Company registration in Hong Kong and opening a corporate account for it is a project that many business persons can successfully implement. Yet there are some who are convinced that the procedure is too complicated, so they abandon such an idea almost immediately. How justified are these worries? In fact, they are absolutely groundless. Company registration in Hong Kong is not much different from any other arrangements associated with running a business. Opening a corporate account for a Hong Kong company with a proper bank is more challenging, but these difficulties are totally manageable.
Main Advantages of Company Registration in Hong Kong
There are many reasons in favor of incorporating a company in Hong Kong. Some of them will be of interest to large organizations with an extensive network of branches. Others will certainly be appreciated by small- and medium-sized businesses. Certain reasons will be relevant to offshore companies. Therefore we decided to discuss the general advantages of company registration in Hong Kong. Please be kindly reminded that you can always get any additional information on the subject from our experts during an individual consultation.
Why register a company in Hong Kong?
- Advantageous strategic location.
- Doing business in Hong Kong is easy.
- Company registration in Hong Kong is the gold standard for businesses that want to enter the Chinese market.
- Economic, political and financial stability.
- Company registration in Hong Kong makes opening a corporate bank account in Hong Kong much easier.
- Well-thought-out tax legislation.
- Well-developed infrastructure.
- Efficient legal system that protects and stimulates business development.
- It is possible to register a company in Hong Kong remotely, without visiting the jurisdiction.
- Qualified workforce.
- Foreigners can own and control a company in Hong Kong.
- Virtually no restrictions on the scope of business for a company in Hong Kong.
- Free economy.
- The shortest possible time for company registration in Hong Kong provided that the registration will be carried out by a competent agent. One is unlikely to succeed on one’s own.
- Numerous tax benefits and incentives.
- A simplified procedure for opening a corporate account for a Hong Kong company. Please note that opening a corporate bank account in Hong Kong for an outsider company is very challenging.
- Control of a corporate account can be effected remotely.
- No exchange controls in Hong Kong.
- No restrictions on investment in the economy and business in Hong Kong.
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Company Registration in Hong Kong
The most popular form of business organization when registering a company in Hong Kong is a limited company. Under the local laws, any person who applies for company registration in Hong Kong is simultaneously considered to be applying for business registration. Upon successful completion of the registration procedure, the Companies Registry of Hong Kong issues two documents, the Certificate of Incorporation and the Certificate of Business Registration. It takes about 2 weeks to register a company in Hong Kong. Opening a corporate account with a bank in Hong Kong will require more time, but not more than 6 weeks.
Basic requirements for company registration in Hong Kong:
- Company name. It requires approval before company registration in Hong Kong.
- The Significant Controllers Register has become mandatory from March 1, 2018 (incorporation, maintenance), excluding companies registered on HKSE (Hong Kong Stock Exchange).
- Designated Representative (DR). The position is mandatory. Their main task is to maintain and supervise reporting.
- Directors. Any company needs to have at least one director (natural person only. There is no restriction on the maximum number of directors. The requirements are standard: age over 18, no bankruptcy status, clean police record. A company in Hong Kong may also have a professional corporate director.
- Shareholders. From 1 to 50 people, natural persons or legal entities. Director and also be a shareholder. 100% foreign ownership of the company in Hong Kong is allowed, professional shareholders are allowed.
- Company Secretary. This position is mandatory. This can be a natural person or a legal entity (with residence or office in Hong Kong respectively). A company in Hong Kong can also hire a professional company secretary.
- Share capital. There are no formal requirements for its size. The only condition is that the company has at least one shareholder with one common share. Any currency can be chosen. Shares can be bought and sold, bearer shares are not allowed.
- Registered address. This also means physical address only. Post box is not allowed.
- Publicly available information. Details on the officers of a company in Hong Kong (director, shareholders, secretary) are publicly available.
- Taxation. Corporate tax for companies registered in Hong Kong is 16.5%. The territorial principle of taxation is used. No tax on capital gains, dividends and profit tax/VAT.
- Compliance. Keeping/drawing up of accounting reports, annual audit, submission of reports and tax returns to the Inland Revenue Department of Hong Kong, filing of annual reports to the Companies Registry of Hong Kong and payment of the annual registration fee are mandatory.
- Company Registration Certificate in Hong Kong. It needs to be renewed one month before its expiry date (annually or once in three years).
- Annual General Meeting (AGM). It needs to be held annually. A written resolution is allowed instead of the Annual General Meeting.
- Licensing. This requirement is optional. It depends on the type of business. No significant difficulties ever arise when obtaining a license.
