What is Company Secretary in Hong Kong And Why Is It Required?

Hong Kong is considered a free economic zone and one of the offshore business centers to incorporate a company. Hong Kong has obtained the status of “the freest economy in the world” for 1995-2019 and provides companies with the perfect platform for them to reach unprecedented heights in Asia and internationally. First of all, you have to formally set up your company in Hong Kong.

The Companies Ordinance of Hong Kong states that, apart from other obligations of registration in the jurisdiction, having a company secretary is also one of the requirements.

Here, we will describe the duties, functions, and importance of the company secretary in Hong Kong and determine why should they be done correctly.

What does a Company secretary in Hong Kong do?

In Hong-Kong, a company secretary is the named representative of the business, who is responsible for ensuring that the company and its activities are conducted within the law. The company representative may be referred to as “secretary” but the duties are not clerical.

Why is Company Secretary Hong Kong Important?

The company secretary, which is one of the most important representatives, plays a significant role even beyond compliance facilitation, when you incorporate a company in Hong Kong. Some of the main reasons why you should have a company secretary are as follows.

Statutory Requirement

A company secretary is not a choice you can dispense with when registering a company in Hong Kong. Under the Companies Ordinance, if you don’t have a secretary, your company will not be registered. You can also be charged if you attempt to function without a company secretary. Hence, choose the best company secretary before commencing the registration process for you business.

Connecting Your Company to the Hong Kong Administration

A bridge that links your company to the Hong Kong administration is the company secretary. This implies that the secretary is responsible for all explanations that the government agencies could need about the company.

Ensure Compliance

The business operations in Hong Kong are regulated by some specific laws and policies. A secretary will be very useful for you in understanding and observing the peculiarities of local corporate, financial and fiscal obligations and not to let the business come into conflict with the law.

Responsibilities of a Company Secretary Hong Kong

The range of duties of your Hong-Kong company secretary is wide, starting from managerial and ending in administrative. Some of these responsibilities include.

Assisting with tax compliance

With a professional company secretary in Hong Kong who will ensure compliance with the taxes, being one of his/her primary responsibilities, the magnitude of the problem will be considerably reduced. One of the first things to do about the Hong Kong administration is that on tax matters. A company secretary is an individual who leads to make sure that your company is on the right track and pays all the taxes. Here are some of these roles:

• The Company registered with the Inland Revenue Department (IRD) after its incorporation. It is critical to make sure that the company is listed in the government records for identity.
• Therefore, more approval may be required for a business in terms of the taxes involved. You will notice the high importance of this role when you are dealing with tricky tax problems that require you to look for answers from the authorities.
• At the end of every fiscal year, the company secretary makes sure that the tax returns are prepared as per the legal procedures and handed over to the relevant department in time. This is also desirable to make certain that you get any tax rebate deserved and that you do not attract penalties.

When you register a company in Hong Kong, the company secretary is required to hold all the statutory documents. This provides the government agencies with an immediate and convenient way to get the particular documents they need. The company secretary will be contacted by the Inland Revenue Department for a record inspection, for instance, in the case of a tax compliance issue of the company.

However, on the records, the company secretary is to keep the records updated whenever their details change. For instance, when a shareholder buys more shares in the company, the secretary should update the register of shareholders & directors.

In order to keep the shareholders properly informed about the company’s operations, the secretary is also in charge of the reproduction and distribution of various reports and accounts.

Organize and Attend Board Meetings

Your company secretary is also required to arrange and attend all your company’s board of directors or shareholders’ meetings. The secretary is expected to help in the formulation of the main agenda, preparation of the minutes of these meetings and to ensure that proper procedures are followed.

The company secretary Hong-Kong also contributes in compliance depending on resolutions that are made by the board. The secretary sees to it that the decisions taken during the meetings are executed in accordance with Hong Kong laws and policies.

Post Incorporation Filing

You have chosen a particular structure for your Hong Kong company at the time of incorporation but it is likely that you will have to modify the setup later. Some of these changes may involve removal or addition of shareholders or directors, change in the company name, increase/decrease of the company’s share capital, or change of the registered address. Upon these changes occurring, the Hong-Kong company secretary is required to prepare the documents on the changes and file the documents with the registry.

Communicate with Different Stakeholders

In Hong-Kong, another indispensable role played by the company secretary is working with the various stakeholders. Especially, the secretary has to cooperate with organizations, which influence the company activities. Other may include Hong Kong Stock Exchange, Inland Revenue Department, and Companies Registry among others. Such collaboration helps the secretary to realize immediately when new policies are required, when new regulations are made, or prompt actions need to be taken. In addition, the secretary must work closely with the directors, the shareholders, and other officers in the company.

NOTE: However, the duties we have mentioned above are the most important but a good company secretary in Hong-Kong will do more. Most of the companies depend on company secretaries to comprehend the new market, particularly when the business is new. In other cases, the secretary is useful in helping to identify the best staff and daily operations.

