Hong Kong has come to be recognized as a leader in investment and financial systems. In the latest Global Competitiveness economy review of 2017, it was ranked position one ahead of the United States, Singapore, Switzerland, Dubai, and other top jurisdictions.
Hong Kong offers diverse benefits to investors who want to invest there. These benefits include;
- No foreign investment restrictions
- Straightforward tax regime
- Government support
- Stable political system
- Stable financial system
- Tax incentives
To enjoy these advantages, here is a guide that will help you to understand Hong Kong more.
The types of businesses you can form in Hong Kong
Investors coming to Hong Kong are required to register limited liability by shares. The process involves providing the required documentation to the company registry and waiting between 4-14 days. The main types of companies include;
- Company limited by shares: These are private and listed companies in Hong Kong. This type of company comes with unique advantages such as limited liability for shareholders, ease of share transfer, and continuity.
- The branch office: A company incorporated outside Hong Kong and that wishes to enter and start operating can register a branch office. The branch office must follow the company’s ordinance and have a representative to take charge of all operations. The branch office must also be registered with the Business Registration Office.
- Unlimited Company: This is a company that is registered without share capital. The formation means that the liability of the company extends beyond the shares held by the shareholders.
How to incorporate a company in Hong Kong
The Hong Kong Company law indicates that any person, Hong Kong citizen, Hong Kong resident or nonresident can register a company. The registration can be done by either visiting the Company’s registry office or using the e-registry portal. To incorporate a company, the following steps must be followed;
- Carry company name search
- Prepare the company article of association
- Complete the form of incorporation and notice to Business Registration Office
- Get a company secretary and the Hong Kong office address
- Make copies of passports of shareholders and directors
- Submit all the documents to the company registry and pay the required fees
Opening a corporate bank account
The company’s certificate of incorporation will be issued within 14 days of successful application. The certificate of incorporation will be required when opening a bank account. Note that many banks are requiring more information in line with OECD’s recent IRS framework for helping to curb tax evasion. The details that will be required include;
- Certificate of incorporation
- Your business structure
- The target clients
- If the business has been in business, the bank might require copies of previous contracts.
Just like registering a company, Hong Kong also places a lot of weight to dissolution. The process of dissolution according to the law targets ensuring that all the company obligations are met before winding up. To dissolve a company, you need the following;
- Agreement by all the members of the company
- The company must not have been in operations for at least 3 months
- Have no outstanding liabilities
- Not party to any ongoing legal suit
- Must have obtained a written Notice of No Objection from the Commission of Inland Revenue