Company Formation in Hong Kong
Updated on Monday 13th November 2023
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BridgeWest offers full company formation packages in Hong Kong, in order to cover any of your various business needs: opening representative offices, establishing branches or subsidiaries, starting an NGO, providing accounting services or legal consultancy, tax planning and tax minimization strategy.
Offshore company formation in Hong Kong
Hong Kong is a desirable location for opening offshore companies by foreign entities. The advantages offered by this jurisdiction come from the tax system, the little intervention of the government in the foreign companies’ activities, the simple registration procedure, economic and political stability.
Starting a company in Hong Kong offers you the possibility to have 100% foreign members. The tax system is also friendly to foreign investors: for example, the corporate income tax is 16.5%, the VAT doesn’t exist and there are no estate tax capitals, gains duty and no withholding tax on dividends or interest. Also, the foreign profits are exempt from tax.
Steps for company formation in Hong Kong
Investors that wish to register a new business must know follow a few easy incorporation steps. The first step for starting a company in Hong Kong is to choose the name of the future company. The company’s desired name must be checked with the Companies Registry. The name can be reserved only as long as it is unique at a national level.
After that, the main documents must be submitted to the Registry: the registration application form, the Memorandum of Association and Articles of Incorporation, the passport copy of the founders, bank reference letter for non-resident shareholders or directors, copy of Hong Kong identity card for Hong Kong resident shareholders or directors and copy of parent company registration documents (only for corporate shareholders).
After 14 days from registration, the company must also deposit the following documents: notification regarding the registered address, the decision of appointing the director(s) and the secretary and their consent to act in that position and other documents requested by the Business Registration Office.
A bank account must be opened and within a month since the registration and the company must be registered at the Inland Revenue Department. Having a corporate bank account is a requirement for all company types, regardless of the jurisdiction of incorporation. For offshore incorporation, investors must open an offshore bank account.
Once the above steps are completed, foreign investors may start operating their business and enjoy the benefits of having an offshore company. Our consultants can help investors with legal advice on any of the steps mentioned above.
Requirements for offshore company formation in Hong Kong
An offshore company must appoint at least one director but their number may be unlimited. It’s not mandatory for them to be Hong-Kong residents. The company must have minimum one shareholder and a maximum of fifty. The shareholders may be natural persons or companies.
The company must also appoint a local individual or corporate resident to have the role of company’s secretary. In order to register a Hong Kong company, you must provide a local Hong Kong address as the registered address of the company – it must be a physical address.
Accounting services are needed in order to conduct a business in Hong Kong. For this, you can rely on our consultants, who can provide specialized accounting services for the needs for your business.
Please mind that operating a trading company, a retail shop, a travel agency, a restaurant, an employment agency, an education business, a financial services agency, an event management agency are activities that requires receiving a license, so it is important to apply for it at the competent authorities.
Services provided for Hong Kong company incorporation
Our consultants can assist in drafting the Articles of Association (necessary for the process of company incorporation in Hong Kong); the Articles of Association of the Hong Kong company can be signed through Power of Attorney.
Our team can also assist in drafting all other documents required for the incorporation of the Hong Kong company; these documents include: specimen signatures, special forms provided by the Company Registration Office in Hong Kong, passport copies, etc.
We can also help in offering finding a registered office in Hong Kong for your company, which is mandatory to have for starting a business in this offshore jurisdiction. Having a registered address in the country of incorporation is mandatory, including for offshore company set up. Additionally, we can help in setting up a bank account for your Hong Kong company.
Hong Kong key facts
Foreign investors have two choices in incorporating an offshore company in Hong-Kong. They may register a new company or buy an already registered one. In Hong-Kong, various forms of business may be chosen but the basic ones are the sole proprietorships, corporate entities and the partnerships.
Hong Kong has recently started to sign double taxation treaties in order to attract more investors. One of the reasons why many investors chose to open a private limited liability company in Hong-Kong is the fact that no minimum share capital is required at incorporation.
Foreign companies may open a business which can perform commercial activities (branches and subsidiary) or representative offices (only for marketing purpose). Companies may choose different ways of hiring personnel in Hong Kong, as publishing announcement in the newspapers or participating at job fairs.
How can investors hire foreign employees in Hong Kong?
Whether a business is run by Hong Kong residents or by foreign investors, it has the right to hire foreign workforce, as long as the minimum legal conditions are met. When hiring local workforce, the only procedures that must be completed refer to the provisions of the employment contract and the employment tax registration.
However, when we refer to the employment of foreign workforce, immigration formalities must be conducted in all cases, unless the law provides for an exemption. With regards to the standard employment framework in Hong Kong, we present the following:
- for the full-time employment contract, the minimum number of hours worked per week is of 40 hours, while the maximum is 50 hours;
- the working week is generally defined as 5 business days;
- Hong Kong provides paid annual leave for employees, but only for continuous employment contracts – they vary based on the number of years worked in the company (ranging from 7 days to maximum 14 days per year);
- the law also prescribes a probation period, which can vary from 1 month to maximum 6 months, as agreed in the employment contract.
Foreign employees can benefit from the same rights and obligations, but first they need to arrive here under suitable work permits, documents which fall under the supervision of the Hong Kong Immigration Department.
The work permit is generally issued for a limited amount of time and grants residency rights for the duration of the employment and this can vary depending on the type of permit the person has obtained. Please mind that foreign investors who want to start a business here must apply for suitable visas (such as the Entrepreneur visa).
In general, the visa application process for a foreign employee starts after the 2 parties, the employer and the employee, have agreed to initiate a work relationship and only after the terms of this employment have been established (including the payment of salary).
After this, the employing company initiates the visa application process on behalf of the foreign employee and the application is then reviewed by the Hong Kong Immigration Department. As mentioned earlier, visa formalities must be conducted by most foreigners, unless the law allows visa exemptions.
This can be the case of persons who arrive from countries such as Vietnam, Nepal or Taiwan. We invite you to contact us if you want to know what other visa exemptions can be granted to foreigners, based on their nationality.
We also welcome investors to address to us if they want to register a partnership in this country or if they need any other offshore company set up services. Of course, our team can represent businessmen in the process of obtaining business licenses or other types of permits.
Bridgewest provides company formation services in Hong Kong. Please contact us for more information and prices. You can rely on us for offshore incorporation, tax registration, hiring foreign workforce and completing the immigration formalities associated with it and many other matters of interest for investors.