A Comparison of Subsidiary Company and Branch Office and Representative Office in Hong Kong -- Hong Kong Business -- kaizen
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A Comparison of Subsidiary Company and Branch Office and Representative Office in Hong Kong

A Comparison of Subsidiary Company and Branch Office
and Representative Office in Hong Kong


Entity
Subsidiary Company Branch Office (Non-Hong Kong Company) Representative Office
Entity Name Need not be the same as parent company Must be the same as parent company Must be the same as parent company
Business Activities Allowed Can conduct all business activities Must be the same business activities as the parent company Can only conduct market research or coordinating activities
Suitable For For local or foreign companies who wish to expand their operations in Hong Kong For foreign companies who wish to expand their operations in Hong Kong For foreign companies who wish to set up temporary vehicle in Hong Kong to conduct research and act as liaison office
Disadvantages Continuing compliance obligations e.g. financial reports, audit, AGMs, annual filings, etc. Continuing compliance obligations e.g. financial reports, audit, annual filings, etc. It is a temporary vehicle and cannot generate revenue
Ownership Can be 100% foreign or locally owned Just an extension of its parent company Just a temporary administrative arrangement
Separate Legal Entity Yes No No
Cap on Number of Members Yes, max 50 Not applicable Not applicable
Minimum Setting up Requirement One shareholder , which can be foreign or local individual or corporate shareholder AND must have at least one individual director Must have one Hong Kong resident agent No special requirements
Entity Subsidiary Company Branch Office (Non-Hong Kong Company) Representative Office
Limited Liability Yes No No
Audit Accounts Yes Yes, if parent’s accounts is also required to be audited No
Filing of Annual Return with CR Yes Yes No
Annual Filing Must file audited report of the Hong Kong subsidiary with IRD Must file branch office’s as well as parent company’s accounts or audited reports with IRD Not Applicable
Taxation Taxed as Hong Kong resident entity, local tax benefits eligible Taxed as Hong Kong resident entity, local tax benefits eligible Not Applicable
Cessation of Business upon Death of a Member No. Equity shares go on in perpetuity No Not Applicable
Validity Period Perpetually until deregistered Perpetually until deregistered No restrictions on the duration
Usual Registration Time Actual registration with CR and IRD can be done in 1 day. Preparation of incorporation documents will require about 1 day Actual registration with CR and IRD can be done within 2 to 4 weeks. Preparation of incorporation documents will require about 1 day Actual registration with IRD can be done in 1 day
Appointment of Officers Must appoint at least one individual director Must appoint one resident agent No special requirements
Governing Body CR & IRD CR & IRD CR & IRD
Bank Account Can open bank account in Hong Kong Can open bank account in Hong Kong Can open bank account in Hong Kong in the name of the foreign parent company
Registration Costs Hong Kong Company Registration Package #HKLLC05 Hong Kong Branch Office Registration Costs Hong Kong Representative Office Registration Costs

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