Inteliumlaw

Company Formation In Hong Kong

Inteliumlaw » Business registration abroad » Company Formation In Hong Kong

Benefits of setting up a company in Hong Kong

Setting up a company in Hong Kong offers a variety of benefits, thanks to the region's business-friendly environment, robust legal system, and strategic location. Here are some key advantages:

Strategic Location

Hong Kong is ideally located for businesses looking to access the vast markets of Mainland China as well as the Asia-Pacific region. Its proximity to these markets makes it an ideal hub for trade and international business. So if international expansion on those markets is your plan, opening a company in Hong Kong is a great choice.

Free Market Economy

Hong Kong is renowned for its free market economy, characterized by low taxation, minimal government intervention, and free trade. This environment is highly conducive to business and investment.

Simple Tax System with Low Rates

Hong Kong has a straightforward and low tax regime. Profits tax is capped at a relatively low rate, and there are no capital gains taxes, no VAT or sales tax, and no withholding tax on dividends or interest. Furthermore, foreign income is not taxed in Hong Kong, making it an attractive place for international businesses. Consequently, if you wish to have an optimal tax structure for your business, you should definitely consider company registration in Hong Kong.

World-Class Infrastructure

Hong Kong offers world-class business, communication, and transportation infrastructure. Its efficient public transport system, state-of-the-art telecommunications network, and the Port of Hong Kong being one of the busiest ports in the world facilitate easy access to global markets.

Robust Legal System

The legal system in Hong Kong is based on English common law, offering transparency and protection of intellectual property rights. The rule of law and an independent judiciary provide a secure environment for businesses and investors making a company incorporation in Hong Kong a sound option.

International Financial Center

Hong Kong is a global financial hub with a robust banking system, a highly developed capital market, and a wide range of financial services, including a strong presence of international banks. This makes it an ideal location for raising capital and managing finances.

Ease of Doing Business

Setting up a business in Hong Kong is straightforward and efficient. The process of company registration is simple, and the government offers various resources to support business development. Hong Kong consistently ranks highly in the ease of doing business indexes.

Gateway to China

Through the "One Country, Two Systems" principle, Hong Kong serves as a gateway for foreign investors into Mainland China, offering unique advantages under the Closer Economic Partnership Arrangement (CEPA) with China, which provides reduced tariffs and greater access to the Chinese markets for Hong Kong-based companies.

Considering these benefits, Hong Kong continues to be a compelling location for businesses aiming for a presence in Asia and beyond. However, it's also important to stay informed about the latest developments, particularly regarding regulations and geopolitical dynamics that may impact business operations.

Hong Kong company formation services by InteliumLaw

InteliumLaw offers a comprehensive suite of legal services related to company registration Hong Kong, designed to assist businesses in navigating the regulatory, legal, and practical aspects of establishing a presence in the region. Such include:

Company Incorporation

Assistance with the complete process of Hong Kong company registration, including company name registration, preparation of memorandum and articles of association, and filing the necessary documents with the Hong Kong Companies Registry. We can also assist with Hong Kong company formation with bank account.

Ongoing Legal and Tax Consulting

Except for Hong Kong company formation services, we offer advice on the Hong Kong legal and tax system, helping with tax planning to optimize tax liabilities, and ensuring compliance with tax filing requirements, including profits tax, salaries tax, and any applicable double taxation agreements.

Contract Drafting and Review

Assisting with the drafting, negotiation, and review of business contracts, including shareholder agreements, service contracts, lease agreements, and partnership agreements.

Compliance and Risk Management

Advising on compliance with Hong Kong's legal and regulatory framework, including industry-specific regulations, and assisting with risk management strategies.

Types of Companies in Hong Kong

Hong Kong offers various types of business entities to suit different business needs. Here's a brief description of each type that you need to consider if you think about HK company registration

Private Limited Company

The most common and preferred form of business entity. It is a separate legal entity from its owners, limiting shareholders' liability to their shares and allowing for easy transfer of ownership. Suitable for small to medium-sized businesses. While directors and shareholders may be not from Hong Kong, a company must have a local secretary and a local registered address.

Public Limited Company

Another option of company formation in Hong Kong is a public limited company which is similar to a private limited company but can offer shares to the public and has higher regulatory requirements. It's suitable for large businesses looking for capital expansion through public investment.

Partnership

A business entity owned by two or more persons. There are two types (i) general partnership (where partners share unlimited liability for the debts and obligations of the business) and limited partnership (which comprises both general partners (with unlimited liability) and limited partners (liability is limited to the extent of their contribution to the partnership)).

Branch Office

An extension of a foreign company, not a separate legal entity. It can conduct business under the name of the foreign company but its liabilities extend to the parent company.

Representative Office

Used by foreign companies to conduct marketing and research activities without engaging in profit-making operations. It cannot enter into contracts or generate revenue and is not considered a separate legal entity.

Documents required to incorporate a company in Hong Kong

To register a company in Hong Kong, several documents need to be prepared and submitted to the Companies Registry. Initially, you would need to provide a proposed company name for approval.

Once the name is approved, you must prepare and submit an incorporation form that includes detailed information about the company, such as its business nature, registered address in Hong Kong, and particulars of its directors and shareholders. Additionally, a copy of the company's Articles of Association is required, which outlines the rules governing the management and operation of the company. This document is essential for company formation in HK as it serves as a guide for the company's internal affairs and procedures.

For directors and shareholders, proof of identity and residential address must also be provided. These documents can be in the form of a passport, identity card, or similar official identification, along with recent utility bills or bank statements as proof of address.

