Top Tips for Setting Up Your Company in Hong Kong

Are you interested in establishing a company in Hong Kong but aren’t sure where to begin? Do you know what are the procedures for setting up a company in Hong Kong? What are key things you need to focus on to make sure the process is fast and easy? This article was created to help you understand the Hong Kong company incorporation procedure and familiarise you with all of the tips that you should consider while setting up a company in Hong Kong.

What you will learn:

1. Benefits of setting up companies in Hong Kong?

2. Components involved in the company formation process

3. Tips for Hong Kong company incorporation

4. Benefits of employing an agency to register your company in Hong Kong

5. How can FastLane Help?

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What are the benefits of setting up companies in Hong Kong?

Hong Kong is recognized as the most economically liberal place on earth and is regarded as an excellent location for entrepreneurs. A lot of investors come to Hong Kong, and the following article can tell you why and how much it will benefit you to establish your business in Hong Kong.

Components involved in the company formation process

These are the minimal standards to meet before setting up a company in Hong Kong.

• Select a company name

Selecting a unique name is mandatory in the HK business registration process since any duplication with past or current firms will be rejected and the name can be Chinese, English, or both.

It’s also worth noting that certain words will need approval before HK business registration because the authorities might be concerned that they are connected in any way to the Central People’s Government or the Hong Kong Special Administrative Region’s government, or a department or agency of either. Company names with a connection will only be permitted if it is determined that there is a genuine connection.

If a company name is ruled by the Hong Kong Registrar of Companies (the “Registrar”) to be a criminal offence, indecent, or otherwise contrary to public interest, it will not be registered.

• Establish shareholders and members of the company

The shares in an organisation are the fractional ownership interests of those who establish it. Regardless of their residency, nationality, or whether they reside in Hong Kong or not, a new company in Hong Kong must have a sufficient number of shareholders. For a private limited company, there must be at least one shareholder, and the maximum number is 50. There is no requirement that the shareholder be a natural person — corporations (including foreign firms) are acceptable. The shareholders become members of the company after they have been registered.

• Name of the initial directors

There must be at least one director to handle the control and oversight of a private limited company, but there are no restrictions on the number of directors. The director is in charge of hiring all of the firm’s workers as well as ensuring that regulations are followed. The only legal condition for directors is that they must be at least 18 years old; there is no requirement that they be Hong Kong residents or shareholders or employees of the firm. Note, at least one director must be a natural person, and where a company is a director, one of the directors of that company must be a natural person. 

• Appoint a company secretary 

The company secretary is the company’s official representative and is in charge of keeping track of all corporate documents and requirements in Hong Kong. The company secretary can’t be the only director in Hong Kong but if there are multiple directors in the firm, they may be a director. A company secretary is not required to be a natural person or a shareholder/member of the firm and it is quite common for professional company services firms to be appointed as the company secretary. 

• Set up the registered company address

Since all Hong Kong firms must have a physical address in Hong Kong as their company registry HK address, most offshore businesses in Hong Kong begin with the company secretary’s address.

• Pay the share capital

The share capital requirements in different jurisdictions are typically quite high, but in Hong Kong, there are no minimum capital standards for companies. The only legal requirement is that at least one ordinary share be offered to one ordinary shareholder so that means companies pay a dollar per share in any currency (not necessarily have to be Hong Kong Dollars).

• Consider tax compliance obligations

The low tax rates in Hong Kong are one of the most appealing aspects of starting a business here. The corporate rate is among the lowest in the world, at 8.2% for the first $2000 earned and then 16.5 percent above that level. Hong Kong also has low personal income taxes, which range from 2 to 17 percent. It’s also worth noting that Hong Kong only taxes on a territorial basis and does not tax individuals on earnings made outside of the city. Hong Kong’s taxation system is quite simple as it does not have capital gains taxes, goods and services taxes or value added taxes, which are common in other jurisdictions.

