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Hong Kong Company Formation

(Hong Kong Private Limited Company)

Overview

Overview of a Hong Kong Private Limited Company

Currently, Hong Kong is the absolute best option out there for a multi-currency corporate account (16 different currencies), with internet banking at one of the largest banks in the world, in one of the world’s premier and largest offshore banking jurisdictions. Only Hong Kong Private Limited Companies are eligible.

The Hong Kong Private Limited Company formation offered by Sovereign is a private corporation limited by shares. This is the most popular form of incorporation in Hong Kong. This type of company is an appropriate vehicle for a business that desires to limit its liability, seek solely private funding, and produce financial returns for its shareholders.

Hong Kong offshore companies benefit from the jurisdiction not being on the list of worldwide “tax havens”, thereby avoiding potential complications from authorities. Offshore companies also benefit from a politically stable environment, a free port, free flow of capital and a freely convertible HK dollar, in a jurisdiction being ranked the freest economy in world for the 20th consecutive year.

Since the British handover in 1997, Hong Kong has become the gateway into China and with the development of the Closer Economic Partnership Arrangement (CEPA) economic and trade relations will continue to tighten. The new CEPA arrangement offers preferential access to China’s markets, adding another reason why international businesses choose Hong Kong as a their base of operations. 

Honk Kong is one of the most popular formation jurisdictions due to the city being an international center of information exchange, finance and trade. It is the third largest financial center in the world and the largest in South East Asia. Since the inception of Hong Kong’s offshore sector, it has had over a million companies incorporate, thanks in part by its regulatory environment and competitive tax system.

For more information on the Advantages of Hong Kong as an Offshore Financial Center, click here.

Top Uses

Top Uses of a Hong Kong Company 

There are many uses for a Honk Kong Offshore Company. One can be set up and used for any legal purpose and for any legal activity, including but not limited to:

  • International trading
  • Asset protection
  • Yacht registration
  • Tax avoidance
  • Protection and ownership of intellectual property
  • Estate planning
  • Confidentiality
  • Share ownership in other companies
  • Financial management
  • Investment holding
  • Leasing of other assets
  • Ownership of intellectual property

However, a Hong Kong-based Offshore Company cannot undertake any business in the banking or insurance sectors unless the relevant licenses are obtained.

Advantages

Advantages of a Hong Kong Company 

There are a number of advantages in forming an offshore company in Hong Kong, including but no limited to:

  • Hong Kong is major trading entity in its own right and is one of the largest importer and exporter centers in the world.
  • Hong Kong incorporates more companies per annum than any other jurisdiction (about 50,000 each year).
  • The vast majority of Hong Kong companies are conducting real trade business in the region, and do not serve as asset protection companies or vehicles, making HK more credible than other tax havens.
  • Hong Kong is a well-known and respected jurisdiction that is not blacklisted anywhere.
  • Forming a Hong Kong company through our special service allows you to obtain an account in Hong Kong with one of the largest financial institutions in the world without the usual requirement of reference letters of any type.
  • A Hong Kong company is an essential element of doing almost any type of business in Mainland China.
  • Hong Kong is a PayPal-approved jurisdiction and one of very few no-tax jurisdictions where it is possible to have an unrestricted PayPal account. (The only other two jurisdictions where this is possible are Cyprus and Gibraltar).
  • World-class multi-currency banking is available with some of the largest international banks in the world.
  • Good banking secrecy. The company can be anonymous if you use our nominee director/shareholder services or set up a foundation to own all the shares in the company.
  • English is the main business and banking language.

Key Corporate Features [Chart]

Key Corporate Features [Chart] of a Hong Kong Offshore Company

Hong Kong Company Corporate Details
General

Type of Entity Limited by Shares
Type of Law English Common Law with local ordinances
Governed by Companies Ordinance (Cap 32)
Registered Office in Hong Kong Yes
Shelf company availability Yes
Our time to establish a new company 1 Day – Ready-made Company
6-7 Days – New tailor-made Company
Minimum government fees (excluding taxation) USD$295
Corporate Taxation No (16,5% tax for profits derived in HK, offshore transactions are not subject to tax)
Access to Double Taxation Treaties Yes
Share capital or equivalent

