Hong Kong is a former British colony, now officially the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR). The city was transferred to Chinese authorities in 1997, following the end of the 99-year lease agreement between the British Empire and China.
Hong Kong has proven itself to be a highly successful city. Today it is one of the most buoyant financial centres and trading ports in the world. Its currency, the Hong Kong dollar, is among the most traded currencies in the world.
Although Hong Kong is now part of China, the territory is governed according to the “one country, two systems” principle. Under this principle, the laws of mainland China do not apply to the territory of Hong Kong. Instead, Hong Kong retains its own legal system based on English common law.
Company formation services in Hong Kong are wide-ranging. The city is a premier financial centre with a strong focus on one of the world’s leading economies – China. Trusts are recognised under Hong Kong law and are especially popular in this jurisdiction. In addition, some of the world’s largest banks operate in the city. Among them are HSBC, Standard Chartered and DBS that serve the large Hong Kong economy.
Taxation in Hong Kong is based on a territorial tax system. This means that taxation in Hong Kong only applies to income derived within the territory. Therefore, the tax resident status of an individual is generally irrelevant in determining their tax liability in Hong Kong.
Consequently, both residents and non-residents are taxed in the same manner on profits earned in the territory of Hong Kong. Moreover, Hong Kong does not levy an income tax on all types of income from its territory, but rather a set of special taxes that apply only to certain types of income. That is where offshore company registration in Hong Kong can provide significant tax benefits to a business.
Dividends distributed by a Hong Kong entity are not subject to tax in the territory. The same applies to interest paid from a Hong Kong entity.
There is no capital gains tax or value-added tax (VAT) in Hong Kong.
All this provides ample opportunities to optimise international tax burdens by Hong Kong company formation.
The official currency is the Hong Kong dollar (HK$), which is extremely stable. All other major currencies are also widely used in Hong Kong.
There are no currency exchange controls in Hong Kong.
|Currency||Hong Kong Dollar (HK$)|
|Capital gains tax||0%|
Following the principle of “one country, two systems”, Hong Kong’s legislation differs from that of mainland China. It is based on common law and equity principles, which are supported by statutory law. For this reason, company set up in Hong Kong is considerably more appealing than in mainland China.
Hong Kong is authorised to exercise its own independent judicial power. The highest court in the territory is the Court of Final Appeal of Hong Kong.
Since the legislation is based on common law, trusts are recognised in Hong Kong and can be established with a local trust company. Indeed, trusts are quite popular in this jurisdiction. Although there are no specific provisions in Hong Kong law to protect trust assets, this is a jurisdiction of choice for many who wish to establish their own trust.
The Hong Kong Companies Registry is the principal authority responsible for keeping a register of companies and ensuring that Hong Kong company incorporation is processed in accordance with the Companies Ordinance.
Company law regulating Hong Kong incorporation allows for various types of entities, such as limited and unlimited companies, as well as general and limited partnerships. The vast majority of offshore companies in Hong Kong are companies limited by shares.
The following legislation regulates company formation in Hong Kong:
Hong Kong is one of the oldest and leading financial centres in the world. Its unique position makes it a primary gateway to mainland China and other Asian countries.
Offshore company registration in Hong Kong opens up considerable opportunities to operate in Asia and globally within its low tax environment. The territory has a longstanding reputation as a world-leading business hub. Therefore, Hong Kong companies are recognised by business partners, banks and other institutions for the jurisdiction’s excellent reputation as a renowned financial centre.
The territorial tax system allows for effective optimisation of taxation to 0% for profits not derived from the territory of Hong Kong. No VAT or other indirect taxes are applicable.
Effective company registration and sophisticated financial infrastructure make Hong Kong company formation processes quick and easy. In addition, there are many certified accountants, lawyers and trust professionals residing in Hong Kong, all of whom are ready to serve the needs of your business. Astra Trust can help you incorporate a Hong Kong company cost-effectively and quickly.
