Hong Kong, one of the unique administrative regions situated in Southern China, turns out to be a profitable business ground. With more than 7.4 million people, the field attracts global business investors to come forward and establish their business. The Hong Kong Company Registry is the governing body that formulates and regulates the companies in the region.
According to the legal proceedings, the region of Hong Kong stands as a tax-free jurisdiction that allows the privilege to business investor and professionals to come forward and start a business with a minimal tax-rate. If you are a business investor, seeking forward to invest in Hong Kong, then proceed ahead with the offshore company formation. This guide holds the essentials that you being an investor should know before an offshore company set up in Hong Kong.
What is an Offshore Company?
An offshore company is a business entity that gets incorporated to provide tax benefits to business investors. Know further: What an offshore company is all about?
What are the Uses of Hong Kong Offshore Company?
Global investors can use a Hong Kong offshore company can be utilized in the following ways:
- Set up a Holding Company
- Deal with import-export business between countries
- Deal with international business/ Expansion of existing business
- Investing in Stocks, Commodities, Forex and International Securities
Now, before moving on to the company incorporation process, let’s have a look at the key considerations.
Key Considerations
Before proceeding ahead towards the incorporation process, keeping a check on the below-mentioned key considerations will help you to set up the business entity is a hassle-free way.
Company Name
- The Hong Kong Companies Registry should approve the company name
Shareholders
- Minimum No. of Shareholder: One
- Maximum No. of Shareholder: Fifty
- Can be individuals or corporate entity
- No restriction on nationality
- Nominee Directors are allowed
- 100% foreign ownership allowed
- The sole director has the privilege to act as the shareholder
Directors
- Minimum No. of Director: One
- Maximum No. of Directors: Unlimited
- Can be individuals or corporate entity
- No restriction on nationality
- Nominee Directors are allowed.
Registered Address
- Proof of local physical address is a mandate
- The Address shouldn’t be a PO Box
Company Secretary
- Appointment of Company Secretary is a mandate
- Can be individuals or corporate entity
- The company directors and shareholders can’t act as the company secretary
Share Capital
- No restriction in share capital
- Bearer shares are not allowed
Corporate Tax Rate
- Business entities earning up to 2,000,000 HSD$: 8.2%
- Business entities earning above 2,000,000 HSD$: 16.5%
How to Open Offshore Company in Hong Kong?
Business owners can open an offshore company in Hong Kong, in two different ways:
- Register a new Hong Kong Company
- Purchase a Hong Kong Shelf Company
Below mentioned is the company registration process of a new Hong Kong Company Formation.
1.Name Approval
The first and foremost task is to obtain a Hong Kong company name approval by applying to the Company Registry. The general requirements of a company name are stated below:
- A company must be registered with an English name or a Chinese name
- Combination of English and Chinese characters are not allowed
- Should contain traditional Chinese characters
- The company name shouldn’t be a copy of an existing company
- The following words and expressions are regarded as the same-
- “and” and “&.”
- “Hong Kong”, “HongKong”, and “HK”
- “The Far East” and “FE”
2.Draft the Articles of Association
The next step after company approval is to draft the Articles of Association (AOA). An AOA is one of the crucial company documents that hold the proceedings that would take place in a company. The roles and responsibilities, organizational hierarchy etc. is involved in the AOA.
3.File the Documents with Company Registry
Once the documents get drafted, the next step involves the submission of essential documents which includes the following:
- Hong Kong company incorporation application form
- Hong Kong Offshore Articles of Association (AOA)
- Identity and Residential Address proof of shareholders and directors
- Copy of Hong Kong identity card for the national residents
- Parent company registration documents
4.Open an Offshore Bank
A corporate bank account is a mandate that is recommended to proceed ahead with during the offshore company registration in Hong Kong. This will help you to keep a track on the company finance from the very initial stage. Know more: how to open a corporate bank account in Hong Kong.
5.Register with Inland Revenue Department
According to the legal requirements, an offshore company must register with the Inland Revenue Department, and obtain a Business Registration Certificate within a period of one month of Hong Kong Company incorporation.
6.Avail for Business License (if required)
In case you want to conduct your business activities in the ground of Hong Kong, you need to check whether the legal processes mandate the obtainment of business license. In case if the business license is required, you need to obtain the same from the relevant authorities.
It can be seen clearly understood that the processes mentioned above will demand core documentation and legal proceedings that need to be carried out in an error-free way. Even a small glitch might lead to cancellation of business license, which involves enormous risk. Business owners and investors prefer to proceed ahead with business experts to avoid any confusion. By joining hands with experts, an investor gets the flexibility to avail the following benefits:
- Experts have gained in-depth knowledge regarding offshore company formation
- The market scenario is well-known to them
- The incorporation process is carried out at a faster pace
- The entire task is completed in a professional manner
- Every job holds a specific deadline for completion
Business Setup Worldwide is one of the top business setup consultants at an international level. Ranging from business setup process to incorporating other services like accounting, auditing, bank account etc. we take care of all entire company set up solutions. Our business experts hold industry knowledge and experience that allows them to provide tailored solutions suiting business needs. In case you have any query, do speak to our experts. Contact us today-we’d be glad to assist.
