Founder's Guide on Registering a Hong Kong Company
30 November, 2021
The strategic position of Hong Kong is one of the key reasons it has become the most popular investment destination for overseas investors. Hong Kong's location in the center of Asia makes it simple for enterprises to break into the whole Asian market, from China to Japan. Because of the larger market, you'll be able to maintain high sales and profits. Other benefits of establishing a business in Hong Kong include low and straightforward taxation. To run your business in Hong Kong the entrepreneurs must get their startup incorporated as a company to get the benefits given by the Government. Hong Kong has a diverse range of profitable businesses in which to invest. If you have a terrific company idea and a solid plan, you should absolutely consider launching it in the city.
Hong Kong Business Opportunities
In Hong Kong, the appropriate business opportunities are waiting for you. Investors have always made a beeline towards the country to set up a firm because it is well-known as one of Asia's most growing business hubs. Particularly start-up businesses benefit from Hong Kong's favorable foreign business regulations, low tax rate regime, and, of course, a plethora of business prospects. Hong Kong's free and open market provides the cornerstone for doing business. This magnificent tradition, as well as the rule of law and judicial independence, are upheld by the administration. Furthermore, as compared to the rest of the world, taxes are significantly cheaper. Some investors are lucky enough to know right away which business area piques their interest and in which they wish to invest. Hong Kong is also one of the world's most important startup centers. The city is proud of the fact that it boasts over 2,000 companies, with about one-fifth of them being US-based. When compared to the United States, this shows that Hong Kong is a more appealing environment for new firms.
Registration of Company in Hong Kong
Registering a company is not so difficult in Hong Kong, one has to keep in mind the following steps and legal procedures and norms to be considered while getting your company incorporated. Here are the steps to be followed:
Step 1: Choose the type and name of the company
This is the very first step for someone who wants to start a business in Hong Kong. Choose the business structure that best meets your company's needs. The most common kind of Hong Kong business entities are limited companies, partnerships, and sole proprietorships.
Step 2: Deliver Application
Deliver the following documents, along with the relevant fees, to the Shroff on the 14th floor of the Queensway Government Offices, either electronically through "e-Registry" or "CR eFiling" mobile application or in hard copy from:
- Form NNC1 (for a business limited by shares) or Form NNC1G (for a company not limited by shares) for incorporation;
- A copy of the organization's articles of incorporation
- Notice to the Office of the Registrar of Businesses
Step 3: Collect Certificates
Download or pick up the Certificate of Incorporation and Business Registration Certificate ("the Certificates") if your application is granted. Certificates will be issued in either electronic or hard copy format, depending on how the applications are delivered. The legal effect of certificates in either electronic or hard copy form is the same.
Step 4: Obtain other permits or licenses
There's a good chance that your company won't need any permissions or licenses to operate in Hong Kong. As a matter of principle, Hong Kong, as one of the world's most free economies, allows anyone to operate in any business. Exceptions are made only when licenses and permits are required to safeguard the public interest (safety and hygiene, public health, and people's savings).
Step 5: Pay the government fee
You will be required to pay the necessary government fee when you submit the incorporation documents to the Companies Registry.
Step 6: Keep up with taxes and financial reporting
The Hong Kong Companies Registry will automatically notify the Internal Revenue Department of your company's existence at the moment of incorporation. Hong Kong is noted for providing numerous tax incentives to businesses, including:
- The first HKD 2 million in profits is taxed at 8.25 percent, and anything after that is taxed at 16.5 percent. One of Asia's and the world's lowest corporation tax rates.
- Companies conducting business outside of Hong Kong are subject to a territorial tax framework, which means they are not subject to profit tax.
- There is no capital gains tax.
- There is no VAT.
Requirements and Facts for Hong Kong Companies The private limited liability company is the most popular type of business registered in Hong Kong. Limited liability corporations are attractive because they have a long-lasting structure, a positive public image, limited responsibility for their owners, and a distinct legal personality in any matter. In addition, the standards and facts for Hong Kong corporations are quite clear. According to Hong Kong's Companies Ordinance, anyone above the age of 18 can form a company in Hong Kong, and the entire process will be governed by the Companies Ordinance (CO). Here are the requirements to be fulfilled :
- Company name - It's critical to find a name that hasn't already been taken and using Startupr's HK company name check feature ensures that it will be available and approved before you start the Hong Kong company formation process.
- Directors - In Hong Kong, a corporation must have a minimum of one individual director and a maximum of an unlimited number of directors. This person must be at least 18 years old, a natural person, and of any country; it is not limited to Hong Kong residents.
In addition, the director must not have been convicted of any wrong doings or declared bankrupt.
- Shareholders - In Hong Kong, a private limited corporation can have as few as one shareholder and as many as 49. This is also one of the most important requirements and facts for Hong Kong corporations, where shareholders must be over the age of 18 and can be of any country. Additionally, the director and shareholder may be the same person, or the shareholder may be a corporation rather than a person.
- Registered Address - When forming a business in Hong Kong, one of the most important requirements and information to remember is that you must supply a local Hong Kong address as the company's registered address. Furthermore, the address must be a registered address rather than a PO box.
- Taxation - Earnings tax, often known as corporation tax, is fixed at 16.5 percent of assessable profits for businesses incorporated in Hong Kong. In addition, Hong Kong follows the territorial basis of taxes, which means that only profits earned in or derived from Hong Kong are taxed in Hong Kong. Furthermore, there is no GST/VAT, income withholding tax, or capital gains tax.
- Ongoing Compliance - Preparing and maintaining accounts is one of the most important mandatory requirements and facts for Hong Kong companies. These accounts must be audited annually by Hong Kong-based Certified Public Accountants, and the audited accounts, along with the tax return, must be lodged with the Hong Kong Inland Revenue Department each year.
Get your company incorporated in Hong Kong with the Startupr
While the world-converting capacity in startups is every so often overhyped, a hit startups do have the capacity to create a considerable nice effect on the world. Startupregistry one of the leading business incorporation and company secretary service providers in Hong Kong can make your entrepreneurship journey in Hong Kong easier. They can deliver new strategies and insights into entrepreneurship and also help you to register your startup in Hong Kong.
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