hong-kong

Company FormationHong Kong

Company Formation in Hong Kong offers numerous advantages, including its impeccable reputation in OECD ratings, zero taxation on capital gains and dividends, and simple registration process that doesn't require physical presence.

With no currency control and confidentiality ensured for beneficiaries' personal data, Hong Kong is an attractive destination for setting up businesses. Business entities like Private Companies Limited by Shares, Public Companies Limited by Shares, and Branch offices cater to various needs.

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Why Registera Company in Hong Kong?

If you are going to buy a company in Hong Kong or register a new company in your name, the business solution will make the following advantages obtainable:

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Reputation

Impeccable reputation and good positions in the OECD rating.

Taxation

Zero taxation of capital gains, dividends, as well as VAT on operations that are carried out abroad after the company registration.

Simple registration

To open a company in Hong Kong the physical presence of the owners is not required.

Transportation

The possibility of acquiring vessels for cargo transportation and access to routes for goods transportation with a relatively low cost.

Confidentiality

The option of registering a company ensures the confidentiality of the personal data of the beneficiaries, even if nominee directors are involved.

Liberal

There is no currency control.

Bank accounts

Bank accounts can be opened in any jurisdiction after opening a company in Hong Kong.

Business Entitiesin Hong Kong

If your goal in the short term is to buy a company or open a new one in Hong Kong, you should be aware of such forms of legal entities that foreign entrepreneurs choose:

Private Company Limited by Shares

A body corporate where shareholders don’t bear any liability in excess of the value of their contributions, including unpaid. The number of shareholders, in this case, may be between 1 and 50. The constituent documents of a legal entity fix restrictions on the transfer and acquisition of shares by third parties. If you are going to open a company in this form, then consider the cases of such restrictions.

Public Company Limited by Shares

A corporate entity that is legally separated from its founders, who bear the limited liability for the outcomes of the entity’s operation. The liability of the owners and shareholders does not exceed the unpaid amounts of the value of the shares held. Under any conditions, the owners and shareholders do not risk losing more than the number of funds invested in shares. Registration of a company in this form gives the possibility of having more than 50 shareholders. The cost of implementing this option is significantly higher than in the case of a private limited company.

Branch

A variant of running a business by a non-resident company, which allows you to conduct identical activities as in the country of primary incorporation. The registration of a branch office may be refused if the commercial name of a non-resident company is identical to the name of a legal entity that is registered in Hong Kong.

Tax Systemin Hong Kong

While considering an option of buying or opening a company in Hong Kong, these tax highlights also should be taken into account:

Corporate income tax rates

(i) 8.25% is applied to the first HKD 2,000,000 and

(ii) 16.5% is applied to the remainder of the raised profits.

Personal income tax rate

May vary from 2% to 17%.

Value-added tax

not applicable (N/A)

Withholding tax rates

(i) dividends – 0%

(ii) interests – 0%

(iii) royalties – from 2.475% to 4.95%

Capital gains tax

(i) corporate – N/A

(ii) personal – N/A

Steps for Registering a Company in Hong Kong

Opening a company in Hong Kong involves the following steps:

Determination of business priorities that you intend to implement through a Hong Kong legal entity with the preparation of a business plan.

Selection of a suitable organizational and legal form for the future legal entity (depends on the nature and volume of the proposed operations that are planned to be carried out through the legal entity).

Formulation, verification, and reservation of a commercial name for a local legal entity.

Collection of the required data about the owners, beneficiaries, and managers.

For individuals, among other things, you will need to collect passport data, information about the place of residence, resume.

For legal entities – information on registration and current status of the legal entity, constituent documents, information on official representatives, and corporate structure.

Search and registration of an official legal address for a legal entity.

Drawing up constituent and registration documents.

Formation of capital for a legal entity with the provision of evidence of the legal origin of funds for such capital.

Submission of a package of documents for registration. Receiving confirmation in case of approval.

Registration for the purposes of hiring employees and paying taxes.

Opening a corporate bank account.

Issuance of a license and registration for the implementation of certain regulated types of business activities.

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