Standard currency HKD Hong Kong Dollar
(pegged to the USD1.0 =H KD 7.74)
Permitted currencies Any
Minimum paid up HKD 1
Usual authorized HKD 10,000
Bearer Shares allowed No
No par value shares allowed No
Directors

Minimum number One
Local required No
Publicly accessible records Yes (for anonymity Nominee Shareholders allowed)
Location of meetings Anywhere
Corporate directorship allowed Yes
Shareholders

Minimum number One
Publicly accessible records Yes (For anonymity Nominee shareholders allowed)
Corporate shareholder allowed Yes
Location of meetings Anywhere
Company Secretary

Required Yes
Local or qualified Yes (Local individual or corporate body)
Accounts

Requirements to prepare Yes
Audit requirements No (Only if a Company does business within HK)
Requirements to file accounts Yes
Publicly accessible accounts No
Recurring Government Costs

Minimum Annual Tax / License Fee  USD $1200
Annual Return Filing Fee USD $700
Other

Requirement to file annual return Yes
Migration of domicile permitted No

Requirements

Requirements for Incorporation of a Hong Kong Company

  1. A clear photocopy of passport of each director and shareholder of the proposed company. If shareholder/director is another corporation, please provide us its certificate of incorporation instead;
  2. A clear photocopy of the recent residential address with proof of each director and shareholder of the proposed company. If the shareholder/director is another corporation, please provide us any document showing its registered address instead;
  3. The authorized share capital and par value per share respectively. If not otherwise provided by the client, we will apply for our standard authorized share capital. That is HK$10,000 divided into 10,000 shares of HK$1 each;
  4. The issued and paid up share capital. If not otherwise provided by the client, we will apply for the minimum issued and paid up capital;
  5. The shareholding amongst each shareholder if there is more than one shareholder;
  6. The name and address of any third party of 18 years old or above who will witness the shareholders’ signatures in the Memorandum and Articles of Association (M&A). Please be advised that the third party witness is also needed to sign in the M&A;
  7. The business scope of the proposed company;
  8. Three proposed company names in order of priority. The proposed company name can be of English or Chinese only or both.

Taxation

Taxation of a Hong Kong Company

A Honk Kong based Offshore Company benefits from many tax breaks including:

  • No tax on capital gains
  • No tax on earned interest on income
  • No tax on dividend income
  • No withholding tax

If a Hong Kong company’s trading or business activities are based outside Hong Kong, no income taxation will be levied in Hong Kong. Hong Kong companies with Hong Kong-sourced income currently pay a rate of taxation on profits of 16.5%. Panama has a similar territorial taxation system.

Corporate Details

Corporate Details of a Hong Kong Company

Type of Company

Private company limited by shares

Restrictions on Trading

A HK based Offshore Company cannot undertake any business in the banking, insurance or financial sectors unless the relevant licenses are obtained

Powers of Company

A Hong Kong limited liability company has all the powers of a natural person

Language of Legislation and Corporate Documents

Both Chinese and English are used in business and either one of the two languages can be used.

Official Language

The official languages are English and Chinese, with English being used in the commercial and political sectors.

Registered Office

A company must maintain a registered office in Hong Kong

Shelf Companies Available

Yes, shelf companies are commonly used

Time to Incorporate

A new, tailor-made company can be formed in 6-7 working days; whereas a ready-made company can be completed within (1) one business day

Name Restrictions

A name that:

  • Is similar to or identical to an existing company
  • Is deemed contrary to the public interest
  • Implies government patronage

Names Requiring Consent or License

Building society, Chamber of Commerce, chartered, co-operative, mass transit, municipal, savings, tourist association, trust, trustee, underground railway, bank, insurance, assurance, reinsurance, department.

Disclosure of Beneficiary Ownership to Authorities

The particulars of the shareholder(s) are available to the general public. Using a nominee service or a foundation to hold the share(s) can preserve anonymity.

Compliance Authorized and Issued Share Capital

The standard authorized share capital is HKD10,000. The minimum issued capital is one share of HKD1 each.

Classes of Shares Permitted

Ordinary shares, preference shares, redeemable shares and shares with or without voting rights.

Bearer Shares

Company incorporated in Hong Kong is not allowed to issue bearer shares. However, utilizing nominee services, setting up an offshore IBC or foundation to hold the share(s) can achieve privacy.

