Generally, Hong Kong companies are being used because of following advantages:
With British legal system as background which is well adopted, Hong Kong has very stable social and political environment. English and Chinese as bilingual legal language.
Being international center of information exchange and transportation hub. Close to and with excellent relationship with Mainland China
Wide freedom on choosing the company name
No restriction on the business scope except special business which requires special certification
With very low tax rate. Tax exempt for income not incurred in Hong Kong (offshore income)
No restriction on the capital and do not need capital verification
With very active and freedom in manpower, logistic, fund transferring and financial activities. No restriction in fund transfer to and from most part of the world. No custom duty on the import-export goods, etc.
Easy to get the residence certification. The client can apply for the multi-entry into Hong Kong when your company pay tax
2) Set-up requirements
Minimum 1 shareholder.
Directors & shareholders can be same person. No nationality restriction for shareholders and directors.
Corporate shareholder and director is allowed.
Minimum subscribed share capital is HK$1.
Registered address in Hong Kong.
One Company Secretary and should either be Hong Kong resident or Hong Kong limited company.
Company name should not be same as those already in company register and can be English only, Chinese only or English plus Chinese
Company should have complete account book for the annual tax filing
Company should do the annual return and business license renewal.
3) Set-up procedure and time required
Tailor made company
Ready made company
4) Annual maintenance fee
Company secretary as request
Company registered address as request
Service fee for carrying out the duty of nominee directorship or shareholder
Business Registration renewal
Company registry annual filing
Accounting & audit as request
5) Our service
Assisting client for set-up company and related issue
Offering the registered address
Assisting in opening company bank account
Providing shareholder or director for the registration purpose
Offering the company secretary, accounting and auditing service
Providing advisory service on tax issue and other issue
6) The comparison with BVI company
Generally, Hong Kong Company is more suitable for doing business while BVI Company is more suitable for asset holding. However as situation of client varies case-by-case, professional advice should be sought before making decision. Below comparison is highlight of certain areas and help client to consider using which type of company.
6.1) Setup requirement
BVI company is more simple in setup requirement.
Hong Kong Company
Minimum No. of shareholder 1
Minimum No. of director 1
Minimum issued share capital· HK$1
- 1 and should be Hong Kong resident
- Not required
Nationality and address of shareholder and director
- No restriction
Hong Kong registered address
- Not required - Keeping of Hong Kong corresponding address is useful for corresponding with registration agent.
- Time required to incorporate
· Ready-made: 1 day
· Tailor-made: 7 working days
· Ready-made: 1 day
Tailor-made: 12 working days
6.2) Purpose and Benefit
Recommendation: BVI company is more simple in setup requirement.
Hong Kong Company
· Less good
Resistance of customer and client
· Less resistance as registration is open for public search
· Higher resistance as registration is not open for public search
· Profits Tax rate 17.5% but exempt for profit not deriving from Hong Kong
· Profits Tax rate Zero but limited to profit not derived from BVI.
· Company may still subject to tax of another country
· Asset transfer can be achieved by share transfer
· Has to pay stamp duty for share transfer
· Updated financial statement is required for share transfer.
· Asset transfer can be achieved by share transfer.
· No stamp duty and no financial statement is required for share transfer.
Bank account opening
· Easier and less requirement even for non-Hong Kong resident
More requirement and always request for
· Personal banker's reference letter of directors.
· Disclosure of beneficiary owner.
· Purpose of opening bank account.
6.3) Cost in formation, maintenance and cancellation
Recommendation: BVI company is more suitable for holding of asset. Hong Kong company is more suitable for doing business.
Hong Kong Company
Cost of formation
· From HK$6,300
· From HK$7,800 (US$1,000)
· Business Registration HK$2,600
· Annual filing HK$105
· Accounting, tax filing and auditing required. Service fee starts from HK$4,000 per year
· Total annual fee starts from around HK$7,000.
· License renewal US$700, or HK$5.500
· No accounting, tax filing and auditing required
· No debt company can be de-registered at around HK$2,000
· Debt bearing company has to be winding up at around HK$20,000
· Just not to pay license renewal
7) The comparison with unlimited company
7.1) Advantage & use of unlimited company
Unlimited company is very suitable for business start up because of
- its simplicity in application;
- its low maintenance cost; and
- able to have bank account in company name.
All nationalities is eligible to open an unlimited company in Hong Kong. For business start up case, most unlimited company meets the requirement of business registration fee exemption. In this case, the possible cost of maintaining such an unlimited company can be very low:
Business registration - start up and annual renewal - HK$2,600 or zero (exempted).
Service fee for business registration:
BR application - HK$800 for HK resident, or HK$1,200 for non-HK resident
BR fee exemption - HK$1,000
Accounting & tax filing per year - maybe as low as HK$2,000 because no audit is required. The actual charge depends on income, volume of transaction and business nature of the company.
For tax purpose, the loss can be carried forward to setoff future year's profit.
For business purpose, an unlimited company can carry out all business just same as a limited company.
7.2) Set-up requirement
For Hong Kong resident, require Hong Kong ID card photo copy of proprietor and all partners.
For non-Hong Kong resident, require: photocopy of proprietor or all partners' passport
7.3) Exemption from Business registration certification fee
Unlimited company fulfilling criteria as belwo may exempt from
Every person can claim one exemption only for each year.
If a person is owner of 2 unlimited companies, he cannot claim exemption for any one of them. Only applicable to sole proprietor unlimited company.
Both Hong Kong resident and non-Hong Kong resident are eligible.
- For service business - average monthly receipt is < HK$10,000
- For other business - average monthly receipt is < HK$30,000
For new business registration, you have to pay for the registration fee and wait for refund. As it is a new business, applicant need to prove that the income of the new business will fulfill the income requirement.
For business registration renewal, you can exempt from payment if application is lodged properly. Last year Income record of the business is required to prove fulfillment of requirement.
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