HONG KONG PRIVATE LIMITED COMPANY

General Information

Hong Kong is on the south east coast of China and consists of a large number of islands and a part of the mainland totalling approximately 1,025 sq. km. On 1 July 1997 all of Hong Kong reverted back to China and became a Special Administration Region within the People’s Republic of China.

Population

The population of Hong Kong is currently 7 million made up mainly of people of Chinese origin and is one of the most densely populated areas in the world.

Political Structure

Until 1 July 1997, Hong Kong was a British Crown Colony. A governor appointed by the Queen presided over the Hong Kong government, which consisted of the executive and legislative councils.

On 1 July 1997 Hong Kong elected its own legislature and maintained its court structure. The head of the government of the Hong Kong Special Administrative Region is the Chief Executive Officer. The Legislative Council is the legislature of the Hong Kong.

Hong Kong is the leading South East Asian centre for both finance and commerce and ranks as the world’s third largest financial centre after New York and London. There are more than 160 licensed banks with more than 130 foreign banks having representative offices in Hong Kong and a further 225 licensed deposit taking finance companies all of which play an active role in the financing of international trade and commerce.

Language

The official languages are English and Chinese, with English being used in the commercial and political context and Cantonese and Mandarin Chinese used widely in industry and domestic trade.

Type of Law


Common Law based on English Common Law.

Principal Corporate Legislation


Companies Ordinance (Cap 32).

COMPANY INFORMATION

Type of Company for International Trade and Investment
Private company limited by shares.

Procedure to Incorporate

Submission of Memorandum and Articles of Association and Incorporation Form with Companies Registry. (please refer to Schedule 1 for a detailed description of the registration procedures).

Restrictions on Trading

Cannot undertake banking or insurance or financial activities unless relevant licences are obtained.

Powers of Company

A Hong Kong limited liability company has all the powers of a natural person.

Language of Legislation and Corporate Documents
Both Chinese and English, and either one of the two languages can be used in the corporate documents.

Registered Office Required

Yes, a company must maintain a registered in Hong Kong where the correspondence from Hong Kong Government can be served.

Name Approval Required

Name needs not be approved and it is not possible to reserve a name too. It is essential to check that there is no similar or identical name on the Register maintained by Companies Registry, which would prevent the company being incorporated.

Shelf Companies Available

Yes, shelf companies are commonly used and are available for immediate delivery.

Time to Incorporate

Tailor-made company: 6-7 working days
Readymade company: can be completed within one working day

Name Restrictions

A name that is too similar to or identical to an existing company. A name that constitutes a criminal offence or is otherwise contrary to the public interest. A name that implies government patronage.

Names Requiring Consent or Licence

Building society, Chamber of Commerce, chartered, co-operative, mass transit, municipal, savings, tourist association, trust, trustee, underground railway, bank, insurance, assurance, reinsurance, department.

Suffixes to Denote Limited Liability Limited

Disclosure of Beneficiary Ownership to Authorities The particulars of the shareholder(s) are available to the general public. While anonymity can be preserved by using nominee services or setting up an offshore IBC to hold the share(s).

Authorised and Issued Share Capital

The standard authorised share capital is HKD10,000. The minimum issued capital is one share of HKD1 each.

Classes of Shares Permitted

Ordinary shares, preference shares, redeemable shares and shares with or without voting rights.

Bearer Shares

Company incorporated in Hong Kong is not allowed to issue bearer shares. However, privacy can be achieved by utilizing nominee services or setting up an offshore IBC to hold the share(s).

Taxation

The principle of Hong Kong income tax is that it is a tax on income that has its source in Hong Kong rather than a tax based on residence. Hong Kong does not therefore impose tax on non-Hong Kong source income even when remitted to Hong Kong. Consequently, if a Hong Kong company’s trading or business activities are based outside Hong Kong, no taxation will be levied in Hong Kong. Hong Kong companies with Hong Kong source income currently pay a rate of taxation on profits of 16.5%.

There is no tax on capital gains. Interest income and dividend income is also tax free. There are no withholding taxes. The local currency is the Hong Kong Dollar which is freely interchangeable but has a pegged exchange rate against the US Dollar. There are no exchange controls in Hong Kong.

Double Taxation Agreements

Hong Kong has no double tax agreement with any other country, with the exception of the Mainland China.

Licence Fee

The Business Registration and Levy Fee, currently USD60 (HKD450), is due and payable within one month of the date of incorporation and then annually on the anniversary of the first payment. Please be informed that the annual business registration fee will resume normal at 1 April 2009 and onward and the normal business registration and levy annual fee is US$315 (HK$2450). Any company registered on and after 1 April 2009 need to pay a business registration fee of US$315 at the year of incorporation.

Financial Statement Requirements

Hong Kong companies are required to prepare full audited accounts under the company laws. Also, a copy of the audited financial statements is to be furnished with Inland Revenue Department together with Profits Tax Return. The audited financial statements are not available to the public or to the foreign authorities except those of a listed company.

Director(s)

A minimum number of one (1) director is required and full details of these must be filed with the Companies Registry are available for public’s inspection. The director(s) can be of any nationality and be resident anywhere. There is no requirement for board meetings to be held within Hong Kong and directors may be resident anywhere in the world. Corporate nominee directors are permitted.

Company Secretary

Every private Hong Kong limited company must appoint a company secretary, who may be a natural person or a body corporate, but the company secretary must ordinarily reside in Hong Kong or in case a corporate company secretary, it must have a place of establishment in Hong Kong.

Shareholder(s)

A minimum number of one shareholder is required whose details are filed on the Companies Registry and are available for public’s inspection. Corporate shareholders are permitted and anonymity can be achieved by the use of nominee shareholders or offshore IBC holding company. The shareholder(s) can be of any nationality and be resident anywhere in the world and meetings can take place anywhere.

The above information is for guidance only and therefore the material contained herein should not be regarded, viewed or considered as an advice. You should contact your tax or professional advisers for appropriate detailed professional advice. We accept no liability for the accuracy of the information contained herein, nor any loss arising from reliance on it.



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