As one of the world’s leading international financial centres, Hong Kong has a major capitalist service economy characterised by low taxation and free trade, and the currency, Hong Kong dollar, is the ninth most traded currency in the world.
Hong Kong was once described by Milton Friedman as the world’s greatest experiment in laissez-faire capitalism. It maintains a highly developed capitalist economy, ranked the freest in the world by the Index of Economic Freedom for 15 consecutive years.
It is an important centre for international finance and trade, with one of the greatest concentrations of corporate headquarters in the Asia-Pacific region.
Legislation: Hong Kong private and public limited companies are regulated by the Companies Ordinance Cap 32.
Important features: Below is a summary of some of the important features of Hong Kong private limited companies.
Type of company: Private limited companies limited by shares.
Jurisdiction: Hong Kong being formally under British rules is a common law jurisdiction, with an independent English based-legal system. Even after hand over to China, Hong Kong was not fully integrated into the political and economic system of China. There is a joint declaration that legal and economic systems of Hong Kong will remain unchanged for 50 years after the hand over in 1997.
The Authority: Matters pertaining to the registration and supervision of companies is supervised by the Company Registry.
Time to incorporate: In most cases a new company can be incorporated within 1-2 weeks. However for speedy acquisition shelf companies are widely available.
Business Registration Fee: HK$2,250.00 due and payable within one month from the date of incorporation. Annually this BRF will be payable on the anniversary of the first payment.
New Changes: (a) HK$600 – incorporated between 16/5/02 to 31/3/03; (b) HK$2,600 – incorporated after 1/4/03.
Shelf company availability: Yes. We always have a number of already existing companies for sale. These companies are “clean”, that is to say, they have never traded or engaged in any transaction whatsoever. We deliver to our clients a certificate of non-trading whenever we sell these companies. For further details please contact anyone of our personnel.
Taxation: Hong Kong’s basis of taxation is territorial in nature. This means that tax is ONLY charged on income sourced in Hong Kong. This refers to income derived from a trade, profession or business carried on in Hong Kong. As a result a company which carries on a business in Hong Kong, but derives profits from another place, is not required to pay tax in Hong Kong on those profits.
Minimum annual government fee: US$400.00 regardless of capital structure. This fee is payable every year the latest on the anniversary of the company.
Annual government filing fee for annual return: HK105 – within 42 days after the anniversary of incorporation HK$870 – more than 42 days but within 3 months HK$1,740 – more than 3 months but within 6 months HK$2,610 – more than 6 months but within 9 months HK$3,480 – more than 9 months.
Disclosure of beneficial owner: Not to the authority and the use of nominee shareholders are common. Nevertheless most incorporating agent will require that identity of beneficial owners.
Bearer shares: Not permitted. All shares must be registered.
Standard minimum paid up: None but our standard company comes with a standard paid up of U$2.00.
Standard authorised capital: None but our standard company comes with a standard authorised capital of HK10, 000.00.
Permitted currency of capital: HK$ or any kind of foreign currencies such as US$, RMB, Euro etc.
Minimum number of shareholders: One and there is no residency or nationality requirement.
Minimum number of directors: One and there is no residency or nationality requirement.
Corporate directors: Yes.
Local directors: Optional.
Company secretary: Yes.
Company seal: Need to adopt a common seal and must be used by the authority of the board of directors or other person so authorised by the board.
Public record of directors & shareholders: Yes.
Location of directors and shareholders meeting: Anywhere.
Telephone board meeting: Yes.
Access to Double Tax Treaty: Limited treaty with the USA.
Requirement to file account: Not to the Company Registrar but to the Inland Revenue Department.
Requirement to file annual return: Yes and it is simple.
Local registered office address: A HK private limited company must have at all time a registered office in Hong Kong.
|Type of company||Private company limited by shares|
|Common or civil law jurisdictions||Common law|
|Shelf company availability||Yes|
|Time to incorporate||1-2 weeks|
|Min. annual duty or franchise fee||(a) HK$600 – incorporated between 16/5/02 to 31/3/03; |
(b) HK$2,600 – incorporated after 1/4/03
|Annual return filling fee||HK105 – within 42 days after the anniversary of incorporation |
HK$870 – more than 42 days but within 3 months
HK$1,740 – more than 3 months but within 6 months
HK$2,610 – more than 6 months but within 9 months
HK$3,480 – more than 9 months
|Taxation||Nil provided income sourced out of Hong Kong|
|Disclosure of beneficial ownership||To company formation agent|
|Standard minimum paid up capital||HK$10,000.00|
|Standard authorised share capital||HK$2.00|
|Permitted currency of capital||HK$ plus any kind of foreign currencies such as US$, RMB, ￡, Euro etc|
|Minimum number of shareholders||1|
|Minimum numbers of directors||1|
|Public record of directors||Yes|
|Public record of shareholders||Yes|
|Location of directors meeting||Any where|
|Location of shareholders meeting||Any where|
|Telephone board meeting||Yes|
|Access to Double taxation treaty||No but HK has limited tax treaty with the US.|
|Requirement to file audited financial statements||Not to Registrar but to Inland Revenue Department|
|Requirement to file annual return||Yes but to the Inland Revenue and not the Registrar|
|Change in domicile||No|
|Local registered address||Yes|
|Who can incorporate?||Lawyers, accountants, qualified company secretary|
|Corporate Registration Efficiency||Incorporation takes about 1-2 weeks.|
|Availability of Name||As there are a few hundred thousands companies registered, names are not easily available.|
|Confidentiality||Details of shareholders and directors are public records but some degree of confidentiality is achieved using nominees structure.|
|Political Stability||Excellent. Since independence from British Hong Kong SAR has not been integrated into PROC’s economic and political systems.|
|Maintenance Cost||Hong Kong is one of the most expensive cities in the world. Expect to pay higher for professional services rendered. Mandatory audit and accounting requirement for HK companies add to the maintenance cost.|
|Legal System||Based on English legal system.|
|Regulator||The Company Registry is an excellent regulator.|
|Location||Hong Kong is connected by flights on daily or regular basis to all major cities in the world.|
|Exchange Control||Very liberal.|
|Rate of Tax||Provided income is not sourced in HK, no tax is payable.|
|Double Tax Ttreaty Access||Not being an independent nation, HK does not have tax treaty with any country.|
|Local Banking Services||Hong Kong is a major financial centre where there is large concentration of banks.|
|Time Zone||Same time zone with major Asian financial capital like KL, Singapore, Taipei, Beijing.|
|Reputation||Hong Kong’s status as a major world financial centre gives strong reputation to HK companies.|
Click the link below to see the banking option we have for Hong Kong Company.
How can I get more information on company formation in Hong Kong?
Please contact us if you wish to open a company in Hong Kong and we will be pleased to discuss your Hong Kong offshore company formation matters in greater detail.