Hong Kong company registration process

Incorporating a company in Hong Kong involves the following steps:

Choose the type and name of the company

As the first step of the HK company formation, you will have to decide between a company limited by shares or a company limited by guarantee based on your business needs. After that, you will need to select a company name, ensuring it doesn't clash with existing names in the Companies Registry or infringe on intellectual property rights.

Application along with required documents and fees

To proceed with HK company incorporation, you will then have to submit the required Incorporation Form together with the company's articles of association, other documents and pay respective fees.

Collect the Certificates of Incorporation and Business Registration

Upon successful registration, you will receive a governmental certificate confirming registration of the company.

Obtain other necessary permits or licenses

For specific business activities, especially those related to import and export operations, additional permits, licenses, certificates, or approvals may be required.

Tax Information

In Hong Kong SAR, taxation is based on a territorial system. This means that any person or entity, including corporations, partnerships, and sole proprietorships, engaged in a trade, profession, or business within Hong Kong SAR is liable to pay profits tax on profits that are earned or derived from within Hong Kong SAR from their respective trade, profession, or business activities.

For a company to incur profits tax liability, it must meet two criteria: (i) it should be conducting business within Hong Kong; and (ii) it must generate profits from this business that are sourced within Hong Kong. The primary method for establishing the source of profits involves examining the activities carried out by the taxpayer to earn the profit and identifying where these activities took place. Profits derived from activities conducted in Hong Kong are subject to taxation, regardless of whether the profits are received in Hong Kong or not. It's important to note that the criteria for determining the source can vary depending on the type of income in question, applying different tests tailored to different income categories.

To tax these profits, Hong Kong employs a two-tiered profits tax rate regime. Specifically, the first HKD 2 million of a company's assessable profits are taxed at a lower rate of 8.25%. Any assessable profits beyond this threshold are taxed at a higher rate of 16.5%. This regime applies to every company conducting business in Hong Kong, ensuring that profits sourced within Hong Kong are taxed accordingly.

Hong Kong does not levy withholding taxes on dividends, interest, or rental income. The only instance where withholding tax applies is on payments made to non-residents for the usage, or the right to use, certain intellectual property either within Hong Kong or abroad, provided those payments are tax-deductible for the payer. The standard tax rate applied is 16.5 percent on the profits deemed assessable.

There is also no capital gains tax in Hong Kong as well there is no VAT, goods and services tax, or sales tax.

Hong Kong company formation cost

The Hong Kong company formation cost encompasses various expenses - the fee for registering the company name and the charges for filing the incorporation documents with the Companies Registry, professional fees may be incurred if services from legal, accounting, or corporate service providers are engaged to assist in the incorporation process. For companies requiring a registered office address or secretarial services, which are obligatory under Hong Kong law, there might be further costs. Finally, depending on the nature of the business and its specific needs, expenses related to obtaining necessary licenses or permits should also be considered as part of the overall company formation cost in Hong Kong.

Contact us to discuss our Hong Kong company incorporation services and receive a detailed offer adopted for your business case.

Incorporate your new Hong Kong company now

If you decide to register a Hong Kong company, contact us via form and we’ll reach out to discuss your case and offer a suitable solution tailored to your needs.

FAQ

How to check Hong Kong company registration?

You can conduct searches on the current data of registered companies and image records of documents registered and kept in the Companies Register through the e-Services Portal of the Companies Registry.

Can foreigners set up a company in Hong Kong?

Yes, foreigners can set up a company in Hong Kong.

How easy is it to set up a company in Hong Kong?

Setting up a company in Hong Kong is generally considered to be straightforward and efficient, making it an attractive destination for entrepreneurs and businesses worldwide. The process of forming a company in Hong Kong is streamlined and can often be completed online, reducing the need for physical paperwork.

Can a foreigner be a director in Hong Kong company?

Yes, a foreigner can be a director in a Hong Kong company. However, a local secretary is needed.

How to register a company in Hong Kong online?

Online company registration in Hong Kong is possible. You can open a company in Hong Kong online using Companies e-Registry’s online portal platform, which is available 24/7.

How long does it take to register a company in HK?

In general, it can take from 2 to 10 days to fully complete the registration process after the application is submitted. So it will not take much time to incorporate a company in Hong Kong.

What is a Business Registration Certificate?

In the context of registering a company in Hong Kong, a Business Registration Certificate is a mandatory document issued by the Inland Revenue Department (IRD) that officially acknowledges the registration of a business. It contains a business registration number or BRN.

What is a Business Registration Number?

A business registration number (BRN) is a unique number the IRD assigns to a business entity, this will act as its registered identification number for tax purposes.

What is the difference between BRN and CRN in Hong Kong?

The Business Registration Number (BRN) serves as your tax identification number, assigned by the Inland Revenue Department (IRD). Up to December 2023, the Company Registration Number (CRN) served as your company's unique identifier, provided by the Companies Registry. However, Starting from 27 December 2023, the company number was replaced by the first 8-digit of the business registration number (BRN) issued by the Business Registration Office of the Inland Revenue Department.

What do I receive after registering a company?

A Certificate of Incorporation and a Business Registration Certificate will be issued by the Companies Registry after Hong Kong company incorporation. The Certificates will be issued in electronic form for electronic applications and in hard copy form for applications delivered in hard copy form.

Other services

Ongoing Legal Support

The activities of any company must comply with the current legislation. It is difficult to imagine all processes without legal business support. The specialists of

More »
International Corporate Structuring

International Structuring

International structuring is of great importance for any business, both already functioning and planning to enter the international market. The correct organization of the legal

More »

Leave a request for a service

The accumulated experience and tracking of future changes in this area allow us to be proactive
for our clients and develop the most adapted business structures to modern conditions.

By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.