Who to Appoint as a Company Secretary Hong Kong

Looking at the above roles and responsibilities of a company secretary in Hong Kong, one thing is clear: you have to choose the best candidate, and only then can you win. In that case, the secretary must be a Hong Kong resident of a corporation that has been incorporated in Hong Kong.

Each company secretary in Hong Kong holding a practice license of the Trustees Association has to be a TCSP License holder from March 2018.

Below are the criteria you should use in selecting a company secretary position.

Corporate Governance Expertise

Company secretary in Hong Kong is one of the responsibilities involving the corporate governance. Consequently, seeking a secretary who has both professional and formal training in company secretarial is an intelligent decision to make.

Another requirement would be to be motivated about your position having specifically allocated time for understanding all the newest regulations touching on the business.

Operational Efficiency

A company secretary has many important tasks to perform, but the two that stand out are their participation in board meetings and their advice to directors concerning compliance issues which are critical for the business.

Hence, locating a proficient secretary who will assist in crafting strategies that will lead to the business’s success should be cautiously considered as one of the key factors to consider.

Strong Planning Skills

The portfolio of a company secretary in Hong Kong is based on strong organizational skills, thus the importance of time management, planning, and monitoring is an essential skill in the daily management of a company. The secretary will succeed in organized meetings if a good planning strategy is applied. Everyone involved will abide by the different schedules.

Checking previous work that the candidate did is also a good way to know how thorough and good s/he is in planning. If they were happy, there would be a good chance that you would feel the same way.

Exceptional Communication Skills

Taking Hong Kong as an example, a vast majority of the job responsibilities of the company secretary span communication with various types of people. Accordingly, the secretary should be in charge of providing other stakeholders including directors, managers, and investors with timely information. 

• Emotional intelligence
• Negotiating skills
• Teamwork skills
• Language skills
• Diplomacy

Accountable and Assertive

A significant role that a company secretary Hong Kong plays is acting as the keeper of the company’s records, therefore being the one who is in the know about the company’s affairs. So, in your case, the person with the highest integrity should be your choice for secretary of state.

The position of the secretary is crucial in leading governance in the organization, therefore the grooming of one who is courageous and committed is integral. On the contrary, the secretary must be the most autonomous and highly communicative person who draws attention to problems that can injure the brand.

Committed

To function as an excellent company secretary Hong Kong, he or she must exhibit absolute dedication. The secretary should look for opportunities to reach goals and accomplish objectives of the short-and long-term running of the organization.

Reasons to Choose a Consultancy Firm for Your Company Secretary Hong Kong Role

Seeking the qualities of the best company secretary is one of the practical ways of getting the best one and using an agency to select for you is a good choice. There are a lot of agencies that one can use the services of to offshore one’s company in Hong Kong. The agents are well trained and have experienced a lot in helping other companies that want to save money in taxes by registering in other countries.

Here are the main benefits of using an agency as your company secretary. 

Agencies can aid in company registration and act as company secretary

Selecting an agency to serve as your secretary is a crucial move, and it is even recommended that you do this before filing the registration process. Otherwise, it can also be used as your office address. This will assist in the reduction of the expenses linked with securing your own office and filing the business papers as quickly as possible while enjoying all the services provided by a professional business secretarial.

Consultancy agencies are managed by professionals specializing in secretary services

The advantage that consultancy-based companies offer to their customers is they are run by the experts with gathered experience. It is their area of study and a profession in which they are well versed. They base their operations on corporate governance and will do their best to ensure your offshore company will continue to run smoothly. This professionalism makes sure that they (consulting firms) are the best choice for the companies that are planning to migrate to Hong Kong for the first time.

Consultancy agencies possess extensive experience and skills for company secretary Hong Kong for years

Following the incorporation of a place in Hong Kong, you can tell here that the operating conditions or environment here are very different from what you may have experienced in the country you have come from.

Being in the Hong Kong business market for some time, agencies have seen these common mistakes that most businesses make. Now, you can avoid these mistakes and get customized help according to your company’s needs. In addition to implementing their strategies, their expertise will aid you reach your business goals.

Consultancy agencies can assist in maintaining the significant controllers register (SCR)

Having the 2018 amendment to the Companies Ordinance as its backdrop, all companies mandatorily must prepare and keep up an SCR. If you’ve decided to run with the agency that provides your company secretary services, it can also be a great help to organize, keep, and update the register.

Regarding the company secretary in Hong Kong, you do not want to hire someone who is not good in the position and just let the business sit with its problems. Make sure to consider the best agency that might have shown credible evidence of expertise as well as staying committed to creating the outward bond for your company.

How FastLane Group Can Help?

Fastlane can act as your Hong Kong company secretary – stepping in to help you through various aspects of business registration and legalization in Hong Kong. For companies who are just getting started operating in Hong Kong, having a professional and experienced firm at your side can help you avoid the pitfalls that many new companies or businesses fall into.

Ready to learn more? Contact the Fastlane team today, and find out how our services can help your business in Hong Kong – and much more!