FEATURES OF HONG KONG LIMITED LIABILITY COMPANY
(Hong Kong Private Company Limited by Shares)
Hong Kong is located in the South China Sea 100 miles south east of Guanzhou (formerly known as Canton). As of the 1 July 1997 under the Sino-British Agreement of December 1984 Hong Kong became a Special Administrative Region (HKSAR) of the People's Republic of China. The Basic Law, which is the Constitution of the HKSAR, is intended to maintain the HKSAR and the PRC as separate governmental, legal and economic systems. This is known as the "One Country, two Systems" concept. Hong Kong is governed by a Chief Executive and an Executive Council. Although there is a legislature, the administration is executive led and generally pro-business. Hong Kong is ranked the freest economy in the world.
Legal System and Taxation
The legal system of Hong Kong is based on English Common Law supplemented by locally enacted Ordinances. Hong Kong is guaranteed a high degree of autonomy from 1997. It is generally allowed to enact and enforce its own laws. The Hong Kong Companies Ordinance has many similarities to the British Companies Acts. There are an excellent range of professional services available as Hong Kong serves as the major business centre for the whole of the Far East. This is unlikely to change in the foreseeable future.
One of the major advantages of utilising a Hong Kong company is that there is no immediate suggestion that the company is a tax avoidance vehicle as Hong Kong is major trading entity in its own right. Hong Kong is one of the world’s largest importer and also one of the world’s largest exporter. The vast majority of the 50,000 Hong Kong companies incorporated annually are local trading companies doing real business in the region.
The official languages are English and Chinese, with English being used in the commercial and political context and Cantonese Chinese used widely in industry and domestic trade.
The Hong Kong Dollar which is officially pegged to the US Dollar at USD1=HKD7.78
Type of Laws
Common Law based on English Common Law.
Principle Corporate Legislation
Hong Kong Companies Ordinance (Cap 32). Details can be viewed at the following link:
Faeatures of Hong Kong Limited liability Company (Private Company Limited by Shares)
Type of Company for International Trade and Investment
Private Company Limited by Shares (Limited Liability Company, Pravte Company, LLC).
Restrictions on Trading
Cannot undertake banking or insurance activities or financial business (such as currency trading) unless relevant licences are obtained.
Power of Company
A Hong Kong Company has all the powers of a natural person.
Language of Legislation and Corporate Documents
Legislation in both English and Chinese; incorporation documents, such as Memorandum and Articles of Association (also known as Articles of Association, bylaws and constitutions in other countries), Notification of Appointment of First Directors and Secretary etc could be prepared either in English or Chinese.
Name Approval Required
It is not possible to reserve a name. It is essential to check that there is no similar or identical name on the Register of Companies maintained by the Companies Registry, which would prevent the company being incorporated.
Shelf Company Available
Yes, shelf companies or readymade companies are commonly used Hong Kong and are available for immediate delivery. Please click here for the costs for purchasing a readymade company from GT or download our latest readymade companies list.
Procedures to Incorporate
Submission of Memorandum and Articles of Association and a Declaration of Compliance with Companies Registry>> File documents for appointment of director(s) and situation of Registered Office with Companies Registry after issuance of Certificate of Incorporation>> Apply for Business Registration Certificate from Business Registration Office (please click here for detailed incorporation procedures).
See Also: Content of Memorandum and Articles of Association; Sample Standard Memorandum and Articles of Association of a Hong KOng private company
Time to Incorporate
Approximately two weeks from the submission of documentation to the Hong Kong Companies Registry; for purchase of readymade company, the whole registration process could be completed in as less as one day.
A name that is similar to or identical to an existing company. A name that constitutes a criminal offence or is otherwise contrary to the public interest. A name that implies government patronage.
See also: Hong Kong Compoany Names Guidelines
Names Requiring Consent or Licence
Building society, Chamber of Commerce, chartered, co-operative, imperial, kaifong, mass transit, municipal, savings, tourist association, trust, trustee, underground railway, bank, insurance, assurance, reinsurance, fund management, asset management and investment fund.
