A Private Limited Company is the most commonly-used legal entity in Hong Kong that is separate and different from the people who run it.
Hong Kong resided on the south-eastern of China and in the center of fast developing East Asia which is a pretty attractive place to incorporate for foreign investors and businesses since Hong Kong is adjacent to China and has an attractive tax system with no VAT, no capital gain tax and no withholding tax.
Hong Kong further offers a great business atmosphere with no limitations of business scope, a world-class infrastructure, and an well-found internet banking system. Your dream to incorporate a company online or to create offshore accounts will comes true here.
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Advantages of making an Offshore Company in Hong Kong
A moderate and manageable tax policy and a simple company incorporation and legal framework are the two key advantages that you can get when incorporating an offshore company in Hong Kong rather than in other nations.
Low tax rate: Hong Kong has a low and easy tax policy, with no GST or VAT. Its profits tax rate further identified as the Corporation Income Tax rate is just 16.5%, which is one of the lowest in the entire world. The Hong Kong profits tax is imposed on a source basis rather on a worldwide basis.
Simple offshore company formation: A Hong Kong company does not need its shareholders or directors to be Hong Kong residents. Foreigners can be the organization’s shareholders or administrators. The setup charge and annual maintenance expenses are low.
Great legal system and framework: Hong Kong follows the general law legal policy, which is a great judicial system for defending and enforcing legal rights and responsibilities arising under business contracts and transactions. Hong Kong uses internationally acknowledged codes of disciplines in business and commerce.
Flexible meeting: It is not necessary to hold a meeting in Hong Kong. Owners who have incorporated a company online can easily take advantage of recent technology from any part of the world.
Easy source concept: Hong Kong’s taxation policy is based on source and not on a residency idea. Unlike other countries such as the United States, Canada, and China, which tax their citizens on worldwide earnings, Hong Kong has a simplistic tax practice in which only income originating in or received from Hong Kong is taxable. Offshore income is not taxable. The difference between resident and non-resident organizations is usually not applicable under the Hong Kong taxation system. This helps the investor to incorporate a company online without worrying about fighting through various tax legislation.
An annual general meeting (AGM) need to be held once in every calendar year and not more than 15 months after the last preceding AGM. Nonetheless, a business need not hold its first AGM until 18 months of its establishment. A company can dispense with the holding of AGM if everything that is needed or expected to be done at the meeting is done by decisions.
Financial center: Hong Kong is an international commercial center. There are no restrictions to access to the financial market by foreign businesses and no limitations on capital inflows and outflows in Hong Kong. Hong Kong has no exchange restrictions as well.
Accounting requirement: A Hong Kong company must keep accounting records. Every organization needs to appoint an auditor from accounting services providers like Startup Formations who must be a member of the Hong Kong Society of Accountants and hold a practicing certificate. Yearly return is needed to be filed to the Companies Registry within 42 days after the date of the anniversary of establishment, and then each year thereafter. Government filing fee is HK$105. Professional fees will change depending on service providers.
Key Features of Hong Kong Limited Companies
- Separate legal entity
- Minimum of one shareholder
- Minimum of one director
- Shareholders and administrators can be the same
- No minimum capital requirement
- No Hong Kong shareholder is needed
- No Hong Kong director is needed
- No employee is required to be hired
- No office is needed to be rented
- Open bank accounts anywhere in the world
- A Hong Kong company secretary is needed (As an accounting firm company, we can provide it at a low cost)
- A Hong Kong-registered office is required (We can provide the registered office at a low cost)
Secretary: Needed, (can also be a legal person, resident in Hong Kong)
Registered Agent: Needed
Registered office: Required
Letters: From Roman alphabet or in Chinese
The company name must end with such suffix or it’s abbreviation: Limited
Restricted Names: Any name would compose a criminal offense or is vulgar or otherwise against to the public interest. Any name would be likely to give the idea that the organization is connected in any way with the Central People’s Government or the Government of the HKSAR or any agency of either government such as Department, Government, Commission, Bureau, Federation, Council, Authority.
Names Requiring Consent or a Licence: Asset management, Assurance, Authority, Bank, Building Society, Bureau Federation, Chamber of Commerce, Chartered, Commission, Co-operative, Council, Department, Fund Management, Government, Insurance, Investment Fund, Kaifong, Mass Transit, Municipal, Re-Insurance, Royal, Savings, Tourist Association, Trust, Trustee, Underground Railway
- Restricted connections for organization name: name of state, national or local government.
- Any name that indicates unlawful activity or means royal or government support is restricted.
- The registrar may reject any name which it considers undesirable or contrary to the public interest.
- The company name is restricted to be identical or similar that of an existing company.
- In a case when a foreign language is used for company name the translation may be asked by Registrar to ensure conformity to above-listed restriction.