Frequently asked questions about setting up a Hong Kong company

Q1. What are the minimum requirements for setting up a Hong Kong private company?

The minimum requirements are:
(1) One individual or corporate shareholder
(2) One individual or corporate director
(3) A company secretary
(4) A registered office address in Hong Kong (post office box not allowed)
(5) Auditors
(6) A Business Registration Certificate

The same person can be the secretary, director and shareholder of a company, except that the sole director of a company cannot also be the secretary of the company.

There is no prescribed minimum share capital. For practical purposes, this is not usually less than HK$10,000 or the equivalent in a foreign currency. There is a capital duty of 0.1% payable on the authorised share capital (subject to a cap of HK$30,000).

Q2. Does any officer of a Hong Kong company need to be resident or ordinarily resided in Hong Kong?

There is no any such requirement on the director and shareholder. However, the company secretary must be either an individual resident in Hong Kong or another Hong Kong limited company and the auditors must be a firm of Hong Kong registered certified public accountants.

Please note that no corporate director is allowed in the case of a private company which is a member of a group of companies of which a listed company is a member.

Q3. Can the share capital of a Hong Kong company be denominated in foreign currency?

Yes. It is also possible to change of denomination of currency of the share capital though slightly complicated.

Q4. Is there any capital duty on issuance of shares?
There is no capital duty on issuance of shares at par value. Capital duty of 0.1% is payable on the amount of premium at which shares are issued above par value (subject to a cap of HKD30,000). Please click here for methods of calculation of capital duty.

Q5. Can I purchase a ready-to-use shelf (readymade) company from Kaizen?

Yes. We can provide a list of ready-to-use shelf companies upon request.

Our fee for preparing initial setting up documents including directors?resolutions and completing relevant forms to effect the appointment of first directors, secretary, transfer of initial subscriber share, etc. for a simple structure is normally fixed. Please click here to browse the detailed procedures and costs for the registration of a Hong Kong local company.

Q6. If I want to incorporate a company with a specific name, should I use a shelf company and change the name or should I ask to incorporate a company with the specific name?

Either is possible unless you need a company to be in existence immediately. Most prefer to incorporate a brand new company with the specific name. This will take approximately four working days. Similarly, it will take approximately four working days to change the name of a company already in existence.

Q7. I do not want my details as shareholder and director to appear on the public record. What can I do?

You can use a nominee shareholder to hold the share(s) on your behalf. We can provide the service of a nominee corporate shareholder. You can also appoint a nominee director to act on your instructions. We can provide the service of a nominee corporate director. Alternatively, we suggest that you consider setting up a company in a offshore jurisdiction first and use the offshore company as the shareholder and director of your Hong Kong company.

Q8. Can Kaizen arrange to open a bank account for my Hong Kong incorporated company?

Yes, we are a quailifed intermediary of HSBC Hong Kong and we can assist you to set up a corporate account for your Hong Kong company without your physical presence in Hong Kong. Please refer to our bank account opening services.

Q9. Do I need to open a bank account for my Hong Kong company?

No. The laws do not require a Hong Kong incorporated company to open bank account and do not impose any restriction as to where it could open bank account or the number of bank accounts it could open.

Q10. Do I need to appoint an auditor for my company before I can start to do business?

No. However, an auditor of the company must be appointed within 18 months of incorporation of the company (i.e. before the first annual general meeting of the company), as audited accounts will have to be presented to the members in the annual general meeting.

Q11. What licences does a company need before it can conduct business in Hong Kong?

Certain types of business may need additional forms of licence other than the Certificate of Incorporation and Business Registration Certificate. Please visit the homepage of Business Licence Information Service (https://www.success.tid.gov.hk/tid/eng/blics/menu.jsp) for more information.

Q12. What are the continuing compliance requirements of a Hong Kong company? What if I fail to meet those requirements?

A Hong Kong company must hold an annual general meeting in every calendar year when, among other things, the audited accounts of the company are adopted. An annual return of the company must also be filed with the Companies Registry every year. A Hong Kong company must also notify the Companies Registry of any special resolution passed (other than that to change the company’s name), the creation of a charge over certain assets and any change which may occur in the information contained in the documents already filed. The changes of a company which require notification include:

(1) increase of decrease of share capital
(2) Change in par value of shares
(3) change of directors and/or secretary and/or their personal particulars
(4) allotment of shares
(5) change of company name
(6) alteration of the Memorandum and Articles of Association
(7) resignation of auditors
(8) change of registered office

If a company fails to comply with such requirements, the company and every officer of the company who is in default shall be liable to a fine and/or imprisonment.

To avoid liability, it is recommended that a professional company secretarial firm, like Kaizen, be used. Kaizen is a registered public accounting firm and can offer the service of company secretarial and registered office for an annual appointment fee.

Q13. Instead of setting up a Hong Kong company, can I use a company in my home jurisdiction to conduct business in Hong Kong?

Yes. You can carry out business in Hong Kong in the name of one of the companies registered in your home country by registering the foreign company as a non-Hong Kong company (branch office) within one month of establishing a place of business in Hong Kong. Kaizen can handle the registration on your behalf. Please click here for detailed procedures and costs for the registration of a non-Hong Kong company (branch office).

The tax rate on profit derived in Hong Kong is the same for Hong Kong and foreign companies.

Q14. Can I purchase a Chinese company from Kaizen ‘off the shelf?(China readymade company)?

There are no shelf Chinese companies avaialble for immediate delivery. However, Kaizen has significant experience in China business registration and maintenance matters and will be able to set up a suitable China business entity for your specific needs.