Hong Kong company formation with a bank account at a local bank is also possible. There are numerous reliable and highly prestigious banks operating within the territory. It is possible to incorporate a company and open a bank account without a personal visit to Hong Kong. Astra Trust can assist with Hong Kong company formation with a bank account at a local or foreign bank. Other services such as a local director and nominee shareholders are also available.
According to the current legislation, it is possible to set up the following types of offshore companies in Hong Kong:
By setting up a company in Hong Kong, you can create a reputable tax-effective structure that will bring value to your business.
Company formation in HK is the best option for the following business activities:
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For Hong Kong offshore company formation, the following CDD documents are required:
Hong Kong company formation fees include the following services:
After company set up in Hong Kong, you will receive the following Hong Kong company documents:
Other documents depend on the services ordered.
According to the Hong Kong Companies Ordinance (Chapter 622), 2014, the name of a Hong Kong company shall not be registered:
The proposed company name shall not be identical or similar to the name under which another company is registered in Hong Kong.
The company name can be expressed in English and Chinese.
The name shall be stated in the Memorandum and Articles of Association of the Hong Kong company upon incorporation.
An online application system in the Hong Kong company register allows for quick and efficient operations. In addition, all name checks and reservations are free of charge.
Every private company is required to have at least one natural person to act as a director who is over the age of 18 and who cannot be bankrupt or have been convicted. The minimum number of directors of a Hong Kong international business company is one. Directors can be individuals or legal persons of any nationality and residency.
The board of directors meetings can take place anywhere in the world.
Shareholders of a Hong Kong limited company can be individuals over 18 years old or legal entities of any nationality and residency. The minimum number of shareholders is one, and the maximum number is fifty.
Each Hong Kong company shall appoint a local corporate secretary who is a resident of Hong Kong. The company secretary is responsible for maintaining the corporate books and accounting records of the company and must ensure it complies with the necessary statutory requirements.
A company must appoint at least one designated representative who will be responsible for filing and maintaining the company’s Significant Controllers Register and who will answer to a law enforcement officer.
When setting up your Hong Kong company, it is possible to appoint a nominee director and a shareholder. Astra Trust can assist you in all matters relating to Hong Kong company incorporation, appointment of nominees and opening of bank accounts.
The share capital of a Hong Kong limited company can be of any value and currency as stated in the Memorandum and Articles of Association.
The standard authorised share capital is usually USD 50,000 with a par value of USD 1 each. The issued share capital can be anything from one share of any par value, or 50,000 shares of par value of USD 1 each.
The authorised share capital can be both par value and no par value.
A Hong Kong company may issue different classes of shares as stated in its Memorandum of Association.
Bearer shares are prohibited from being issued in Hong Kong.
The registers of directors, shareholders and Significant Controllers Register shall be stored at the registered office by the secretary of the Hong Kong company.
The register of directors and secretaries are to be submitted to the registrar upon incorporation of the Hong Kong company. The return of shares allotment shall be submitted to the registrar disclosing the identity of the shareholders.
The Significant Controllers Register must be kept at the registered office at all times and be available for inspection by the Hong Kong authorities. It does not have to be submitted to the registrar and is not available to the public. Only the bodies listed below are entitled to inspect the SCR of a Hong Kong company:
The privacy of a Hong Kong limited company can be further enhanced by using the services of a director and a nominee shareholder. Beneficial ownership can be structured through trusts or foundations.
If you would like to know more about company setup in Hong Kong, please contact the Astra Trust team to receive more detailed information free of charge.
At present, there are no economic substance requirements in place in Hong Kong.
Every company in Hong Kong is required to file a corporate annual return with the Companies Registry containing details of share capital, charges, directors, secretary and members of the company.
In addition, all Hong Kong companies are obliged to submit a profits tax return and audited accounts to the Inland Revenue Department on an annual basis. The first financial year-end can be fixed at any date within 18 months of the date of incorporation of the company, and the same financial year-end date must be followed in subsequent years.
The auditors shall be independent of the company and qualified in accordance with the Hong Kong Professional Accountants Ordinance.
Business Activity Restrictions
Requirements for Directors
Requirements for Secretaries
Requirements for Shareholders