The Hong Kong Company in Detail
Die Gesellschafts-Gründung in Hongkong und ihre Besonderheiten
The most widely used company type in Hong Kong is the Private Limited Company or "Limited" or "Ltd.". A private limited company can be set up by a domestic or foreign person or company and registered with the Companies Registrar without the shareholder(s) having to be present in Hong Kong. A company is owned by the shareholder(s), who is/are entitled to the profits of the company.
The shareholder(s) must nominate at least one director, who represents the company. He/she does not have to be a resident of Hong Kong. Shareholder(s) and director(s) can be identical.
It is possible to appoint nominee shareholders and directors. Upon request we provide them for our clients.
The company requires a Secretary and a Registered Office. Both must have an address in Hong Kong.
The administration of a Hong Kong Company is easy. The law (Companies Ordinance, Chapter 32, Laws of Hong Kong) allows Hong Kong companies to locate their office anywhere in the world. Only the registered office must be in Hong Kong.
Once a year, the company must file an Annual Return confirming the current shareholders and directors In addition, an annual financial statement, the Annual Return, must be submitted. We assist our clients in preparing these documents and offer an effective reminder service.
If you plan to use your Hong Kong company outside the SAR, we prepare the application for the exemption from Hong Kong tax.
Any documents relating to changes of the directors, the address etc. will be handled by us and properly filed with the Companies Registrar.
A director represents the company and is responsible for all its business matters.
Director´s Duties vis-à-vis the Companies Registrar
- On–Time Filing of the Annual Report
- On-Time Filing of the Annual Return
- Notification of any changes of the Company (e.g. additional shareholders)
Directors are responsible for the proper filing. Upon you request, we are prepared to assist you.
- Preparation and Filing of the Annual Return (included in the Service Package)
- Annual Accounts (Reminder, Completing the Form, Filing (included in the Service package)
The Secretary is responsible for the records of the company and their safe keeping. He/she/it is the official company contact for government offices.Persons as well as companies may act as a Company Secretary.
- We provide a Secretary for your company.
Hong Kong laws require every company to have a registered office in the SAR. It is the company´s official legal residence in Hong Kong for receiving mail and the location where the books and records are kept.
The following documents must be kept at the Registered Office
- List of the Directors and the Secretary
- List of the Shareholders
- Lists are called "statutory books"
- Providing a Registered Office
The minimum capital of a Hong Kong private limited company is HK$1.00. You may increase the amount according to your requirements. In general, companies have a capital of HKD 10,000.
We recommend making a capital contribution by depositing the funds to the company´s account immediately after its formation.
The liability of a Hong Kong company is limited to its assets. Neither shareholders nor directors are personally liable.
There is an exemption to this rule in the event of criminal acts or violations of any obligations under insolvency rules.
There are no restrictions of the choice of a company name which can be selected in English, Chinese or in both languages. Nevertheless, there are "sensitive words" in a name which are either prohibited or require specific approvals based on additional qualifications, such as "bank", "insurance", "trust" et al.
If you prefer a suffix such as "holding" or "group", you might be required to show that the company is, indeed, part of a holding structure or belongs to a group of companies.
As with any corporate entity the location of the company´s "office" determines where it will be taxed. Such office is commonly where the registered address is located and/or where the business decisions are made. If the directors of a Hong Kong company work, for example, in Spain from a branch office there, the company is subject to both Hong Kong and Spanish tax at the local rates, possibly including local VAT.
If it maintains, however, a place of business in Hong Kong (the registered office is not suf-ficient) it can benefit from the low tax rate of 16.5% which might be reduced to zero if the profits are generated elsewhere (e.g. Spain).
The Annual Report and the Annual Accounts must be filed with the Companies Registrar and the Inland Revenue Department not later than 9 months after the close of every business year.
Usually, two government offices in Hong Kong deal with companies:
- Companies Registrar and
- Inland Revenue Department
A Hong Kong company is considered to be properly formed once it is recorded in the Companies Registry. It will be assigned a company number and receive a "Certificate of Incorporation". Any subsequent changes must be filed with the Companies Registrar and must be published in the Annual Accounts
When opening a bank account, it becomes apparent why Hong Kong is rightfully named "Asia´s Financial Center". Banking is easy and efficient. Nevertheless, strict money laundering laws require that directors with signature authority must be present at the bank for opening the account.
- Preparation of account opening forms and escorting you to the bank
- Account service by nominees