Suffixes to Denote Limited Liability
Disclosure of Beneficial Ownership to Authorities
Not required. Confidentiality can be obtained by using nominee shareholders.
Taxation (Profits Tax, Corporate Income Tax)
The rate of taxation is 17.5% on Hong Kong source income only. In practice this means that, with careful structuring, as long as a Hong Kong company is not actually doing business in Hong Kong it would normally be possible to arrange the affairs of the company so that no tax would be payable. Detailed advice on this aspect is available on request. Please click here for a detailed description of different categories of taxes in Hong Kong.
There are two types of share capital, one is authorised share capital and another is issued and paid up share capital. There is no limitation on the amounts of both types of share capitals. For most of the small private company, the authorised share capital is usually set at HK$10,000 divided into 10,000 shares of HK$1 each and the issued share capital is usually set at HK$1 divided into 1 share of HK$1 each.
Also see: increase of share capital, allotment of shares
Classes of Shares Permitted
Ordinary shares, preference shares, redeemable shares and shares with or without voting rights. Bearer shares not allowed.
A minimum number of one shareholder is required whose details are filed on the public register maintained by the Companies Registry. Corporate shareholders are permitted and anonymity can be achieved by the use of nominee shareholders. The shareholders can be of any nationality and be resident anywhere in the world and meetings can take place anywhere.
A minimum of one director is required and full details of these must be filed with the Companies Registry. The director can be of any nationality and be resident anywhere. Corporations incorporated anywhere can act as director. There is no requirement for board meetings to be held within Hong Kong and directors may be resident anywhere in the world.
Also see: Non-statutory Guidelines on the Duties of Directors of Hong Kong Company
A company must appoint a Company Secretary who can either be a person or a corporation. If the secretary is a person, he or she must be a Hong Kong resident. If the secretary is a corporation, the corporation must has a registered office or a place of business in Hong Kong. We will provide a company secretary at a cost of USD275 per year, if required.
Also see: Responsibilities of Company Secretary
A company must maintain a registered address in Hong Kong where the correspondence from Hong Kong Government can be served. We will provide the registered office at a cost of USD175 per year, if required.
Hong Kong companies are required to prepare audited accounts under the company laws. Also, a copy of the audited financial statements is to be furnished with Inland Revenue Department together with Profits Tax Return. The audited financial statements are not available to the public or to the foreign authorities except those of a listed company. We can provide complete supporting services after incorporation, such as book-keeping and auditing (please click here for details of our accounting services) and tax filing (please click here for details of our tax filing services)
All companies must also prepare and file an annual return which gives details of the current directors and of the shareholders who have held shares in the company at any time during the year.
See also: Step by step guide to register a Hong Kong company
Hong Kong Company Registration and Maintenance Costs
|Type of Company
(you provide the company name of your choice and GT register the company for you)
you choose a name from our readymade companies list, that is, you purchase a company off the shelf from GT
||Our fees for registration of a company with a standard share capital of HKD10,000 and standard Memorandum and Articles of Association are USD1,325.00. Our fees cover statutory incorporation filing fee of USD225 paid to the Companies Registry and first year business registration fee of USD335 to be paid to Business Registration Office, first year company secretary fee and first year registered office fee.
||Our fees for a readymade company with a standard share capital of HKD10,000 and standard Memorandum and Articles of Association are USD1,325.00. Our fees cover statutory incorporation filing fee of USD225 paid to the Companies Registry and first year business registration fee of USD335 to be paid to Business Registration Office, first year company secretary fee and first year registered office fee and transfering the subscriber's share to you.
||Step by step guide to register a Hong Kong company through GT
||Step by step guide to purchase a readymade company from GT
Annual Maintenance Costs
Annual maintenance costs of a Hong Kong company are estimated to be around USD1,335 which covers annual filing fee, annual company secretary fee and annual registered office fee, annual audit fee and tax filing fee.
Special priced packages starting from USD1,325.00, Please check out for details.
Detailed break down of formation costs for Hong Kong company
Hong Kong company Detailed registration procedures and documents required
If you need assistance, more information or want to place an order, please contact our Hong Kong Office, Shenzhen Office.
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