Hong Kong Company Registration
Company registration is the process of giving legal recognition to a business organization. It is a process Hong Kong law requires for tax compliance purposes and it is a process that is essential if the owners of the company wish to limit their own personal liabilities.
Though company registration procedures are straightforward, many questions that need to be answered before and after registration are not. Key threshold questions are whether to register a company in Hong Kong and if so, how to structure the company to minimize taxes and achieve commercial objectives. Answering these questions requires a more nuanced grasp of Hong Kong's offering as an international business and financial centre and a deeper understanding of Hong Kong's tax regime. Even after these difficult questions are answered, there is an ongoing issue of how the new company will comply with Hong Kong laws consequent to registration.
Timothy Loh Corporate Services has over 15 years of experience helping clients with Hong Kong company registrations. We assist clients throughout the company registration process, providing the necessary advice on these and other key structural questions and handling registration formalities. Following registration, we offer a full range of corporate services including Hong Kong company secretarial services with a view to ensuring that clients comply with statutory requirements consequent to registration and supporting clients in meeting commercial objectives.
What are the benefits of registering a company in Hong Kong?
Hong Kong is frequently chosen as a place to register a company because it is a global business and financial centre and acts both as a gateway to Greater China as well as an offshore tax haven jurisdiction. For more information on this topic, refer to our guide on the advantages of setting up a company in Hong Kong.
How does Hong Kong compare to offshore Caribbean tax haven jurisdictions?
In the 3 year period from 2017 to 2019, over 436,000 new companies were registered in Hong Kong (source: Hong Kong Companies Registry). In contrast, during the same period, the Cayman Islands only saw the registration of 42,000 new companies (source: Cayman Islands General Registry) and the BVI only saw the registration of 96,000 new companies (source: BVI Financial Services Commission). In other words, new Hong Kong company registrations outpaced the Cayman Islands by a factor of more than 10 times and the BVI by a factor of more than 4 times. Hong Kong is clearly preferred over popular Caribbean offshore tax haven jurisdictions.
How does Hong Kong compare to European tax haven jurisdictions?
In the 3 year period from 2017 to 2019, over 436,000 new companies were registered in Hong Kong (source: Hong Kong Companies Registry). In contrast, during the same period, Ireland only saw the registration of 68,000 companies (source: Companies Registration Office of Ireland) and the Isle of Man only saw the registration of 5,600 new companies (source: Companies Registry of the Isle of Man). As is evident, Hong Kong is more than 6 times more popular than Ireland and more than 80 times more popular than the Isle of Man.
How does Hong Kong compare to Singapore?
Hong Kong is frequently compared to Singapore. However, the data suggest that when it comes to company registration, Hong Kong is preferred by a wide margin over Singapore. In the 3 year period from 2017 to 2019, Singapore saw just over 185,000 new company registrations (source: Department of Statistics, Singapore) whereas Hong Kong saw just over 436,000 new company registrations (source: Hong Kong Companies Registry). As is evident, Singapore saw only one-third of the number of company registrations as Hong Kong did during the 3 year period.
What types of company can I register in Hong Kong?
There are 4 basic types of company which you can be registered in Hong Kong. You can register a Hong Kong incorporated company, a sole proprietorship, a partnership or limited partnership, a branch of a foreign company or a representative office of a foreign company.
What are the different types of Hong Kong incorporated companies?
There are 3 basic types of Hong Kong incorporated companies, namely companies limited by shares, companies limited by guarantee and unlimited liability companies. The most commonly used type of a incorporated company for businesses is a company limited by shares but a company limited by guarantee is frequently used for non-profit activities.
What taxes apply to Hong Kong companies?
Hong Kong operates a schedular tax system, meaning that instead of a comprehensive income tax, it taxes types of income. Profits tax will be apply to Hong Kong companies which carry on a business in Hong Kong and which have profits arising in or derived from that business. Hong Kong is regarded as a tax haven offshore jurisdiction because it has a low rate of tax and a territorial based tax system which does not tax income earned outside of Hong Kong.
Hong Kong Company Incorporation
Incorporation is a legal process to create a Hong Kong company that is recognized under the Companies Ordinance as a separate legal person independent from its owners. A Hong Kong incorporated company can own its own assets and incur its own liabilities and can sue and be sued in its own name.
How We Help with Hong Kong Company Incorporation
In our Hong Kong company registration service, we advise on pre-incorporation issues including choice of name, identification of suitable directors and share capital structure and we prepare and file documents to incorporate a registered company in Hong Kong.
We work closely with the hedge fund practice of our affiliated law firm, Timothy Loh LLP, in the case of open-ended fund companies ("OFCs") and with their corporate law practice in cases where there may be a need to customize the articles of association of a Hong Kong incorporated company or to put in place shareholder agreements to govern the relationship between shareholders.
Corporate Services Following Hong Kong Company Incorporation
We provide a full suite of corporate services following a Hong Kong company incorporation, including:
Provision of Hong Kong company secretary services. Under the Companies Ordinance, every Hong Kong incorporated company must appoint a Hong Kong company secretary. As a highly experienced company secretarial service provider, we ensure that the company complies with multitude of Hong Kong company law requirements.
Opening of Hong Kong bank account. In this service, we leverage our knowledge and that of our affiliate law firm in anti-money laundering regulations, tax laws and banking regulations governing how banks open accounts to maximize the chance of a smooth and timely opening of a company bank account.
