Hong Kong company formation - YB Case 2022
Registration period - 7, days
The best market offer – from 790 EUR
Hong Kong

Hong Kong company formation

Our address is: 21/F, Tower 2, 18 Harcourt Road, Admiralty, Hong Kong You can register a company in Hong Kong either in person at our Hong Kong office or remotely via the Internet Order

Features of jurisdiction

Hong Kong is a People's Republic of China Special Administrative Region (SAR). Hong Kong has rightfully earned the status of one of the world's major financial centers due to its location, low level of corruption, and loyal and competent government policy. Registering a company in Hong Kong is a very profitable business development decision, especially if you are targeting the Asian market.

  • Demanded business sectors

    The following are the most popular areas of business activity in Hong Kong: wholesale, logistics, Fintech, and IT.

  • Remote registration is an option

    A Hong Kong company can be registered remotely.

  • Corporate taxation

    The corporate tax rate is 8.25 percent for the first two million Hong Kong dollars, and 16.5 percent for the rest. Dividends are taxed at 0%.

  • Foreign investors' attitudes

    Hong Kong is open to foreign investment, making it a popular choice for foreign entrepreneurs looking to establish a presence in the Asian market.

  • Banks

    HSBC, OCBC, Standard Chartered, Bank of East Asia, Bank of China.

  • Legal system

    The legal system in Hong Kong is based on the English common law system.

Procedure for Registration

Company formation takes about a week and consists of the following steps:
  • First consultation
    Meeting with YB Case representatives in the Hong Kong office to clarify the client's details and requirements. Starting the company incorporation process in Hong Kong (initial consultation is possible remotely).
  • Reservation of title
    The company's name must be formed in accordance with Hong Kong rules and must meet all regulated requirements. The title may contain both Chinese and English.
  • Applying for a Hong Kong company registration
    When applying for a Hong Kong company registration, you must also apply for a business permit. The charter and agreement between the founders are also submitted, along with applications and payment of state duty.
  • An application for registration of a Hong Kong enterprise is being considered by the regulatory body.
    After receiving all required documents, the regulator (HK Companies Registrar) reviews the application and makes a decision on the company's incorporation in Hong Kong.
  • Obtaining an incorporation certificate
    The founders receive a certificate of incorporation containing the company's registration number after the company is authorized in Hong Kong. In addition, the founders are granted permission to conduct business.

Primary prerequisites

  • A minimum of one shareholder

  • Registered street address

  • At least one filmmaker

  • Annual shareholder meeting (possibly remotely)

  • Financial statements are due once a year

  • Minimum paid-up capital of HKD 10,000 is desired (required amount not set)

  • Local secretarial assistance

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Hong Kong company formation

Hong Kong company formation

Hong Kong is a world trade hub and an excellent Asian location for establishing a business or launching a startup. Because the government spent $5 billion in the Innovation and Technology Fund (ITF) and plans to set up a $2 billion Hong Kong Innovation and Technology Venture Fund in 2020 to empower private enterprise investment capital in startup companies, establishing a business in That Country will appeal to international investors. There business owners can form a company with almost any type of property and thus are frequently provided tax breaks.

In Hong Kong, the most popular areas for starting a business are:

  • Commerce over the internet.
  • Hardware.
  • Monetary technology
  • Services for Professionals.
  • Healthcare.
  • Data examination.
  • Education and training are essential.

The Perks of Opening a Business in Hong Kong

The chief reason businessmen select Hong Kong to enroll and perform company is just because of its strategically advantageous geographical location - close to China, with a reasonably significant market foundation. Another appealing feature for businesspeople from all across the globe is the country's rapidly developing economic model.

Furthermore, the following are the primary advantages:

  • The rules for forming a company have been simplified, and you can now start a business online within 24 hours.
  • Due to the country's free economy, it has a diverse range of activities.
  • The tax system is competitive, with all income earned outside of Hong Kong being tax-free.

The steps are as follows:

  • select an appropriate form of ownership;
  • select a company name;
  • select a framework of a company;
  • and submit a request to the Hong Kong Companies Registrar (CR).

Acquiring a business license

Getting a Hong Kong business permit doesn't really ensure that you'll be able to trade. It is a statutory necessity for doing business in Hong Kong. As a consequence, prior to actually starting commercial interests, you must ensure that you get all of the licenses necessary by this jurisdiction.

Additional licenses are required to conduct activities in some areas:

  • Services in finance.
  • Catering.
  • Production.
  • Telecommunications.
  • Application development is an example of technology.

The Hong Kong Department of Trade and Industry website lists all types of permits, licenses, and certificates required to conduct business in Hong Kong. Certain types of businesses must always be licensed.

Basic requirements for forming a company in Hong Kong

Following that, we will look at the key elements that must be present when forming a company in Hong Kong.

  1. Authorized capital – There are no minimum authorized capital requirements. Share capital may be held in any currency, not just local currency.
  2. Appointment of a secretary following the formation of a Hong Kong company - the law requires the appointment of at least one local secretary. The director is not authorized to carry out these responsibilities.
  3. Company name – You may not use the name of a company that has already passed the incorporation or registration stages. It's also illegal to use government names.
  4. Director – he can be of any nationality.

The final item on the list is a business plan, which is really the main document used to organize a company.

It should include all of the following corporate information:

  • Commercial purposes of all kinds.
  • Marketing strategies
  • Budget.
  • Employee personal information.

