Hong Kong Company Registration
Q1. What are the advantages of using limited companies to engage in
commercial activities in Hong Kong?
A1.
Limited companies are companies with limited liabilities. From a
legal perspective, a limited company is a separate legal entity and thus
has the capacity to institute proceedings against others or vice versa.
Since the liability of shareholders is limited to the nominal value of
their shareholdings, the maximum possible loss of the shareholders could
only be the total sum of their investments. Generally speaking, the
directors and shareholders of the companies are not personally liable
for the debts of the company.
Where the investors prefer to adopt other forms, such as sole
proprietor or partnership, to run their businesses, the liabilities of
the investors are unlimited. The creditors can hence institute legal
proceedings directly against the investors. Where the investors cannot
repay the debts, the investors are forced into personal bankruptcy.
Nevertheless, incorporating and running a limited company is
comparatively more costly.
Q2. What are the conditions of establishing
a limited company?
A2.
A limited company must have at least 1 shareholder, 1 director, a
company secretary and a registered office situated in Hong Kong. Any
person (natural or legal person) can at the same time be a
shareholder, a director and also a secretary. If the secretary is an
individual person, there are no restrictions on his nationality but
he must reside in Hong Kong. There are no restrictions on the
nationality and domicile of the shareholder and director. The
executive body of a company is its board of directors, responsible
for the daily running of the company and implementing the decisions
in the annual general meeting (AGM). The AGM is the highest body of
a company. It must be held at least once a year and must not be held
more than 18 months since the last AGM.
There is no upper limit of the capital of limited companies, but it
must not less than 1 Hong Kong dollars.
Q3.
What can I do if I want to start business
quickly?
A3. If investors wish to start business
quickly and cannot spend time for establishing limited companies,
they can acquire, through law firms, CPA firms or professional
agents like Kaizen Corporate Services Limited, ready-made shell
companies that have not commenced business and thus have no
liabilities or debts. The shell companies have been registered in
the Companies Registry and have acquired the Certificate of
Incorporation. The fees are more or less the same as for fresh
incorporation and the procedures can be completed in a day. After
the completion of the above procedures, the company must obtain a
Business Registration Certificate from the Business Registration
Office in order to engage in commercial activities.
Q4.
General information about taxation in Hong Kong
A4. The direct taxes of the government
are profits tax, salaries tax and property tax.
Hong Kong operates a territorial basis of taxation under which only
profits or income arising in Hong Kong are taxable. The current
corporate profits tax rate is 17.5%. There is no tax on capital
gains.
Salaries tax is imposed on income arising in Hong Kong from any
office or employment. Tax payable is calculated on a sliding scale
that progresses from 2% - 15%.
Property tax rate on 15% on rentals received less an allowance of
20% for repairs and maintenance. Corporations that pay profits tax
on their rental income are exempt from property tax.
Q5. How to
incorporate a limited company in Hong Kong to engage in commercial
activities?
A5. To form a limited company, 1 or more
persons (natural and legal persons) may subscribe to the memorandum
of association and submit the memorandum, together with other
required documents, to the Companies Registry.
I. Registration of the Company:
| 1. |
Choose an intended company name.
|
| 2. |
Check the intended company name:
The applicants must go to the Companies Registry to check
whether the intended company name is the same as one already
registered. If yes, the intended company name must be
changed.
|
| 3. |
Submit required documents:
Registration requires the submission to the Registrar of the
following documents:
| a) |
the memorandum of
association of the intended company containing:
| -the
name of the company |
| - |
domicile of the
company |
| - |
the capital of
the company
|
| - |
the signature of at least 2 persons described
as 'subscribers' in the presence of a
witness who attests the signature |
| - |
the number of
shares taken up by subscribers |
|
| b) |
the articles of
association of the intended company establishing the
rules of the company
|
| c) |
a statutory declaration
declaring compliance with the registration
requirements of the ordinance
|
| d) |
a covering letter
indicating the name of the company, the presentor's
name, contact telephone number, fax number and
address
|
|
| 4. |
Payment of the company
registration fees to the Companies Registry
|
| 5. |
Collect certificate of
incorporation
Under normal circumstances the certificate of incorporation
will be issued in about 6 working days. At this stage a
company is basically incorporated. Since the company cannot
engage in commercial activities, it is known as a 'shell
company'. |
II. Business Registration:
A new business must be registered with Business Registration Office
of the Inland Revenue Department within one month of its
commencement.
1.Submit the required documents: The applicant should submit form
1(b) together with a photocopy of the certificate of incorporation
by post or by hand to the Business Registration Office.
2. Pay the business registration fees and levies for insolvency fund
and protection of wages to the Inland Revenue Department
3.Collect the business registration certificate: For applications
over the counter, the certificate will be issued within 30 minutes
of receipt of properly completed application. For applications by
post, the certificate will be issued within 2 working days.
Q6. How could
an oversea company establish a branch office in Hong Kong?
A6. There are 2 common business forms
for foreign investors in Hong Kong: registration of the branches,
representatives or other offices of the overseas companies;
incorporation of registered limited liability companies (subsidiary
companies incorporated in Hong Kong). There are no controls on
foreign direct investment by means of the regulation of foreign
corporations that carry on businesses in Hong Kong and the choice
between the above 2 methods are merely business decision.
I. Application of Visas
Foreign investors coming to Hong Kong for business must apply to
the Immigration Department for visas at the applicants' local
Embassy of the People's Republic of China. The issue of visas is
completely under the discretion of the Immigration Department.
II. Registration of the Company
Part XI of the Companies Ordinance requires that a foreign company
that has established a place of business in Hong Kong must register
as an 'oversea' company with the Registrar within a month from the
commence of business.
| 1. |
Submit the required documents:
| a) |
the constitution of the
foreign corporation |
| b) |
Form F1
| the particulars
of directors and secretary
|
| the particulars
of one or more persons resident in Hong Kong
to accept service of process on behalf of
the company and to file annual returns |
| the principal
place of business in Hong Kong and in the
place of incorporation
|
| the registered
office in the place of incorporation
|
|
| c) |
the company's certificate
of incorporation
|
| d) |
the latest accounts of
the company
|
|
| 2. |
Pay the company registration
fees to the Company Registry
The amount of the fees is the same as the amount payable
for the establishment of a limited company.
|
| 3. |
Collect the certificate of
registration
Normally the certificate of registration will be issued in
about 29 working days.
|
III. Business Registration
An overseas company that commences its business in Hong Kong
before the registration with the Companies Registry has been
completed can nevertheless apply for business registration within
one month of such commencement.
1.Submit required documents: The applicant is required to submit
form 1(b) and a copy of the overseas certificate of incorporation by
post or by hand to the Business Registration Office.
2. Pay the business registration fee to the Inland Revenue
Department
3. Collect the business registration certificate
4.For applications over the counter, the certificate will be
issued within 30 minutes of receipt of properly completed
application. For applications by post, the certificate will be
issued within 2 working days.
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