In this blog, Hongda will introduce the most concerned questions about running a business in Hong Kong, from company registration to bank account opening. You will surely find this article useful when looking to register your own company here!
Here comes the third post of Hongda's 'Frequently Asked Questions and Answers' blog series: common questions and answers about doing business in Hong Kong. In this blog, we will introduce detailed explanations and answers to some of the most pressing issues you may be interested in, including company registration, bank account opening, and more! Each issue is thoroughly addressed to help you with your operations and company management in Hong Kong.
Additionally, in our previous blog installments, we covered the topics of doing business in China, as well as the working visa application in China. Please click the links to read more should you be interested.
This blog will cover the questions you mau have regarding doing business in Hong Kong, categorized into 6 sections. You can simpliy click the title below for each section:
- Section 1: Hong Kong company registration
- Section 2: Naming your Hong Kong company
- Section 3: Director, shareholders, and company secretary of a Hong Kong company
- Section 4: Registered captial of a Hong Kong company
- Section 5: Opening a Hong Kong corporate bank account
- Section 6: Hong Kong company deregistration
Section 1: Hong Kong Company Registration
Question 1 : What are the requirements for registering a limited company in Hong Kong? What are the requirements to register a limited company in Hong Kong?
To register a limited company in Hong Kong, you must have one director and at least one shareholder. The director can be a Chinese resident with a valid ID card, a Hong Kong citizen, or a foreign national holding a passport. Shareholders can be either individuals or companies.
Question 2: How long does it usually take to register a Hong Kong Company?
The processing time to register your Hong Kong company depends on the identity of the shareholders. The registration can be completed in just 1 working day if the shareholder is an individual. However, if the shareholders are companies, the full set of documents with the company stamps and signatures needs to be prepared, which may take about 7 working days to register your Hong Kong company.
Question 3: What is the business scope of a Hong Kong company? What should I determined it?
The regulation regarding the business scope of a Hong Kong company is not as strict as that of a Chinese mainland company. You can write a business scope in English with up to 60 characters or a Chinese one within 30 characters (including punctuation and spaces) for your Hong Kong company. If you haven’t determined the business scope for your newly registered company, you can simply put ‘corp’ (meaning corporate entity) in your business scope, which indicates that your company is ‘not yet open for business’. All Hong Kong companies that are open for business must include the business nature or business scope, such as trading or services, on their Certificate of Incorporation, according to the updated regulations of the Hong Kong Inland Revenue Department.
Question 4: How can I verify whether a company is a lawfully registered entity in Hong Kong?
You can visit the website of the Companies Registry (CR) to check and verify the Certificate of Incorporation information of a Hong Kong company. Please note, the record may only be available for verification 16 working days after a company is registered.
Section 2: Naming Your Hong Kong Company
Question 1 : Are there any restrictions in naming a Hong Kong company?
You need to think of a unique company name as your business mark, which cannot be very similar to an existing name. As mentioned above, an English name is mandatory, and a mixture of English and Chinese is not acceptable. Additionally, some sensitive and restricted words, such as ‘royal’, ‘government’, and ‘bank’, cannot be used unless approved and authorized by the related government departments.
Question 2 : Is it possible to register a company whit its name in only Chinese or English?
An English name is compulsory when registering a Hong Kong company, and you may choose to include a Chinese name at the same time. However, a company name that mixes both English and Chinese is not acceptable.
Question 3 : Can I change the name of a registered company?
Yes, you can. The previous company name will still appear on the updated Certificate of Incorporation, indicating that the new name is now effective and replaces the previous one.
Section 3: Director, Shareholders, and Company Secretary of a Hong Kong Company
Question 1 : Can the Shareholder and Director be the same person?
Yes. A director and at least one shareholder are needed to register a Hong Kong company, and they can be the same person. In this case, this person will gain the complete control over this company.
Question 2 : Can a limited company act as the shareholder or director of another limited company?
A limited company can act as the shareholder of another limited company. You will need to provide a copy of the company incorporation certificate during the registration process. This will take longer than the cases where an individual acts as the shareholder as more documents need to be prepared. However, a limited company CANNOT be the director of a Hong Kong company, as the director can ONLY be an individual.
Question 3 : What is the company secretary of my Hong Kong company? What does a company secretary do?
