Why Choose Hong Kong?
Hong Kong offers business opportunities to foreign investors, while you can keep complete ownership of the company. Major advantages of setting up and maintaining a Hong Kong company include:
- It is easy to obtain international credit and reputation by taking advantage of the popularity of Hong Kong;
- No foreign exchange control and free capital flow. Various foreign currencies can be exchanged and transferred at any time, and the letter of credit business is widely applied. (You can read more about the foreign exchange control on the Chinese mainland in our blog.).
- Unrestricted business scope and simple follow-up services;
- Simple taxation system and low tax rate (only profits tax is involved). The tax rate for the first HK$2 million profit is only 8.25%, while a rate of 16.5% for the excess section is applied.
- Profits tax declaration is required annually;
- Low income tax charged at a maximum of 15%;
- It is possible to apply for an offshore exemption for profits sourced outside Hong Kong;
What are the differences between a company in Hong Kong and the Chinese Mainland?
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Registration Elements |
Hong Kong Company |
The Chinese Mainland Company |
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Company Name |
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Share Capital and Register Capital |
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Operation Scope |
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Operation Address |
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| Foreign Exchange Control |
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Taxation |
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Tax Declaration |
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Annual Auditing |
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Types of business entities in Hong Kong
1. Limited Liability Company
The most common form of legal entity in Hong Kong offering protection of personal assets from business risks comes in two forms: private limited company and public limited company. The majority of small to medium-sized companies are established as private companies limited by shares. On the other hand, public limited companies by shares are incorporated when the number of shareholders is over 50.
2. Partnership
The company is co-owned and built by two or more investors who get together with a plan of sharing profits and risks, governed by the Partnership Ordinance of Hong Kong.
3. Foreign Company Office
The business presence of a foreign/overseas company in Hong Kong. It can be a branch office, a subsidiary, or a representative office in Hong Kong. It does not have legal capacity and can only be used for a limited scope of business, including promotional activities or market research.
How Hongda Guides the Incorporation
There are some general requirements for Hong Kong company incorporation:
- At least one shareholder and director aged over 18 years old to establish a company.
- Hire a company secretary who can be either a Hong Kong permanent resident or a Hong Kong company (provided by Hongda).
- Once registered company house/office address in Hong Kong (provided by Hongda).
- Information about the company name and the registered capital.
To prepare for setting up a Hong Kong company, you should also gather the following documents and materials. Hongda can support document preparation, review the required information, and coordinate the process where applicable. Official acceptance, approval, and certificate issuance remain under the relevant Hong Kong authorities, and you usually do not need to travel to Hong Kong for the preparation and coordination process.
Documents required for Hong Kong company registration:
- Incorporation Form (Form NNC1): This form contains information about the company's proposed name, registered office address, business activities, share capital, and details of the directors, shareholders, and company secretary.
- Articles of Association: This document outlines the internal rules and regulations of the company, including the rights and responsibilities of shareholders, directors, and officers.
- Identification documents: copies of identification documents, such as passports or identity cards, for all directors, shareholders, and the company secretary. Non-resident directors or shareholders may need to provide additional documents, such as proof of residential address.
- Consent to Act as Director/Secretary (Form NNC3/NNO2): These forms are required to confirm the consent of the directors and the company secretary to act in their respective roles.
- Registered Office Address Proof: documents proving the company's registered office address in Hong Kong, such as a copy of the tenancy agreement or a utility bill showing the address.
- Share Certificate: A share certificate is issued to each shareholder, indicating their ownership of shares in the company.
The Period and Method of Registering Hong Kong Company:
- Typical timeline depends on document readiness, due diligence, the official filing channel, and the review process of the relevant authority.
- Electronic filing may be faster when documents are complete, while other cases may take longer depending on the structure, due diligence result, and official processing.
