Before incorporating a company in Hong Kong, you must first get the company name approved. This step ensures that the proposed name is unique and compliant with local regulations.
Directors of Hong Kong Companies
A Hong Kong company requires a minimum of one individual director, with no upper limit on the number of directors. Directors can be of any nationality and do not need to reside in Hong Kong. However, they must be at least 18 years old and cannot be bankrupt or have been convicted of any malpractices. It's not mandatory for directors to also be shareholders. Additionally, nominee corporate directors can be appointed alongside individual directors. Board meetings for directors can be held anywhere globally.
Shareholders in Hong Kong Companies
A private limited company in Hong Kong must have at least one shareholder and can have up to 50 shareholders. There are no residency requirements for shareholders, and they can be either individuals or corporations. Shareholders must be at least 18 years old and can be of any nationality. The same individual can serve as both a director and a shareholder, but this is not required. The company can have 100% local or foreign shareholding, and nominee shareholders are allowed. Shareholders' meetings can take place anywhere in the world.
Company Secretary Requirements
Appointing a company secretary is a mandatory requirement for Hong Kong companies. If the secretary is an individual, they must reside in Hong Kong. If the secretary is a corporate entity, it must have a registered office or place of business in Hong Kong. In cases where there is only one director/shareholder, that individual cannot also serve as the company secretary. The company secretary is responsible for maintaining statutory books and records and ensuring compliance with all statutory obligations. Nominee secretaries can also be appointed.
Share Capital
There is no minimum share capital requirement in Hong Kong. However, the common practice is to issue at least one ordinary share upon the company’s formation. Share capital can be denominated in any major currency, not just the Hong Kong Dollar. Shares can be transferred freely, although a stamp duty fee applies. Note that bearer shares are not permitted under Hong Kong law.
Registered Office Address
To register a company in Hong Kong, you must provide a local Hong Kong address as the registered office. This address must be a physical location and cannot be a PO Box.
Public Information Disclosure
Under Hong Kong Company Law, information about company officers, including directors, shareholders, and the company secretary, is public. Companies are required to file these details with the Hong Kong Registrar of Companies. To maintain confidentiality, companies can appoint corporate shareholders and nominee directors through professional services firms.
Hong Kong Taxation
Hong Kong’s corporate tax, referred to as profits tax, is set at 16.5% on assessable profits. There is a 50% tax rebate for income under HKD 2,000,000. The territory operates on a territorial basis of taxation, meaning only profits generated in or derived from Hong Kong are subject to tax. There is no capital gains tax, withholding tax on dividends, or GST/VAT in Hong Kong.
Ongoing Compliance Obligations
Hong Kong companies must prepare and maintain accounts, which need to be audited annually by Certified Public Accountants in Hong Kong. These audited accounts, along with the tax return, must be filed annually with the Inland Revenue Department. Companies must also file annual returns with the Companies Registry and pay an annual registration fee. The Business Registration Certificate must be renewed annually or once every three years, depending on the chosen registration period. An Annual General Meeting (AGM) is required each calendar year, with the first AGM to be held within 18 months of incorporation. Subsequently, no more than 15 months should elapse between AGMs. Companies may pass a written resolution in lieu of holding an AGM.
This guide outlines the basic requirements for setting up and maintaining a Hong Kong company, providing essential information for compliance and operational efficiency.
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