• Gather necessary documents

During the HK business registration, the Company Registry (HK) will demand a range of documents such as…

• A ‘articles of association’ certified copy from the company. This document outlines a number of essential details, including the company’s name, shareholders, share capital, and limited liability declarations as set out in sections 81 to 85 of the Companies Ordinance.
• A certified copy of a passport and overseas residential address is required for non-resident directors and shareholders.
• A copy of proof of residential address and a Hong Kong identification document is required for directors and shareholders who are residents of Hong Kong.
• A certified true copy of the business registration HK papers (e.g., their own ‘articles of association’) for corporate shareholders and directors
• A duly completed hong kong company incorporation form that is similar to the company’s articles of association.

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What are tips for Hong Kong company incorporation?

Special company name approval is required

Circumstances in which a company name will not be registered such as…

• It is the same as a name appearing in the Registrar’s Index of Company Names
• If in the Registrar’s opinion, its use would constitute a criminal offence
• If in the Registrar’s opinion, it is offensive or otherwise contrary to the public interest
• It is the same as a name of a body corporate incorporated or established under an Ordinance
• The company name may mislead consumers or hinder fair competition, damage, challenge Chinese national unity, policies, social ethics, culture, or religion
• Special characters are not permitted and certain words that can imply business operations in certain industries

Perform name search from Company Registry (HK)

Applicants are advised to use the Companies Registry’s CyberSearch Centre at www.icris.cr.gov.hk or the Company Search Mobile Service at www.mobile-cr.gov.hk to see whether an intended name is identical to a company name that has already been registered in Hong Kong before submitting their applications.

When conducting a Hong Kong company name search, you can use the search mode ”Exact Name Search” to see any exact matches and it’s recommended to input the full and exact company name that is intended to be used, including all spaces, punctuation marks, and ending terms like “Company Limited”, “Limited”, “Company”, “有限公司”, “公司” etc. Please note that the names should only be in English or traditional Chinese characters since inputting different languages or simplified Chinese characters may yield no results.

Consider preparing a shareholder agreement of the company

In the event that firms have many shareholders, it is strongly advised that they enter into a written shareholder agreement to understand what they are getting involved in, as well as to protect themselves when any disputes between the parties to the shareholders’ agreement arise.

There are a lot of important reasons for shareholder agreements such as selling information rights, rights to be a director and making sure all shareholders keep HK company information confidential, etc.

Consider working with a professional & licensed trust and corporate service provider  

The Companies Registry (HK) is the regulatory body in charge of licensing trust or company service providers (TCSPs) thus any individual who wishes to operate a trust or company service business in Hong Kong must first apply for a TCSP license and adhere to the relevant regulations of the Anti Money Laundering and Counter-Terrorist Financing Ordinance. This is why it’s best to consider working with a professional and licensed trust and corporate service provider as your company secretary as they are already approved legally and can provide you with the services the best as they are already aware of what needs to be done legally.

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What are the benefits of employing an agency to register your company in Hong Kong?

Choosing an agency is actually more beneficial rather than choosing an individual due to reasons such as…

Prepare required documents and avoid missing documents

When you choose an agency as your company secretary, they will make sure that all necessary paperwork is completed and there are no missing papers to ensure the procedure runs smoothly.

The following are the documents that a firm may request while registering:

• The Articles of Association are a legal document that establishes the rules of operation for your business. These are documents that set forth clearly defined company rules and regulations. For example, they reveal how financial records will be handled and who will be appointed as directors in the firm.

• A properly completed business registration HK form with the following information:
  • The name of your company.
  • The company’s registered address.
  • A description of the company’s activities.
  • Details of the company’s directors, shareholders, and the resident company secretary.
  • If your company has directors and shareholders who are non-residents, make sure to provide copies of their passports and proof of residence in their countries.
  • In the case of local directors and shareholders, you need to provide copies of their identity cards.
  • In the case of corporate shareholders, you need to provide a copy of the business registration certificate hk for the parent company.
  • Liabilities of the company directors.
  • The share capital.

(If the documents are in a language other than English, you must submit an English translation)

Use the agency’s expertise to understand the Hong Kong market

It’s a fantastic idea to employ an agency to learn more about the Hong Kong market since these professionals have spent many years in the business and have a great deal of expertise assisting other firms to enter the market.

How can Fastlane Help?

As experts in the hk company formation procedure, we can definitely help you register a company in Hong Kong and get started in six ways.

If you would like to know  how we can help with your company registration in Hong Kong, click the article:

Top 7 Company Registration Firms in Hong Kong.