How to Form a Corporation in Hong Kong: 10 Steps Guide
When it comes to opening a business or starting a firm, Hong Kong is the best option. So, let’s say you’ve decided to launch your company.
You have looked into this, talked to people you trust, and have concluded that Hong Kong is the best place to establish your business.
For What Reason Should You Incorporate in Hong Kong?
Its authority, culture, and business climate are just a few of the many reasons to setup a company in Hong Kong, in addition to its seemingly endless array of attractions and breathtaking scenery.
1. It’s easy and inexpensive to put up.
In Hong Kong, the freest market in the world, it only takes 48 hours to establish your business.
There is no requirement for a native governor, no limits on international investment, and no minimal authorized capital in Hong Kong, unlike in many other nations.
2. Hong Kong also has a thriving commercial scene.
Hong Kong’s business vigor rates third on the World Economic Forum’s Competence Index this year.
Thus, many Asian business leaders see Hong Kong as a portal.
Hong Kong is home to 340,000 SMBs and is a regional center for new businesses.
The government of Hong Kong plans to spend HKD100 billion on technology and invention in 2020.
3. Reasonable tax rates encourage investment.
The corporate tax rate is only 16.5%, and the first HKD 20,000 in taxable income is not counted at all.
4. There is no value-added tax or duty on financial profits.
Also, a business is only required to spend a maximum of HKD 1,500 per person per month in social costs.
10 Steps to Opening a Company in Hong Kong
1. Learn About Area Groups and Agencies
There are three key people you’ll be communicating with throughout the process of incorporating a business and beyond:
- You have been contacted by the corporate assistant
- Company Registration Office
- Ministry of Taxation and Customs Administration
The IRD will assess your company’s yearly tax liability after you submit your annual tax report.
2. Pick a moniker for your business.
Company naming comes first. Both English and native Chinese are acceptable.
3. Determine Your Business’s Form of Entity
After choosing a name, decide on a firm framework. This is a crucial stage that will have far-reaching effects on your company and tax return.
Companies in Hong Kong typically use one of three distinct fleet types:
- Limited company
- Sole proprietorship
4. Appoint a Company Secretary
This is necessary because the Hong Kong government needs to know who to call with business concerns. The papers of formation will list your company clerk.
5. Type in the Company’s Listed Office Location
Government correspondence should go to your company’s registry address. Getting them is crucial. It’s standard to put the company clerk’s address as the business center.
6. Draft Articles of Organization
When forming a business in Hong Kong, you won’t need to prepare a mountain of paperwork like you would in many other places.
7. Register with the Company Registration
The Companies Registry delivers these documents digitally and physically. To repeat, a company’s document of establishment is issued once and lasts for its lifetime. The registration paper lasts a year.
8. Give Over the Tax Money
There is a government charge that must be paid at the moment the articles of formation are filed with the Companies Register.
The government of Hong Kong has chosen to forego revenue in 2020 and 2021 as a response to the coronavirus-caused decline in the region’s economy.
9. Acquire All Necessary Licenses and Permissions (if necessary)
Opening a company in Hong Kong usually doesn’t require special permits. Hong Kong has one of the world’s most free markets, so anyone can start a firm there.
10. File your taxes and reports on time.
The Companies Register will notify the IRS of your new company’s presence at the moment of formation.
Therefore, there is no need for you to take any measures in this regard.
An organization’s secretary is the go-to person for receiving and relaying important information like tax notices and filing deadlines.
Based on how helpful your business assistant is, you may want to jot these things down somewhere or at least keep them in your memory.