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A Comparison of Subsidiary Company and Branch Office and Representative Office in Hong Kong
| Entity | Subsidiary Company | Foreign Company Branch Office | Representative Office |
| Entity Name | Need not be the same as parent company | Must be the same as parent company | Must be the same as parent company |
| Business Activities Allowed | Can conduct all business activities | Must be the same business activities as the parent company | Can only conduct market research or coordinating activities |
| Suitable For | For local or Foreign Companies who wish to expand their operations in Hong Kong | For Foreign Companies who wish to expand their operations in Hong Kong | For Foreign Companies who wish to set up temporary vehicle in Hong Kong to conduct research and act as liaison office |
| Disadvantages | Continuing Compliance Obligations e.g. Financial Reports, Audit, AGMS, Annual Filings, etc. | Continuing Compliance Obligations e.g. Financial Reports, Audit, Annual Filings, etc. | It is a temporary vehicle and cannot generate revenue |
| Ownership | Can be 100% foreign or locally owned | Just an extension of its parent company | Just a temporary administrative arrangement |
| Separate Legal Entity | Yes | No | No |
| Cap on Number of Members | Yes, max 50 | Not Applicable | Not Applicable |
| Minimum Setting up Requirement | One shareholder , which can be foreign or local individual or corporate shareholder AND must have at least one indiviudal director | Must have One Hong Kong Resident Agents | Must appoint a Chief Representative who will relocate from parent company |
| Limited Liability | Yes | No | No |
| Audit Accounts | Yes | Yes | No |
| Filing of Accounts with CR and IRD | Yes | Yes | No |
| Annual Filing | Must file audited report of the Hong Kong subsidiary with IRD | Must file branch offices management accounts with IRD | Not Applicable |
| Taxation | Taxed as Hong Kong resident entity | Taxed as non-resident entity | Not Applicable |
| Cessation of Business upon Death of a Member / Partner | No. Equity shares go on in perpetuity | No | Not Applicable |
| Validity Period | Perpetually until deregistered | Perpetually until deregistered | This is a temporary Setup. It is intended not to last more than 3 years |
| Usual Registration Time | Actual registration with CR can be less than 8 hours. Preparation of incorporation documents will require about 1 day. | Actual registration with CR can be less than 8 hours. Preparation of incorporation documents will require about 1 day. | 3-5 days |
| Appointment of Officers | Must appoint at least one individual director | Must appoint one resident agent | Must appoint a Chief Representative who will relocate from headquarters |
| Governing Body | CR & IRD | CR & IRD | IRD |
| Bank Account | Can open bank account in Hong Kong | Can open bank account in Hong Kong | Can open bank account in Hong Kong to run the operations. Must be funded by the parent company. |
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