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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