Are you going to register a new company in Hong Kong, BVI or Cayman Islands? No matter you are starting a new business or acquiring an existing entity, there are always statutory registration procedures as required by local registrars. In Hong Kong, it is Hong Kong Companies Registry .
Registering a Company/Entity in Hong Kong
Common forms of setup in Hong Kong include but not limited to
The most common type of company in Hong Kong is private company limited by shares. As the name suggested, financial liability of shareholders is limited to their committed shares.
| Subject | Basic requirements |
| Shareholder |
At least one and maximum 50 (can be individual or body corporate of any nationality, nominee shareholder is possible) (Company with more than 50 shareholders will be in the form of a public company) |
| Director |
At least one (at least one natural person of age 18 or above as director. He/she must not be bankrupt or convicted of any malpractices. ) |
| Company secretary |
Mandatory (can be individual who ordinarily reside in HK or body corporate with registered office or place of business in HK. If engage a service provider, it must be a Company Service Provider licensee) |
| Auditors |
Mandatory (must be practicing member of HKICPA) |
| Tax representative | Optional |
|
Designated representative (to provide assistance relating to the company’s significant controllers register (“SCR”) to a law enforcement officer) |
Mandatory [can be a natural person resident in HK who is director, employee or member of the company, or accounting professional, legal professional, or Trust or Company Service Provider licensee as defined in the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615)] |
| Corporate details | Basic requirements |
| Registered office |
Must be a Hong Kong address (not necessarily to have physical office in HK but cannot be a PO box) |
| Share Capital |
Can be any amount in any major currencies besides HKD. But there must be at least one shareholder with one ordinary share issued at formation. |
Use of shelf companies becomes uncommon after the Companies Registry has launched e-incorporation in 2012 and this enables a tailor-made company to be established within the same day.
On no unforeseen complication basis, the Registry currently takes approximately 4 working days to consider and approve an application for registration via the traditional paper submission channel.
The Companies Ordinance requires upkeeping of statutory books and records (such as Minute Book and Register of directors and members) and the SCR within the Hong Kong territory. However, we have seen cases where clients reside outside Hong Kong are keeping these books and records at their own offices instead and/or these books and records are not kept in a proper / updated manner. This breach of the Companies Ordinance will expose the relevant companies to prosecution and punishment.
Other than filing of Annual Return (NAR1) with the Companies Registry and from corporate secretarial perspective, Hong Kong companies are also obliged to attend to the following basic compliance requirements:
- Convene Annual General Meeting (AGM)- financial statements, audited by a Hong Kong CPA, should be presented to members thereat at least once in every calendar year and not later than 15 months after the last annual general meeting for your business.
- Renew Business Registration Certificate (BRC) on an annual basis or once every three years.
- Report corporate changes to the Companies Registry in specified form within prescribed time period – depending on nature of changes, relevant resolutions approving the changes and ancillary documents should also be prepared.
This form of setup is typically used for non-profit / charitable organisations and clubs that require legal personality. Instead of investing capital, members guarantee to contribute a predetermined sum to the company to cover its liabilities in the event of its winding up.
Not all non-profit-making organisations are charities. Companies set up for certain charitable purposes are qualified for tax exemption upon application pursuant to Section 88 of the Inland Revenue Ordinance (Cap 112).
| Subject | Basic requirements |
| Member |
At least one (can be individual or body corporate of any nationality) |
| Director |
At least two (must be natural person) |
| Company secretary |
Mandatory (can be individual who ordinarily reside in HK or body corporate with registered office or place of business in HK. If engage a service provider, it must be a Company Service Provider licensee) |
| Auditors |
Mandatory (must be practicing member of HKICPA) |
| Tax representative | Optional |
| Registered office |
Must be a Hong Kong address (not necessarily to have physical office in HK but cannot be a PO box) |
On no unforeseen complication basis, the Companies Registry may take approximately 4 to 6 weeks to consider and approve an application for registration.
Oversea corporation being a body corporate can register itself as a non-Hong Kong company pursuant to Part 16 of the Companies Ordinance (Cap 622), within one month after it has established a place of business in Hong Kong.
Experience tells that quite some foreign corporations have already commenced having a place of business in Hong Kong without knowledge of the local registration requirements. The non-compliance may come to light only when these corporations approach local professionals for applying Certificate of Resident Status for the purposes of claiming tax benefits under the Comprehensive Double Taxation Arrangements / Agreements or on other matters. Once the Companies Registry is aware of this non-compliance, prosecution proceedings will be instigated. Maximum punishment is fines of up to HK$50,000 with a further daily fine of HK$1,000 for continued non-compliance. Ignorance of law is no excuse.
Late registration is therefore not advised but still possible when there is valid reason in support.
| Subject | Basic requirements |
| Company name | Same as the oversea company |
| Local shareholder / director | Not required |
| Local company secretary / auditors | Not required |
|
Authorised representative (to accept on behalf of the registered non-Hong Kong company service of any process or notice required to be served on the company) |
Mandatory (should be a natural person resident in HK, a firm of solicitors or certified public accountants) |
| Tax representative | Optional |
| Place of business |
Must be a Hong Kong address (not necessarily to have physical office in HK) |
On no unforeseen complication basis, the Companies Registry generally takes approximately 11 working days to consider and approve an application for registration.
Where an overseas corporation establishes an office not for the purpose of entering into business contracts nor conducting any trading and profit earning activities in Hong Kong, it may register as a representative office.
This is the simplest form of setup and the quickest time to obtain registration can be within one working day.
FAQ
The company must have a local company secretary and local registered office; and maintain its statutory books and records and significant controllers register (“SCR”) within the Hong Kong territory. A designated representative (“DR”) should also be appointed to provide assistance relating to the SCR to a law enforcement officer.
