FAQFrequently Asked Questions for setting up a Hong Kong Company
| Q： |
What are the advantages of using a Limited Company to engage in commercial activities in Hong Kong? |
| A： |
A Limited Company is usually in the form of Private Company Limited by Shares in Hong Kong where the liabilities are limited. 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 shareholder(s) are limited to the issued capital of their shareholdings, the maximum possible loss of the shareholder(s) could only be the total sum of their investments. Generally speaking, Shareholder(s) of the Company are not personally liable for the debts of the Company. When the investor(s) prefer to adopt other forms, such as Sole Proprietor or Partnership, to run their businesses, the liabilities of the investor(s) are unlimited. The creditor(s) can hence institute legal proceedings directly against the investor(s). Where the investor(s) cannot repay the debts, the investor(s) are forced into personal bankruptcy. Nevertheless, incorporating and running a Limited Company is comparatively more costly. |
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Q： |
What are the minimum requirements for setting up a Hong Kong Private Company? |
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A： |
The minimum requirements are:
The same person can be the company secretary, director and shareholder of the Company, except that the sole director cannot also be the sole company secretary of the Company. Please note that corporate director is not allowed in case of a Private Company which is a member of a group of companies of a Listed Company. There is no prescribed minimum share capital. For practical purposes, this is usually not less than HK$1.00. |
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Q： |
Does the director(s) and/or shareholder(s) of a Hong Kong Company need to be resident or an ordinarily resident in Hong Kong? |
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A： |
There is no such requirement for the director(s) and shareholder(s). However, the company secretary must be either an individual resident in Hong Kong or a Hong Kong Limited Company. Also, the auditor(s) must be a firm of Hong Kong registered certified public accountants. |
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Q： |
Can the share capital of a Hong Kong Company be denominated in foreign currency? |
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A： |
Yes. The share capital can be denominated in foreign currency for a Hong Kong Company. It is also possible to change the denomination of currency anytime. |
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Q： |
Is there any capital duty on issuance of shares for a Hong Kong Company? |
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A： |
There is no capital duty on issuance of shares, for example, when the company register and/or allotment of new shares. |
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Q： |
Can I purchase a ready-to-use shelf (readymade) Hong Kong Company from Kaizen? |
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A： |
Yes. We can provide a list of ready-to-use shelf companies upon request. Our services include preparing and completing initial setting up documents such as director resolution(s), relevant form(s) to effect the change of director(s) and company secretary, transfer of founder member(s)’ share(s) and change of registered office address etc. |
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Q： |
If I want to incorporate a Hong Kong Company with a specific name, should I use a shelf company and change the company name or should I ask to incorporate a Company with the specific name? |
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A： |
Either is possible. It is mostly preferred to incorporate a brand-new Hong Kong Company with the specific name. This will take approximately four working days for new incorporation. Otherwise, you can choose a shelf company if you need a Company to be in existence immediately. Similarly, it will take approximately four working days to change the name of a Company already in existence. |
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Q： |
Are there any ways to conceal my details as director and shareholder shown on the public records of the Companies Registry? |
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A： |
You can register an Offshore Company or appoint a nominee shareholder to hold the share(s) on your behalf. You can also appoint a nominee director to act on your instructions. Kaizen can provide the services of nominee shareholder and individual nominee director. |
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Q： |
Can Kaizen arrange to open a bank account for my incorporated Hong Kong Company? |
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A： |
Yes, Kaizen could help to introduce and arrange meeting with several banks in Hong Kong Bank but please note, account opening is subject to the sole discretion of approval by the banks. |
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Q： |
Do I need to open a bank account for my Hong Kong Company? |
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A： |
No. The law does not require an incorporated Hong Kong Company to open a bank account and does not impose any restrictions as to where it should open a bank account or the number of bank accounts it should open. |
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Q： |
Do I need to appoint an auditor for my Hong Kong Company before I start business? |
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A： |
No. However, an auditor of the Company must be appointed before the first annual general meeting of the Company, as audited accounts will have to be presented to the member(s) in the annual general meeting. |
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Q： |
Do we need to apply any licences for a Company before its registration in Hong Kong? |
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A： |
Generally, no license is required for most of the business for the purpose of registration. However, before conducting business in Hong Kong, certain types of business may need additional forms of licence other than the Certificate of Incorporation and Business Registration Certificate. For more information., please visit the homepage of Business Licence Information Service (https://www.success.tid.gov.hk/tid/eng/blics/menu.jsp) |
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Q： |
What are the continuing compliance requirements of a Hong Kong Company? What if I fail to meet those requirements? |
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A： |
A Hong Kong Company must renew its Business Registration Certificate and file an Annual Return to the Hong Kong Companies Registry at its anniversary date every year to maintain the Hong Kong Company. A Hong Kong Company is also required to do the following in every year:
There is an ongoing duty to ensure the information held on the public registers are correct, it is required to report the changes within the specific deadline if there are any changes, the following are some examples:
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 ensure that your Company is fulfilling these requirements, it is highly recommended to choose a Trust or Company Service Provider Licensee like Kaizen. |
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Q： |
Instead of setting up a Hong Kong Company, can I use a Company in my home jurisdiction to conduct business in Hong Kong? |
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A： |
Yes. You can carry out business in Hong Kong in the name of one of the Companies registered in your home country by registering 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. |
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Q： |
What is the tax regime of a Hong Kong Company? |
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A： |
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. Hong Kong profit tax is under a two-tiered profits tax rates regime, the profits tax rate for the first $2 million of assessable profits is 8.25% for corporations. Assessable profits above $2 million will be subject to the rate of 16.5% for corporations. Salaries tax is imposed on income arising in Hong Kong from any employment. Tax payable is calculated on a sliding scale that progresses from 2% - 17%. Property tax rate charge on 15% on rentals received from the properties located in Hong Kong under the name of Company less an allowance of 20% for repairs and maintenance. If a Company already paid profits tax on their rental income, it will be exempted from property tax. |
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