By virtue of its stable financial system and reliable legal infrastructure, Hong Kong is recognised as the world’s top 3 international financial centres. Many international banks, multinational companies, and major financial institutions have chosen Hong Kong as their regional headquarters or hub in Asia. Hong Kong companies are renowned, highly reputed and well-regarded by international business partners because businesses based here are required to abide by its stringent legal framework, and to comply with its statutory compliance, annual return filing, and tax filing obligations.
CORE can act as agents and help clients in the area of company formation in Hong Kong for all types of business structures. The most common business entity suitable for most international clients is the Private Limited Liability Company.
The following are the key guidelines to understand the respective requirements for company formation and incorporating different business entities in HK. Not in Hong Kong? Don’t fret. Our company formation services can be done online without a hitch. We can help you grow your company from Hong Kong, no matter where you are in the world. We are pleased to offer a FREE consultation to provide further details such as cost and other needs regarding company formation in Hong Kong. Please contact us via email (firstname.lastname@example.org) or by phone (+852 2157 8788) to schedule a FREE consultation.
- Limited Liability. When the financial liability of the company is limited, any liability compensation from shareholders when the company is unable to settle its debt liability is not required.
- Company Name. Businesses may have an English name, a Chinese name, or both. Conduct a free business name search to check on name availability with CORE.
- Company Activity. Existing company laws allow a Limited Company to engage in any business activities without restrictions like as a Natural Person. It is not required to report or register the nature of the business to the government.
- Public disclosure. Information of the company director(s) and shareholder(s) are records that are easily accessible by the public.
- Director. It can be a Corporation or an Individual, but at least one director must be a natural person. Directors do not need to be local residents, and there are no nationality requirements either. Each company must have a minimum of one director.
- Shareholder. It can be a Corporation or an Individual. Each company must have a minimum of one shareholder, and the maximum number of shareholders each private company may have is 50.
- Company Secretary. The person must be a Hong Kong resident or a Hong Kong-registered company. CORE can assist you and serve as the secretary to your business, to ensure that your company complies with this legal requirement.
Annual Accounting and Auditing. It does not matter if the company has recorded a profit or loss for the fiscal year or the size of its annual turnover, all businesses are required to submit its audited accounts and file with the local Tax Department. CORE can assist your business on this matter as our founder is a registered Tax Advisor in Hong Kong, who will be able to advise you on the tax benefits that your business may enjoy.
- Tax Rate. Since 2018, Hong Kong has established a two-tiered Profits Tax rate system. Businesses need to pay only 8.25% profits tax on its initial 2 million HK Dollars of assessable profit, and a 16.5% profits tax for the remaining assessable profits exceeding 2 million HK Dollars.
- Tax Benefit. Hong Kong follows a territorial principle of income tax, and businesses are taxed only on income with its source in Hong Kong, rather than a tax based on residence. Income earned elsewhere, even when remitted to Hong Kong, is not subject to Hong Kong profits tax at all. Consequently, if a Hong Kong company’s trading or business activities are based outside of Hong Kong, say in Europe or Australia, no taxation will be levied. This makes Hong Kong an extremely cost-effective tax-planning vehicle for trading. In addition, Hong Kong does not levy any Capital Gain tax, Dividend tax, VAT and interest tax. For more information on tax benefits, please visit our page here.
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