Financial Statement Requirements

Hong Kong companies are required to prepare full audited accounts under the company laws. Also, a copy of the audited financial statements is to be furnished with Inland Revenue Department together with Profits Tax Return. The audited financial statements are not available to the public or to the foreign authorities except those of a listed company.

Director(s)

A minimum number of one (1) director is required and full details of these must be filed with the Companies Registry and are available for public inspection. The director(s) can be of any nationality and be resident anywhere. Corporate nominee directors are permitted.

Company Secretary

Every private Hong Kong limited company must appoint a company secretary, who may be an individual or a corporate entity, but the company secretary must reside in Hong Kong; if a corporate entity acts as company secretary, it must have a place of establishment in Hong Kong.

Shareholder(s)

A minimum number of (1) one shareholder is required whose details are filed on the Companies Registry and are available for public inspection. Corporate shareholders are permitted and anonymity can be achieved by the use of nominee shareholders or offshore IBC holding company or foundation. The shareholder(s) can be of any nationality and be resident anywhere in the world.

Exchange Control

None

Type of Law

English Common Law

Principal Corporate Legislation

Companies Ordinance (Cap 32)

Annual Maintenance Fees

Annual maintenance fee is estimated is at US $1,200, which covers annual filing fee, annual company secretary fee, annual business registration fee and annual registered office fee.

In addition to the above there is the statutory audit fee, which for most situations will be US$700. An exact quote can be provided if operations are extensive, complex or if there are local operations to consider.

Restrictions

Once a bank account is pre-approved, our client must physically be present to sign the documents at the bank in Hong Kong.

Double Taxation Avoidance Agreements

Hong Kong has Double Taxation Avoidance Agreements (DTC’s) with: Austria, Belgium, Brunei Darussalam, Canada, China, Czech Republic, France, Guernsey, Hungary, Indonesia, Ireland, Italy, Japan, Jersey, Kuwait, Liechtenstein, Luxembourg, Malaysia, Malta, Mexico, Netherlands, New Zealand, Portugal, Qatar, Spain, Switzerland, Thailand, United Kingdom, and Vietnam.

Hong Kong Private Limited Company Formation
Products from Sovereign


Basic Hong Kong Private Limited Company | USD $2,875

Includes:

  1. One original copy of Certificate of Incorporation
  2. One original copy of Business Registration Certificate
  3. Ten (10) copies of Memorandum and Articles of Association
  4. Ten (10) copies of share certificate
  5. Register of Members and Register of Directors
  6. One Common Seal and two rubber company chops
  7. Minutes for the appointment of first director(s)
  8. One filed copy of the Incorporation Form

Standard Hong Kong Corporate Package with Account

Package includes HK account for US$2,875 (+ $100 courier fee) with no bank reference letter. Physical presence is now required; Sovereign will facilitate bank account opening process. Only $700 needed for account opening minimum which for convenience can be included in your initial payment.

Anonymous Hong Kong Corporate Package with Account

Package includes everything as above plus nominee director and shareholder service for complete anonymity, all for US$3,675 (+ $100 courier fee).

“Bullet Proof” Anonymous Hong Kong Corporation combined with Panama Foundation package

As above, except instead of the nominee shareholder service a Panama foundation is set up with a separate optional Panama account available to act as sole shareholder giving you direct control of the company through the foundation. Company income can be “donated” into the foundation and the foundation used for a myriad of purposes. Includes brokerage account opening options, complete mail forwarding service, pre-paid debit card and credit card options. US$4975 (or US$5975 if professional third party account signatory management desired).

Optional Services for any package:

  1. Apostille of documents: US$500 additional (needed by some foreign banks for account opening purposes).
  2. Legalisation of documents: US$800 additional, needed only for use in China where attestation by authorized PRC government representative required.
  3. Hong Kong Mail Receiving/Forwarding Address: US$400 per annum

Annual Maintenance Fees

Annual maintenance fee is estimated is at US $1,200 which covers annual filing fee, annual company secretary fee, annual business registration fee and annual registered office fee.

In addition to the above there is the statutory audit fee which for most situations will be US$700. For most offshore business and investment use of a Hong Kong company this should be adequate. An exact quote can be provided if operations are extensive or complex or if there are local operations to consider, in which case there will be a profit and employer’s tax returns to also consider in addition.


Order a Hong Kong Private Limited Company from Sovereign (with or without a bank account) today. Click on the Let’s Get Started button below.

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