Incorporating a company in Hong Kong is a straightforward process that offers several advantages, including its strategic location, business-friendly tax system, and robust legal framework.
Company Types
Hong Kong offers several types of business structures, including private companies limited by shares, public companies, and branch offices of foreign companies.
Requirements for Company Incorporation
- A company must have at least one director who is a natural person, and there is no restriction on the nationality or residency of directors.
- A company secretary who must be a resident of Hong Kong or a corporation.
- A registered office address in Hong Kong.
- A minimum of one shareholder (individual or corporate entity).
Incorporation Process
- Name Approval: The first step is to secure the company name with the Companies Registry. The name should not be identical to any existing companies in Hong Kong and should not infringe on trademarks.
- Document Preparation: Prepare the necessary documents, including the company’s Articles of Association, Form NNC1 (incorporation form), and the relevant incorporation fee.
- Submission to Companies Registry: Submit the required documents to the Companies Registry. Upon approval, a Certificate of Incorporation will be issued.
- Opening a Corporate Bank Account: Once the company incorporation is completed, the company can proceed with opening a corporate bank account in Hong Kong.
Post-Incorporation Obligations
Annual obligations include filing annual returns, renewing business registration, and maintaining proper accounting records are mandatory in Hong Kong.
Taxation
Hong Kong follows a territorial tax system, whereby only income generated within the city is subject to taxation. The two-tier profits tax rates, effective from the year of assessment 2018/19, apply a reduced tax rate for the first HK$2 million of assessable profits for both corporations and unincorporated businesses. For corporations, the first HK$2 million of profits will be taxed at 8.25%, and the remaining profits will be taxed at the existing 16.5% rate
Conclusion
In conclusion, incorporating a company in Hong Kong provides businesses with access to a strategic location, a business-friendly environment, a simple tax regime, strong legal protections, access to capital, and a skilled workforce, making it an attractive destination for companies looking to establish and expand their presence in Asia.