How long does it take to form the Hong Kong company?
Ordinarily it takes about 4-7 working days to incorporate a company in Hong Kong. Unless if you are from overseas, it may take longer time for the logistics of signing and delivering the company formation documents.
What are the requirements for forming a limited company in Hong Kong?
In Hong Kong most companies are incorporated as private limited companies (limited by shares). The following are the basic requirements for forming a company in Hong Kong.
- Any individual over the age of 18 years can incorporate a Hong Kong company.
- Minimum one shareholder who can be a local or foreigner. A shareholder must be over 18 years of age.
- Minimum one director who can be a local or a foreigner. A director must be over 18 years of age.
- The shareholder and the director can be the same person.
- There is no minimum share capital requirement. However, generally a company will have an authorized share capital of HKD 10,000.00 represented by 10,000 ordinary shares of HKD 1.00 each. The minimum issued / paid-up share capital can be 1 share of HKD 1.00.
- Must have a physical local registered address (Post Office Box is not allowed).
- Must have a local company secretary. The secretary, if an individual – must be an ordinarily resident in Hong Kong. If a body corporate - must have its registered office or a place of business in Hong Kong. Sole shareholder and director cannot also act as the company secretary of the company.
- A name approval / clearance is required before applying for company registration. Names must not be:
same as or similar to a name appearing in the Companies Registry's 'Index of Company Names'.
infringe on trademarks.
be offensive or otherwise contrary to public interest.
a combination of English words / letters and Chinese characters.
Are bearer shares allowed in Hong Kong?
No. Hong Kong company formation does not permit bearer shares.
Do we need to be present in Hong Kong during company formation process?
No, there is no need for you to be physically present in Hong Kong during the company incorporation. But depending on the bank you choose to open your company bank account, you may have to meet with the bankers personally in Hong Kong at the time of account opening.
What language can a company name be registered?
A company may be registered with an English name or a Chinese name, or an English with a Chinese name. A company name with a combination of English words / letters and Chinese characters is not allowed. An English company name must end with the word "Limited" and a Chinese company name must end with the Chinese characters equivalent to the word "limited".
For incorporation of a Hong Kong company, what documents do I need to send?
In case of a foreigner, the "service agent" will normally require the following documents from you:
- Copy of your passport.
- Copy of your residential address proof such as utility bill, cable bill, etc.
- Personal bank reference letter.
- Information about the proposed company, including the proposed company name, shareholders, directors, etc.
Is there a minimum age requirement for the directors and shareholders of a Hong Kong company?
The directors and shareholders of a Hong Kong company should be at least 18 years of age.
It will take how long to open a corporate bank account in Hong Kong?
Once the company has been registered with Company Registrar, you can proceed to opening the bank account. The time taken to open the bank account varies from bank to bank and can range from 2 days to 10 days.
Are Hong Kong companies required to file annual accounts?
Annually, Hong Kong companies must file an audited financial statements with the Hong Kong Inland Revenue Department to support the Profits Tax Return. There is no requirement to file accounts with the Companies Registry.
The auditor must be a practicing certificate holder of a member of the Hong Kong Institute of Certified Public Accountants.
Are there exemptions from filing audited accounts with the Inland Revenue Department?
The following companies are exempted from submitting audited financial statements together with their profits tax return:
- Small corporations (total gross income below HKD 2,000,000.00).
- Dormant companies (having "no relevant accounting transactions").
- Companies incorporated in a jurisdiction whose laws do not require accounts to be audited.
- Hong Kong branch of a foreign company, providing the following information together with the Profits Tax Return:
o the place of incorporation of the foreign company.
o whether the laws of that country require a statutory audit of the world-wide accounts of the company.
o whether that audit has been conducted.
o a brief summary of the financial and accounting records maintained by the Hong Kong branch.
What is a "dormant company"?
- A dormant limited company is one that has "no relevant accounting transactions" during a financial year - such as the receipt and expenditure of money and the sale and purchase of goods, assets and liabilities etc. This does not include any transactions which arises from the payment of any fee which the company is required to pay by any Ordinance.
- A company may pass a special resolution authorizing its directors to make a statutory declaration that the company will become dormant and to deliver a copy of the statutory declaration to the Registrar. The company shall be deemed a dormant company effective the date of delivery.
For a dormant company, are there any exemptions for compliance?
A deemed dormant private limited company is exempt from filing annual returns with the Companies Registry, holding AGMs, appointing auditors and preparing audited accounts. However, it must file a profits tax return with the Inland Revenue Department.
If I setup a Hong Kong company, can I relocate to Hong Kong to operate my company?
Foreign entrepreneurs who wish to relocate to Hong Kong for operating their companies are required to apply for an Investment Visa which is very similar to applying for the Employment Visa under the General Employability Policy, except that this visa is meant specifically for company owners. Note that you can apply for Investment Visa only after the company formation.
What is the permitted currency of share capital for a Hong Kong company?
Hong Kong Dollar is the preferred currency of choice for convenience, but any major currencies are acceptable.
Does engagement of a professional firm in Hong Kong required for incorporating a Hong Kong company?