Documents Required for Company Registration in Hong Kong
The list of necessary documents may vary depending on the type of company, scope of business, residency/tax status of company officers. The list that we have prepared for you applies to a typical case when the organizational form of business is a limited company in Hong Kong. Please note that the set of documents for opening a corporate account for the Hong Kong company will depend on the specific bank. Please feel free to ask our experts for more information.
Documents for company registration in Hong Kong:
- Articles of Association
- Registration form (see below)
What information and documents are implied when it comes to the company registration form in Hong Kong?
- Company name in Hong Kong.
- Registered address.
- A brief description of the company’s operations.
- Details of the shareholders, directors and secretary of the company in Hong Kong.
- Liabilities of company members.
- The share capital registered at the time of company incorporation in Hong Kong.
- Number of shares held by subscribers.
Documents for non-resident shareholders and directors of a company in Hong Kong:
- Passport copy, proof of residence from their country.
Documents for resident shareholders and directors of a company in Hong Kong:
- Copy of Hong Kong ID card.
- Copy of proof of residence.
Documents for corporate shareholders and directors of a company in Hong Kong:
- Copy of the documents for the parent company registration (Company Registration Certificate, Articles of Association).
Offshore Status for a Hong Kong Company
Getting offshore status is not a must, and in some cases it is not what’s best for one’s business. If you find it difficult to decide, please do not hesitate to contact our experts. And please do it before you start your company registration in Hong Kong.
Here is the set of conditions for obtaining offshore status for a company in Hong Kong (the procedure is lengthy, it may take several months):
- No customers/clients from Hong Kong.
- No actual (physical) office in Hong Kong.
- No suppliers from Hong Kong.
- Company’s trade flow passes outside Hong Kong.
- All business transactions take place outside Hong Kong.
Costs of Maintaining a Company in Hong Kong
Company registration is not a very expensive procedure. But you should clearly understand that you will also have certain annual expenses to keep your company in Hong Kong operational. Please consider your budget carefully and make sure that you are on the safe side with the amount required for company registration and maintenance in Hong Kong.
Basic cost items:
- Annual state fees.
- Accountant, secretary and auditor services.
- Office rent.
Important note. The cost of accounting services will depend directly on the number of transactions of your company in Hong Kong and the accuracy of record keeping. The cost of secretarial services and the registered address fee are relatively low, but renting an office in Hong Kong is quite expensive. Yet we are always ready to offer you a choice of company offices in Hong Kong.
Corporate Bank Account for a Company Registered in Hong Kong
Previously, when the matter of opening a corporate bank account was raised, European banks were considered in the first place. But today more focus is being placed on Asia, a region with the greatest prospects and potential.
Main advantages of opening a corporate bank account in Hong Kong or Singapore:
- Exceptional level of prestige.
- The well-deserved status of financial centers in Southeast Asia and the world. Banks here are not inferior to Swiss banks, but the conditions for corporate clients are at least as good.
- No currency controls.
- The possibility of opening a multi-currency account with every bank.
- High speed of payment processing.
- The banks are focused on companies and business in Asia. Opening a corporate account in this case will be the most simplified.
- Service fees in Asian banks are lower than in Europe.
Important note. Opening a corporate bank account in Hong Kong remotely is impossible.
Those whose business is related to Europe can find Estonian banks rather appealing. Opening a corporate account with an Estonian bank is fairly simple, especially when you have economic ties with this country. If your company does not conduct any business in Estonia, the bank may impose requirements of monthly turnover on account, but opening a bank account will still be possible.
Basic criteria for choosing a bank for opening a corporate account for a company in Hong Kong:
- The purpose of opening a corporate bank account.
- The list of services provided.
- Type of company’s business. Not all banks are versatile. Some will block opening a corporate account for a business/company of high-risk category. Others will not work with offshore companies. Some banks will not work with companies from Asia. Other restrictions are also possible, it depends on the bank’s policy. Yet there are always options for opening a bank account when you turn to our experts.
- Service fees (regular services, charges for postings, servicing of accounts in the desired currency, extra services, etc.).
- Geographic location of the bank. The geographical location of the bank plays quite an important role. It is advisable that the center of economic interests of the Hong Kong company would be logically associated with the country of its registration and the country where the corporate bank account is opened.
Please note. A company in Hong Kong may have several corporate accounts opened with different banks.
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We are ready to take care of all arrangements related to company registration in Hong Kong and preparation of the required financial platform for your business (opening a corporate account(s), selection of extra services, etc.). Please feel free to contact us at info@offshore-pro.info and discuss the terms of cooperation. You can also use the alternative communication channels.