The DR must be either a shareholder, director or an employee of the Hong Kong company who is a natural person resident in Hong Kong or, alternatively, an accounting professional, a legal professional or a person licensed to carry on a business as trust or company service provider (TCSP).
For minor offences including late delivery of specified forms and annual returns, the company will be subjected to a fine. Companies which fail to submit the annual returns before the designated time are liable to a fixed penalty of HKD $50,000, plus a HKD $1000 daily default fine.
If a company is convicted of serious offences, for example, provision of misleading and wrong particulars intentionally, the court have the right to impose fine as well as imprisonment on the directors.
Make use of our compliance checklist to perform a quick assessment.
Nominee Director and Nominee Shareholder
In Hong Kong, details of shareholders and directors of a limited company have to be made public. If the privacy of these identities are sensitive to you, you might consider appointing a nominee director and/or shareholder.
Your rights to company control, assets and distribution of income can be protected by entering into a nominee contract and having it stamped. A Power of Attorney (POA) and Declaration of Trust are typical documents used for nominee directors and nominee shareholders respectively.
Set up offshore company
Offshore companies are widely used for
- holding investment, property and other asset
- estate and succession planning, financing
- listing on international stock exchanges and
- acquisition transactions
When forming an offshore company, choosing your jurisdiction is a strategic decision that may cause adverse ramifications to your business. Therefore, it is crucial to choose the right jurisdiction for your business needs.
Due to simplicity, flexibility, stability, creditor friendliness and tax neutrality, BVI and Cayman companies have been frequently used in holding structures.
Global pressure to combat money laundering and curb tax evasion and fraud have pushed increasing regulations for offshore companies. It is therefore important in keeping abreast of these regulatory changes.
Bank Account Opening in Hong Kong
Owing to the more stringent Anti-Money Laundering and Counter-Terrorist Financing regulations, coupled with various sanctions regimes, bankers in Hong Kong have tightened up their Know-Your-Clients (KYC) processes where they will scrutinize in great details typically:
- the industry your business is in,
- the sources of wealth and income you might have and
- countries you will be dealing with
If you are involved in industries like art galleries, diamond trading or money lending which are considered as high risk of money laundering, or are dealing with sanctioned countries like North Korea, Iran and Russia, your chance of getting a corporate bank account will likely be slim.
Bankers are also very cautious about bank account opening requests from offshore companies.
Where we can assist you
Although the most common type of company is private company limited by shares, there are other company structures that fit your own situation best. We shall liaise closely with tax advisers (and other offshore agents where applicable), share our practical knowledge and eventually come up with an optimal corporate structure. Specifically, we advise you on the following if required:
- Subsidiary or Branch office or Representative office for Foreign/Overseas company
- Hong Kong company vs Offshore company
- Public vs Private company
- Company limited by shares vs guarantee
- General partnership vs Limited partnership
This choice affects how you conduct your business, the way you file taxes and what reporting standards you will be subjected to.
- Implementation of the optimal structure plan including but not limited to registration of companies in Hong Kong, China, Macau, Singapore and certain offshore jurisdictions (such as British Virgin Islands and Cayman Islands), or set up branch office and representative offices
- Registration of non-profit organizations in Hong Kong, and making application with the Hong Kong Inland Revenue Department for tax exempt status pursuant to Section 88 of the Hong Kong Inland Revenue Ordinance where applicable
- Registration of unlisted public limited company in Hong Kong
- Registration of limited partnerships in Hong Kong
- Advice on licensing requirements and regulatory approvals for carrying on a business in Hong Kong
- Assisting with trademark registration
- Assisting in setting up a physical office in Hong Kong and making necessary arrangement (this includes but not limited to arranging office renovation and monitoring progress, acquisition and arranging set-up of computer / communication systems and other office equipment, assisting companies and their employees in arranging insurance etc)
- Internet domain registration and corporate email address configuration.
- Arranging public searches (such as company / land searches) on your target company in Hong Kong, and furnishing a report on our findings
- Conducting due diligence / health check based on statutory books and records as provided for attention and the public records as maintained by the Companies Registry, assessing whether your target company has been properly registered, and furnishing a report on our findings
- Guidelines and checklists when acquiring new investments or being acquired
- Attending hand-over / completion meeting with or on behalf of seller or buyer
- Consultancy on formalities relating to the transfer of legal ownership of the acquired shares
- Bank account opening in Hong Kong or changing existing bank signing arrangement
- Outline local basic labour law requirements in Hong Kong and preparing a first draft of local employment contracts for consideration if required
- Advice and making applications for work (and dependent) visa or extension of stay
- Provision of general or tailor-made training sessions to newly appointed company secretaries and/or director(s) to facilitate their understanding of their statutory duties and the basic law requirements in Hong Kong that they should be aware of
- Advice on best practices and procedures; or review of existing procedures and suggesting improvements for better corporate governance
- Project co-ordination
- Annual statutory and regulatory compliance
- Provision of named company secretary and/or other nominee services
- Provision of authorised representative for non-Hong Kong companies
- Provision of registered office address (or place of business address for non-Hong Kong companies) in Hong Kong
- Creating a Significant Controller Register (“SCR ”) for a Hong Kong company, identifying significant controller(s) and entering required particulars thereto, preparing draft board resolution, keeping the SCR at our office and acting as the Designated Representative
- Acting as process agents
- Vote counting for non-listed companies in Hong Kong
- Handling other ongoing secretarial compliance tasks
Make use of our compliance checklist to see whether your company is in compliance with the latest Hong Kong company law requirements.
Please feel free to contact us should you be interested in any of our above services.