Company incorporation in Hong Kong

Hong Kong is one of the world’s leading business hubs, known for its low taxation, ease of doing business, and strategic location in Asia. It serves as a gateway to China and the rest of Asia, making it an attractive destination for foreign companies looking to expand in the region.

Most Common Business Forms for Foreign Companies

The most common structure for foreign businesses in Hong Kong is the Private Limited Company (Ltd), which offers limited liability protection to shareholders.

• The company must have at least one director and one shareholder, who can both be foreign nationals.
• The shareholder’s liability is limited to the unpaid amount of their shares, ensuring personal assets are protected from business debts.
• There is no minimum capital requirement, but companies often choose to start with a capital of HKD 1 or more.
• Hong Kong allows 100% foreign ownership of the business, making it an attractive option for international entrepreneurs.

Another option is the Branch Office, where a foreign parent company sets up a local presence in Hong Kong. This structure is suitable for businesses that want to maintain direct control from their overseas headquarters, but it does not offer the same liability protection as a limited company.

Setting Up a Company in Hong Kong

Setting up a Private Limited Company in Hong Kong involves several steps:

1. Choosing a company name and ensuring it is unique and compliant with local regulations.
2. Appointing at least one director and one shareholder. Directors do not need to be residents of Hong Kong, but the company must have a registered office address in the region.
3. Filing the Articles of Association and other incorporation documents with the Hong Kong Companies Registry.
4. Obtaining a Business Registration Certificate from the Hong Kong Inland Revenue Department (IRD).
5. Opening a corporate bank account in Hong Kong to manage company finances.

Foreign nationals can serve as directors and shareholders in a Hong Kong company, with no restrictions on the number of foreign shareholders. The process is straightforward and can often be completed within a few days.

Taxation and Withholding Taxes

Hong Kong has a simple and attractive tax regime, with a corporate tax rate of 16.5% on profits. The system is territorial, meaning only income derived from Hong Kong is subject to tax. This makes it an attractive destination for foreign businesses.

Regarding dividends:

• Dividends paid to foreign shareholders are not subject to withholding tax in Hong Kong, making it an advantageous location for repatriating profits.
• Hong Kong also has numerous double taxation treaties with other countries, which can help further reduce tax liabilities for foreign investors.

Service Providers for Company Incorporation

• Simple Hong Kong
• HK Company Formation
• Rapid Formation
• PwC Hong Kong
• Jade Company Formation

These service providers assist with company registration, compliance, and accounting services to ensure foreign businesses are set up efficiently and in full compliance with Hong Kong’s regulations.