As a resident in Hong Kong, it is not mandatory to appoint a professional firm to incorporate a Hong Kong company; and you can handle the incorporation yourself. However, given the complexities of the incorporation procedures and the ongoing statutory compliances, it is advisable to use the services of a professional firm.
In the case of a non-resident, incorporation of a Hong Kong company will require a local professional firm to handle on your behalf.
What are the incorporation fees?
There are two fee payments to be made:
- Incorporation Fee to the Companies Registry, and
- Business Registration Fee to the Inland Revenue Department (tax authority in Hong Kong).
A registration fee of HGD 1,720 and the capital fee of HKD 1.00 for every or part of HKD 1,000 of the nominal share capital (this capital fee is subject to a maximum of HKD 30,000 per case), is payable to the Companies Registry for incorporating a private limited company having share capital. Fees for obtaining a Business Registration Certificate from the Inland Revenue Department is as follows: HKD 450 for a 1 year Certificate.
Do foreigners need a Hong Kong partner to incorporate a company?
No, Hong Kong companies do not require a local shareholder or a director. However, you service agents can act as your company secretary and registered address agent. They will also handle the annual filing matters for your company as well as can provide nominee director and nominee shareholder services if required.
Does Hong Kong company law make a distinction between a regular director and a nominee director?
No, under the laws in Hong Kong, all directors are regarded as the same and are expected to fulfill their duties and responsibilities, fiduciary and otherwise.
Is the information of the company directors and shareholders available publicly? What are the reporting requirements for shareholders and directors of a Hong Kong company?
All information about the company directors, shareholders and company secretary is public information. It is mandatory to file details of the company officers with the Companies Registry when you incorporate a Hong Kong company.
Are corporate directors and shareholders permitted?
Directors and shareholders can either be natural persons or body corporates.
Is a Hong Kong company required to obtain any business license after incorporation?
Companies incorporation is governed by the Hong Kong Companies Registry. But the nature of the actual business activities is controlled and regulated by other Government Departments which require a business licence or permit before commencement of business activities. Examples include: travel agencies, restaurants, employment agencies, fund managers, insurance brokers, lawyers, liquor distributors, moneylenders, banks and childcare centers etc. You can apply for a business licence only after you have incorporated your Hong Kong company.
What is the requirement for the registered office for a Hong Kong company? Can home addresses be used as the place of business?
A registered office in Hong Kong is required from the date of incorporation. This is the company's legal address in Hong Kong for notices and proceedings which can be different from its business address.
It is possible to use a Hong Kong based home address to conduct small scale businesses.
For Hong Kong companies, is there any stamp duty for allotment or transfer of shares?
Stamp Duty on share capital in Hong Kong is as follows:
- No Stamp Duty is payable on the allotment of shares.
- Stamp Duty is payable on the transfer of shares by way of sale or purchase.
- For Contract Notes for sale or purchase of any Hong Kong stock - 0.1% of the consideration or Net Asset Value - whichever is higher, on every sold note and every bought note. Stamp duty must be paid within 2 days after the sale or purchase, if effected in Hong Kong or within 30 days after the sale or purchase, if effected elsewhere.
- For transfers of any other kind - HKD 5 - Stamp Duty must be paid before the date of execution, if executed in Hong Kong; within 30 days after the date of execution, if executed outside Hong Kong.
The rate of Stamp Duties and time limit for stamping:
Note: There are certain exemptions, to certain transfers in connection with a stock borrowing and lending arrangements.
What are the annual filing requirements for companies incorporated in Hong Kong?
Annual filing requirements include:
- Annual Return filing with the Hong Kong Companies Registry,
- Annual Tax Return filing with Inland Revenue Department.
Is there any annual turnover requirement for a Hong Kong company?
There is no such requirement.
What are the different types of business entities in Hong Kong?
For private enterprises, the various common types of business entities are:
- Private limited company - this is the most preferred type of legal entity.
- Branch office.
- Subsidiary company (a private limited company with corporate shareholder).
- Representative office.
- Sole proprietorship (not recommended due to unlimited legal liabilities on owners).
Can a Hong Kong company hire foreign employees?
Yes, a Hong Kong company can hire foreign employees to work in Hong Kong. Employment visa is required for each such employee. There are different schemes under the employment visa category that cater to different groups of employees:
- Those with a degree or higher qualification in a full-time and locally accredited program in Hong Kong (referred to foreign graduates).
- Those with foreign education but possess special skills, knowledge or experience of value to and not readily available in Hong Kong.
- Chinese residents who possess special skills, knowledge or experience of value to and not readily available in Hong Kong.
Note that the company must be incorporated first before an employment visa application can be filed.
Can the name be changed after incorporation of the company?
Yes, a company name can be changed after incorporation by passing a special resolution. A "Notification of Change of Company Name" must be filed with the Companies Registry within 15 days after the passing of the Special Resolution. After approval of the new name, a "Certificate of Change of Name" will be issued
How to close a Hong Kong company?
Hong Kong companies can be closed either by "Liquidation" or "Winding Up" or "De-Registration". To de-register a company is relatively simple, inexpensive and a quicker procedure when compared to winding-up or liquidation. To de-egister a company, there are conditions required to be satisfied. The process will takes 5-7 months, depending on the complexities involved. To wind up a company is a lengthy, expensive and time consuming procedure.