Located in the heart of the Asian continent, Hong Kong is a major financial center that attracts hundreds of businessmen from all over the world. If you’ve decided to register an international company in Hong Kong, you'll be interested to know about the main advantages of this jurisdiction:
- most markets in Asia Pacific & mainland China are within easy reach;
- the HK airport is the 5th busiest international airport;
- availability of developed business infrastructure makes opening a business in Hong Kong;.
- financial support from the local government helps stimulate the growth of SMS enterprises.
- personal income tax rate starts at 2%, corporate tax is 16.5%, unincorporated businesses are taxed at 15%.
- those interested in registering an international business in Hong Kong can gain access to markets in the PRC thanks to CEPA.
- opportunity to open a multicurrency account in HK SAR;
- possibility to open a PayPal account in HK;
- a separate legal system based on English common law.
- visa-free travel for 180 days;
- availability of qualified English-speaking personnel.
Requirements for registering a company in Hong Kong:
- unique name;
- authorized representative;
- directors (minimum 1);
- shareholders (no less than 1 shareholder; one hundred percent foreign ownership is allowed);
- secretary (must be a Hong Kong resident);
- share capital;
- registered address.
Registering a company in Hong Kong may take up to 2 weeks.
It’s possible to remotely register an LLP in HK SAR, create a partnership in HK SAR, or open a foreign business in HK SAR. When choosing a name, you should keep in mind that it must have the ‘Limited’ or ‘Ltd’ ending. Those considering registering a business in Hong Kong are prohibited from using words that imply any connection with a local, state or national government.
The company must keep accounting records & undergo an annual audit.
All businesses must obtain a Registration Certificate from the IRD within 30 days from the date of starting their operation. Failure to apply for registration of a Hong Kong entails stiff penalties.
Registering a LLC in Hong Kong
LLCs are exempt from income tax on profits earned abroad. LLCs are separate legal entities and may carry out activities that differ from those of their owners. LLCs’ founders are required to submit audited tax returns at their AGMs.
No minimum share capital is required; no government approval is necessary to register an LLC in HK SAR either.
Opening a Branch in Hong Kong
Branches can trade within the limits set by their parent companies. They can do business only after obtaining a license in HK. Branches can commence their activities 30 days prior to registering in the Company Register.
Foreign entities seeking to open a branch in HK must register within 30 days from a date of their establishment. Branches can invoice local customers, sign local sales contracts & generate profit from local customers.
Their founders must open a bank account & draw up an AoA. Subsidiaries are taxed the same way as resident entities. They are also required to ensure compliance with requirements for annual financial reporting.
Hong Kong: Opening a Representative Office
A representative office is only allowed to promote its parent company’s business & conduct marketing research. If a company only has an HK-based representative office, it’s required to appoint a local sales agent.
Potential applicants must pay a fee of 250 HK dollars (valid for 1 year). It gets updated annually since the amount set by the government is subject to change.
Hong Kong: Opening a Corporate Account
Physical presence of potential clients is necessary. Even if there’s an opportunity to fill out an online application form, bank representatives can only give their approval after a personal meeting. Opening an account usually takes up to 2 weeks.
Documentation that must be submitted includes:
- bylaws & minutes;
- documentation confirming share capital structure;
- search reports;
- IDs of all stakeholders/beneficiaries & partners;
- any documentation related to appointment of essential personnel (e.g. BoD members).
Considering opening a company in HK SAR? Need advice on registering a company in HK? Please consider contacting IQ Decision UK.