Hong Kong Companies Basic Requirements
Name – the company names must be reserved and approved prior to incorporation.
Directors – A company must have at least one director with no maximum limit. Directors may be individuals or companies and need not be Hong Kong residents. They must, however, be 18 years old and not bankrupt or guilty of crimes.
Shareholders – Private companies may have from one to 50 shareholders who do not have to be resident in Hong Kong. Hong Kong companies may be 100% held by foreigners.
Company Secretary – A company secretary must be appointed who must be resident in Hong Kong and if the secretary is a company that company must have a registered office in Hong Kong. Company secretaries are obligated to maintain the statutory books and company records.
Share Capital – Similar to the situation elsewhere, Hong Kong companies have a concept of authorised and issued or paid up share capital. There is no minimum share capital requirement, but the norm is to have an authorised share capital of HK$10 000 with 10 000 ordinary shares of HK$1 each. Although this can be increased at any time it does result in a capital duty of 0.15 being due. Very usefully shares capital can be issued in any major currency. Bearer shares are not permitted.
Registered Address –A local registered address is required which must be a physical address.
Public Register – As is the case in the UK, Hong Kong requires that details regarding company officers or directors, as well as shareholders and the company secretary are public information.
Taxation –Profits tax or corporate Income Tax, is currently set at a rate of 16.5%. Importantly this is calculated on a source basis only. Hong Kong does not have capital gains tax, withholding tax on dividends or GST/VAT.
Audit – Companies must prepare and maintain proper accounting records which are required to be audited annually and a return must be filed with the Companies Registry.
Audited accounts and a tax return must also be submitted annually and an annual registration fee paid. Similarly a Business Registration Certificate must be be renewed one month before expiration annually.
An Annual General Meeting must be held once a year.
Non Resident issues with regards to forming a company in Hong Kong.
When setting up a company in Hong Kong you should take cognisance of at least the following:
- Although a local director is useful it is not compulsory.
- Hong Kong companies may be operated from outside of Hong Kong but obviously that comes with a risk that it will then be taxable in that country on the basis of management and control tests.
- Frequent visitors to Hong Kong can apply for a HKSAR Travel Pass.
- For those people planning to relocate to Hong Kong it will be necessary to get an appropriate visa.