Provision of a Hong Kong registered office address. Under the Companies Ordinance, every Hong Kong incorporated company must maintain a registered office address in Hong Kong. In this service, we act as an agent on the ground in Hong Kong to receive, filter and route government correspondence, legal process and business correspondence.
Provision of directors.
Hong Kong Company Incorporation FAQs
How long does it take to complete a Hong Kong company incorporation?
It is possible to incorporate a Hong Kong company within 1-2 days from the time the application for registration is submitted. We can help you to prepare all the documents necessary to ensure that the application for company registration proceeds on schedule.
Do I need to go to Hong Kong for a Hong Kong company incorporation?
No, you can incorporate a Hong Kong company from outside of Hong Kong. We can handle the incorporation formalities for you, acting as your company registration agent in Hong Kong. However, we must be able to verify the identity of the proposed shareholders and the directors of the proposed new company. As a result, we will need identification and proof of address documents to be certified in the place where you are located.
Do I need local Hong Kong shareholders or directors for a Hong Kong incorporated company?
No. There is no requirement for any Hong Kong resident shareholders or directors.
Do I need to have a Hong Kong address for a Hong Kong incorporated company?
Yes. Every Hong Kong incorporated company must have a Hong Kong registered office address to receive legal process and other communications. We can provide this address for you.
Do I need a Hong Kong company secretary?
Yes. Every Hong Kong company must have a Hong Kong company secretary. We can act as your company secretary.
What are the annual requirements for a Hong Kong incorporated company?
Every Hong Kong incorporated company must file an annual return with the Companies Registry, renew its business registration and complete an annual audit. The results of the audit are private and there is no requirement to file them with the Companies Registry. As your Hong Kong company secretary, we can help your new company to prepare and file the annual return and to renew its business registration.
What are the Hong Kong taxes applicable to a Hong Kong incorporated company?
Hong Kong taxes profits at a rate of 16.5% subject to a concessionary rate of 8.25% for the first HK$2 million of profit. However, profits are taxed only if a Hong Kong registered company carries on a business in Hong Kong and has profits which arise in or derive from Hong Kong. More information is available in our brief guide to Hong Kong taxes. As your Hong Kong company secretary, we can help you to file your annual tax returns.
Do I need to have a Hong Kong bank account to operate a Hong Kong incorporated company?
No, there is no requirement for a Hong Kong incorporated company to have a Hong Kong bank account to do business. Because Hong Kong operates a territorially limited tax regime, it is not uncommon to use a Hong Kong incorporated company to conduct business outside of Hong Kong and maintain no presence for the company other than its registered office address and company secretary.
Hong Kong Partnership Registration
A partnership is a form of business organization in which 2 or more persons carry on a business with a common view to making a profit. A partnership is not a separate legal person but a grouping of persons in an unincorporated form.
How We Help with Partnership Registration
Our Hong Kong company registration services includes the following:
Advising on whether a partnership is suitable and if so, what type of partnership may be right. Hong Kong offers 4 types of partnerships, namely general partnerships, limited partnerships, limited liability partnerships and limited partnership funds.
Preparation of partnership agreements
Handling registration formalities.
In the case of limited partnerships and LPFs, we can assist with the formation of Hong Kong incorporated company to serve as the general partner and the formation of a Hong Kong incorporated company to serve as the initial limited partner.
We work closely with the private equity practice of our affiliated law firm, Timothy Loh LLP in the case of LPFs and with their corporate law practice in cases where there may be a need to customize the partnership agreement or to setup a shareholders agreement to govern the relationship amongst the shareholders of the general partner.
Corporate Services Following Partnership Registration
Following the registration of a partnership, we offer a full range of services including the following:
Acting as the Hong Kong company secretary for each partner (including the general) which is a Hong Kong incorporated company. In this role, in addition to the services we offer for all Hong Kong incorporated companies, we leverage our extensive experience in company secretarial matters to help the partner to meet its fiduciary duties to the other partners, comply with statutory requirements applicable to partners as partners of a partnership and comply with the terms and conditions of the partnership agreement to which the partner is bound. At the same time, we can help to maintain statutory records of the partnership including registers of partners.
Opening of Hong Kong bank account. As with companies, in this service, we leverage our knowledge and that of our affiliate law firm to maximize the chance of a smooth and timely opening of a company bank account but this time, taking into account the special requirements which apply to partnerships.
Provision of registered office address for the general partner. In this service, we not only receive and route communications for the partner but, where appropriate, for the partnership.
Foreign Company Registration in Hong Kong
A foreign company may be registered in Hong Kong as a branch. If a foreign company establishes a place of business in Hong Kong, the Companies Ordinance provides that the company must register with the Companies Registry as a foreign company within 1 month of it establishing that place of business.
In our Hong Kong company registration service, we can advise on whether a foreign company has a place of business in Hong Kong, handle the foreign company registration procedures under the Companies Ordinance and advise on the appointment of an "authorized representative" to receive service of process. Once a foreign company has been registered, we can advise on formalities that come with foreign company registration in Hong Kong including annual and ad hoc filing requirements.
Registration of Hong Kong Representative Office of Foreign Company
An overseas company may carry on business through a representative office. In this case, the overseas company has no place of business in Hong Kong, in the sense that it has an office in Hong Kong that does not have any authority to enter into contracts. In our Hong Kong company registration service, we can handle business registration formalities and advise upon the limitations of a representative office.