Speedy Company Formation in Hong Kong
Why Register a Company in Hong Kong
Hong Kong, a thriving cosmopolitan city, is well known for its luxurious skyline and profound natural harbour. It is spread over 1,104 square kilometres and is home to more than seven million people. In the 1990s, Hong Kong was globally acknowledged as one of the fastest-growing economies in the world, and ever since Hong Kong company incorporation has been popular with investors. There was a new chapter added in the history of this region when in 1997, Hong Kong was recognised as Special Administrative region under Chinese rule, thus peacefully ending Britain’s long-term rule over the island and making it a perfect destination for company formation in Hong Kong.
Additionally, Hong Kong is not only surrounded by the Pearl River Delta and the South China Sea but it is also located between the Taiwan Straits, the South China Sea and the Pacific Ocean, thereby making it a global platform for maritime ports. Therefore, registering a company in Hong Kong allows you to access the world’s largest market due to its service-based economy.
Types of Companies in Hong Kong
The most common types of companies in Hong Kong are companies, sole Proprietorship and Partnerships. The procedure for Hong Kong company formation is easy and convenient as compared to other regions in the world.
Limited Liability Company: The most common business vehicle is a Limited Liability Company. A limited liability company offers protections of personal assets from business risks and liabilities and has separate legal status. Companies can be Limited Liability Company as well as Unlimited Liability Company.
Private Limited Company: The preferred choice in Hong Kong is Private Limited Company where liability is only limited to the assets in the company and the personal asset is protected from business risks and liabilities. Most small and medium sized companies in Hong Kong are set up as “private companies limited by shares” and are commonly referred as private limited companies. There are many tax benefits and incentives available in favor of private limited companies in Hong Kong.
Public Limited Company: A public company limited by share is logically incorporated company in which shareholders are more than 50. Generally an average or large size of companies who had achieved significant growth in the industry chooses public limited company. Most public companies are listed on stock exchange. The main advantage of a public company is easy access to capital, strong public perception and ease of implementing merger and acquisitions. The disadvantages include public disclosure requirement, time consuming process, complex structuring and expensive efforts to establish these.
Public Company Limited by Guarantee: A company limited by guarantee has no share capital. It has members and not shareholders, who undertake the share of liability which becomes due in the event of wind up. The advantage is the members enjoy limited liability and have independent control over business. The disadvantage is that the profit cannot be distributed and there is lack of working capital. This form of business is meant for Non-Profit Business Organizations.
Sole Proprietorship: Sole proprietorship is suitable for small scale and low risks businesses with sole proprietorship. It is easy to setup the business as sole proprietorship. However, this is not recommended business structure for entrepreneurs as it does not constitute a separate legal entity and does not protect owner’s personals assets from business liabilities and risks.
Partnership: The Business structure allows two or more persons to share ownership of a business. Partnerships enable a sharing of responsibility and increase the ability to raise the funds. However, the partners are equally and individually liable for the actions of the others partners. The most common form of partnership is a Limited Partnership, as it offers limited liability to limited partners. Partnership is governed by the Partnership Ordinance and is of two types: General partnership and Limited Partnership.
i. General Partnership: Similar to sole proprietorship, general partnership makes every partner in the firm personally liable for debts and liabilities of the business. Additionally, each partner becomes liable for the actions of another partner (as long as the act is done in course of the partnership business).
ii. Limited Partnership: Limited partnerships establish both general and limited partners. A general partner has unlimited liability for the firm’s debt and is responsible for day to day running of the business, while limited partners liability limits liability to the amount of unpaid share capital of the firm. Limited partners cannot participate in the management of the partnership.
Foreign Company Office: Foreign Company interested in setting up company in Hong Kong can register a branch office, subsidiary or a representative office.
Steps for Company Formation in Hong Kong
- Choose at least three names for the proposed company
- Send the proposed company name to Hong Kong Commercial Registry for approval
- Basic information about company secretary, shareholders and directors which includes
- Passport Details
- The number of shares subscribed and the registered company address has to be approved
- The last step involves you sending a copy of identification documents & address proof to us
Requirements for Company Incorporation in Hong Kong
Basic Requirements for Company Formation in Hong Kong
- Company Name
- Minimum one Director
- Minimum one shareholder and can go up to 50. The shareholder can be the same person as a director
- One Company Secretary
- Local registered address
Documents Required to Register a Company in Hong Kong
- Incorporation form – Form NNC 1 (for company limited by shares) or Form NNC1G (for company not limited by shares)
- Articles of Association of the proposed company
- Notice to Business Registration Office
- Consent to act as a First Director (Written resolution)
A “Consent to Act as Director” should be signed by the founder member if he is also the director. The content statement in the form must be signed by the other directors or they must deliver Form NNC3 “Consent to Act ad First Director”. However, this should not take more than 15 days from the date of incorporation. In the case of failure of delivery of Form NNC3 within the specified time period, the company as the as the individuals will be penalised.
Our Hong Kong Company Formation Services
- Preparing the relevant documents for formation of a new company in Hong Kong
- We providecompany secretarial services in Hong Kong for the first year
- We provide Registered Address and Correspondence Address for the first year
- Service of Registered Address
- Our Company Kit includes one pre-inked stamp, 20 copies of Memorandum & Articles of Association (“M&A”), a Share Certificate Book and Statutory Book
- We arrange the appointment with the Local Bank for opening of corporate bank account
- One set of Certified True Copies for opening of bank account
Advantages of Company Registration in Hong Kong
- Hong Kong is an open economy in the world for the last 18 years
- It is the second easiest place to do business in world
- It is the world 11th largest exporter of commercial services
- Hong Kong has a 3rd largest stock market in Asia and 6th largest in world
- It is a 2nd largest recipient of foreign direct Investment in world
- Has free trade and investment policy
- Hong Kong has the biggest free trade zone and is on the white list of the OECD
- There is no capital gains tax in Hong Kong
- There is no withholding tax on interest, dividends and royalty
- Foreign dividends are not subject to Hong Kong income tax
- Complete freedom of capital movement
- Hong Kong has an excellent banking system and communications infrastructure
- Features robust and well-organized financial market
- Close proximity to markets in Asia
- High-tech infrastructure with experienced support services
- Highly skilled workforce
Time Period for Company Formation in Hong Kong
It usually takes 4-7 days to register a company in Hong Kong.