Incorporated Hong Kong Company Types

A company limited by shares is a company in which the liability of each shareholder is limited to the subscription price for the shares to which the shareholder has agreed to subscribe. Once a shareholder has paid the company the subscription price for the shares for which he has agreed to subscribe, he has no further liability. A company limited by shares is by far the most common type of Hong Kong incorporated company.

A company limited by guarantee is a company in which each member agrees to contribute a pre-agreed amount to the company in the event that the company is wound-up. A company limited by guarantee does not have any share capital. A company limited by guarantee is often used for charitable or non-profit endeavours.

OFCs are special types of companies designed to serve as fund vehicles. They are companies with share capital and the liability of shareholders is limited. Unlike a company limited by shares under the Companies Ordinance, OFCs may segregate assets and liabilities into different sub-funds. This means that the assets of one sub-fund cannot be used to satisfy the liabilities of another sub-fund.

Moreover, OFCs allow for redemption of shares without capital maintenance restrictions which apply to companies limited by shares. As a result, it possible for an investor to liquidate his investment at any time.

OFCs are well suited for hedge funds and enjoy broad exemption from Hong Kong profits tax.