(s) can be a foreigner and Hong Kong non-resident.
f) A director and shareholder(s) can be the same or different person.
g) 100% Foreign or local shareholding is allowed. There is no foreign shareholding restrictions.
h) Nominee shareholders is allowed for Hong Kong companies.
i) You can hold shareholders’ meetings at anywhere across the globe.
4. Significant Controllers Register and Designated Representative
a) The Significant Controllers Register can be kept in hard-copy or electronic form store in the company’s Hong Kong Registered Office Address or a place in Hong Kong.
b) The Significant Controllers Register contains the particular details of the person(s) who have significant controlling interest to the company.
c) The company is responsible to obtain and identify the up-to-date information of its Significant Controller(s).
d) The company is responsible to prepare and keep the register available for law enforcement officers’ inspection.
e) The company must appoint at least one person as the company’s Designated Representative.
f) The person is responsible to provide assistance for law enforcement officers to access the company’s Significant Controllers Register.
g) The person must be either:
Hong Kong resident aged 18 or above, who is the company’s shareholder, director, or an employee of the company; or Hong Kong accounting / legal professional, or registered licensee of “Hong Kong
Trust of Company Service Provider”
5. Company Secretary
a) A mandatory requirement to appoint company secretary when registering a Hong Kong company.
b) If the secretary is an individual, he or she need to be an ordinarily reside in Hong Kong.
c) If the company secretary is body corporate, its business place or registered office address must be in Hong Kong.
d) If the company has only sole director, he cannot himself acts also as the company secretary of the company.
e) Appointment of a nominee company secretary is allowed.
6. Share Capital
a) No share capital minimum amount requirement for register company in Hong Kong.
b) Share capital is not limited to the Hong Kong Dollar and can be expressed in any major currency.
c) Shares can be transferred freely (subject to a stamp duty fee).
d) The usual practice for companies registered in Hong Kong to have at least one shareholder with one ordinary share be issued.
e) 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
a) Local Hong Kong address is required as the company registered address.
b) A P.O. Box cannot be treated as the registered company address.
c) Only a valid physical address is accepted as the registered address of the company.
8. Public Information
a) Public information refers to information about shareholder(s), director(s), and company secretary.
b) It is a mandatory requirement to update your company officer(s) details with the Hong Kong RC (Registrar of Companies).
c) In the case you want to have more confidentiality, you can opt to appoint a nominee
corporate shareholder and nominee director.
9. Taxation
a) Under the two-tiered profits tax rates regime, Corporate proifts tax rate for the first $2 million of assessable profits is 8.25%. Assessable profits above $2 million is subject to tax rate of 16.5%.
b) Hong Kong taxation system is on territorial basis.
c) Only profits generated from Hong Kong are subjected to Hong Kong’s income tax.
d) No capital gains tax, no dividend withholding tax, and no GST/VAT.
10. Annual compliance requirement
a) Annual audit of accounts by HK Certified Public Accountants is a mandatory requirement. Private Limited Company must file its audited accounts and income tax return annually with IRD, Inland Revenue Department.
b) All company must file annual returns with CR, Companies Registry and pay the annual business registration fee (BR Fee).
c) The HK Business Registration Certificate must be renewed annually or once every three years, a month before expiry.
d) 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.
e) 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.
