An Introduction to Hong Kong Incorporated Companies
Within the People's Republic of China Hong Kong is a Special Administration Region, "SAR", under the "one country - two systems" philosophy. As an SAR, Hong Kong has executive, legislative and independent judicial power. There are free elections to the legislature and it maintains its own independent court structure and legal system based on English common law.
Hong Kong has enjoyed a long history as a major regional and global commercial centre. It operates under a capitalist system as a free port, with the free flow of capital and a freely convertible Hong Kong dollar. It is widely recognised that Hong Kong is and will continue to be a significant gateway to China with excellent communication facilities and a major international airport.
Hong Kong offers a competitive legal and regulatory environment for the incorporation and operation of Hong Kong limited liability companies.
A company may be incorporated with a sole shareholder and a sole director, however, a local Hong Kong company secretary is required. There is no requirement for the appointment of a local director or any restrictions on the nationality of a director. Furthermore, corporate directors are permitted. Starting 1 January 2014, the New Companies Ordinance requires having at least one Director who is a natural person.
Company meetings, whether board meetings or those of shareholders, can take place in any location; there is no obligation for such a meeting to take place in Hong Kong.
The jurisdiction also provides confidentiality of ownership. While the details of the director(s) and shareholder(s) are maintained on publicly accessible records, there is no requirement for the beneficial ownership of the company to be disclosed to the authorities in Hong Kong.
The company’s registered office must be located within the territory of Hong Kong and corporate documents must be in the official languages of Hong Kong English and Chinese (Cantonese).
The capital of the company can be in the standard Hong Kong Dollar but it is possible for it to be denominated in any currency. The minimum paid up capital is HK$1, though it is usual for the authorised share capital to be HK$10,000. Starting 1 January 2014, the New Companies Ordinance adopts a mandatory system of no-par value for all companies with a share capital and retires the par value of shares.
It is possible to acquire a ready-made shelf company or to incorporate a new company from scratch. We are able to incorporate a new company in 5-7 working days. A government fee is payable on incorporation, the minimum is currently HK$1,730 plus tax.
Running a Company
The accounts of the company can either be held at the company’s registered office in Hong Kong or elsewhere at the discretion of the directors. There is an obligation for the accounts to be filed with the local Hong Kong Inland Revenue Department but once the accounts are filed with the authorities they are not publically accessible. The accounts must be audited.
In addition, there is an obligation to file an annual return and to pay an annual Business Registration Fee currently fixed at HK$2,250.
With speed and low cost of incorporation and considerable flexibility in the incorporation and subsequent operation, as well as no obligation to disclose the identity of the beneficial ownership, Hong Kong registered companies are competitive with a light touch administrative regulation.
Moreover, the fiscal environment in Hong Kong adds to the already attractive location with no corporation tax on foreign (ie non-Hong Kong) profits.
For more information about Starting Running and Structuring your business in Hong Kong go to the relevant pages of the Mybusiness in Asia website at http://mybusiness-asia.com/en/hong-kong