The company secretary we are talking about is not what people typically assume a secretary or assistant does, such as picking up phone calls or making meeting arrangements. The company secretary of a Hong Kong company acts as a representative of your company, ensuring that operation and decision-making comply with Hong Kong government regulations. The general duties of a Hong Kong company secretary include company registration, daily operation management, government communication, and ensuring company compliance.
Question 4 : Who may act as a company secretary?
This role of a Hong Kong company secretary must be fulfilled by a Hong Kong citizen aging over 18 years old, or a limited company registered and operating in Hong Kong.
Section 4: Registered Capital of a Hong Kong Company
Question 1 : What does the registered capital represent?
Registered capital is the total amount of capital that all shareholders contribute to a company when it is registered. This acts as the financial foundation to support the company conduct its business activities. It also represents the shareholders’ maximum liability to this company.
Question 2 : Is there a minimum amount of registered capital required by law? Will increasing the amount of registered capital incur additional government fees?
Nowadays, there is no minimum amount of registered capital required by laws and regulations. A symbolic amount of registered capital, such as HKD 10,000, is usually chosen. Please note, the registered capital will be displayed on the company’s Certificate of Incorporation and may impact your public reputation, so you should carefully decide it according to your situation. Increasing registered capital will incur government fees including capital duty, submission fee for Form NSC1, and stamp duty if applicable.
Section 5: Opening a Hong Kong Corporate Bank Account
Question 1 : What documents are needed in opening a Hong Kong bank account?
The following documents will be needed:
- Company registration documents: Certificate of Incorporation, Business Registration Certificate, Articles of Association, etc.;
- ID documents of director and shareholders: ID card, passport, etc.;
- Proof of address of director and shareholders: bank statement, utility bills, etc.;
- Notice of appointment of director and secretary (copy certified by accountant);
You may be asked to provide additional documents if required by the bank.
Question 2 : Are there any limitations for cash withdrawal, remittance, and foreign currency exchange from a Hong Kong bank?
There is no foreign currency control in Hong Kong, meaning that the capital may flow freely. Normal business-related remittances and transfers are unrestricted. However, if you need to withdraw a great amount of cash, you will be asked to state the purpose of this withdrawal and provide proving evidence. Additionally, Hong Kong has implemented strict regulations against international money laundering. If you engage in abnormal business transactions with companies in certain sensitive countries or business entities who are sanctioned, and are not able to prove the legitimacy of those transactions, your bank account may be closed.
Question 3 : How long does the process of opening a Hong Kong bank account usually take? What if I am in an urgent need of a bank account for business payments?
Opening a Hong Kong bank account may take about 4 – 6 weeks due to the complex due diligence requirements and offline appointment scheduling. Considering that a bank account is the prerequisite for the daily operation of your Hong Kong company, you can book a free consultation with Hongda for alternative payment settlement solution if an account is urgently needed.
Section 6: Hong Kong Company Deregistration
Question 1 : Can I deregister my Hong Kong company?
Yes, you can. However, there are some requirements to be met before you can deregister your Hong Kong company:
- All shareholders have given mutual consent for deregistration.
- The company has ceased operations or has not conducted any business for more than 3 months beforehand
- The company has no unpaid debts, including government fees or taxes.
- A Notice of No Objection has been issued by the Commissioner of Inland Revenue.
Question 2 : How long does it usually take to deregister a Hong Kong company?
The deregistration of a Hong Kong company involves several stages, including shareholder confirmation, applying for the Notice of No Objection, submitting the deregistration application, and obtaining final approval. The whole process may take about 5 to 7 months.
Question 1 : What documents are required to deregister a Hong Kong company?
To successfully deregister your Hong Kong company, the following documents will be needed:Deregistration
- application form (Form NDR1);
- Certificate of Incorporation;
- Business Registration Certificate;
- Latest Annual Return;
- Latest financial statements.
Conclusion
We hope that this article will be helpful to you, whether you are considering opening a company in Hong Kong, or are already running your business here. Hongda will launch more related services to assist you in managing your company in the Chinese mainland and Hong Kong, providing comprehensive solutions to your aministrative, financial, HR, taxation, or other needs you may have.
If you want to learn more about how Hongda can help you with your company management, please click the buttom below to make a free meeting with us!