Business types in Hong Kong

Certain factors must be considered when choosing a business structure:

  • depending on the size of the company;
  • the amount of money invested in fixed assets;
  • and the presence or absence of employees.

Hong Kong's main business structures

  1. A minimum of one chairman and shareholder is required for an LLC. This type of business, on the other hand, does not necessitate the existence of capital.
  2. The parent company forms the branch, which regulates all of its activities and is responsible for all obligations.
  3. Subsidiary comparable to a branch, except it is responsible for its own obligations.
  4. Representation – lacks the authority to engage in profitable commercial activities.
  5. IP - suitable for small businesses; the owner bears full responsibility, but the profit is solely his.
  6. Partnerships are formed when two people agree to work together for the purpose of conducting business.

There are two kinds of such businesses:

  • The GP – investor is fully responsible.
  • The LP – investor is accountable for his contribution but has no control over the activity.

Formation of an LLC

Essentially, this form of company is popular among investors who own smaller businesses. It is a separate organization whose shareholders are liable for obligations in proportion to the amount contributed to the authorized capital. The stockholders could indeed exceed 50 people, regardless of where they live. In addition, there are no approved conditions for the least authorized capital - it does not exist in limited liability companies. In 2022, How to Form a Limited Liability Company The procedure for forming an LLC consists of several major steps:

  • make a charter;
  • complete the registration form;
  • make a notification to the Registration Bureau;
  • prepare data on authorized capital and shareholders;
  • documents should be translated into English if necessary.

All registration documents can be obtained from the Commercial and Industrial Information Department.

Following the selection of the company's original name, it will be necessary to apply for registration and, if necessary, special permits and licenses for the relevant business areas.

The registration certificate is available in two formats: electronic and printed, and both have the same legal force. Some businesses will be required to register with the Internal Revenue Service.

The preparation and submission of annual reports to the appropriate authorities is one of the mandatory requirements for businesses. Companies must also meet the following criteria:

  • appointment of an auditor;
  • renewal of the enterprise registration certificate;
  • annual meeting;
  • renewal of business licenses.

Companies are required to report any change, such as a change in address or secretary, the amount of share capital, or the number of shareholders. It is important to remember that traditional offshore companies are not permitted in Hong Kong.

In this jurisdiction, the procedure for forming an LLC is more complicated than for other types of business registration. There are also requirements for the disclosure of confidential information, such as information about directors, capital, and other registry details. If the company goes bankrupt, you can close it down.

Taxation of LLCs

The benefit of establishing a privately owned company is preferential taxation.

In 2022, an LLC is subject to the following tax categories: The income tax rate ranges from 8.25 percent to 16.5 percent; social security fees are paid by both employees and employers, with the rate equal to 5% of the employee's corresponding income.

Business Registration Certificate (BRC)

This is the Business Registration Certificate, which contains all of the company's precise data. Obtaining this document is among the essential factors for forming a company in this jurisdiction. A BRC application must be submitted no later than 30 days after the start of operations. The credential shows that the firm is legally valid.

Company identification number

The Internal Revenue Service (IRS) assigns an eight-digit unique number to each registered business. It is essentially required when reporting to the IRD regulator.

How to Form a Company

  • Registration is done electronically.
  • «CR eFiling»: A mobile application available from the App Store.
  • Paper documents should be sent to the Registrar of Companies.

The registration of a company can take anywhere from one hour to four working days. It is determined by the application method you select: the online option is the quickest.

Taxation

The income tax rate is two-tiered: the first $2 million USD is taxed at 8.25 percent, and everything above this amount is taxed at 16.5 percent. Income earned in this jurisdiction is subject to taxation. The declaration must be submitted at the end of the fiscal year of the company. All companies registered in this jurisdiction must comply with filing requirements with the Inland Revenue Department (IRD) and the Registrar of Companies.

Account creation

There are numerous banks in the country that are eager to offer advantageous terms of cooperation to both individuals and legal entities. They differ in terms of how to open an account and commissions.

Conclusion

The jurisdiction is strategically located, allowing access to the Chinese market, which is Asia's largest. The government makes every effort to attract foreign entrepreneurs and investors to set up a company in Hong Kong. This is a stable business environment with low tax rates.

The first step in starting a business in Hong Kong is to decide on the type of company, its name, and to gather all of the necessary paperwork. Government assistance is also appealing to investors. Tax benefits and an accelerated and simplified registration process.

It is important to remember that in order to conduct business in this jurisdiction, certain types of commercial activities will require the appropriate licenses and permits. Following a thorough examination of all types of businesses in the country, we determined that the most popular today is Ltd. YB Case specialists can advise you on all aspects of incorporating a business in Hong Kong.

Questions and Answers
What documents must I prepare in order to register a company in Hong Kong?

The documentation required varies depending on the BPF selected.

To establish a limited liability company in Hong Kong, you will need:

  • registration application form;
  • Charter;
  • shareholder information;
  • capital information;
  • business plan;
  • payment of state fees.

You will need to notify the appropriate authorities (Business Registration Office).

Can a non-resident set up a business in Hong Kong?
Yes, in accordance with applicable law, a foreign person can register a company in the Hong Kong SAR and open a Hong Kong bank account.
Hong Kong company registration terms
A company can be formed in this jurisdiction in as little as 7 days. The most affordable company registration service in Hong Kong. If you find a lower price, we will assist you in registering a legal entity in Hong Kong at that price. A consultation with YB Case specialists can provide you with the cost and a complete list of the required documentation for forming your company.