Although Hong Kong does not have any definite legislation that governs offshore company formation, it is one of the most attractive jurisdictions for establishing an offshore company owing to its low tax regime, the absenteeism of foreign exchange restrictions, political and economic security, the comfort of offshore company setup, etc. Setting up an offshore company in Hong Kong is the ideal vehicle for carrying offshore banking activities, international trade, investment activities, and for asset protection.

Overview

Hong Kong is one of the world’s energetic cities, together with London, New York, and Tokyo is recognized to be one of the biggest appreciated business centers in the world. Hong Kong’s geographic location as a gateway between the East and West has given it a charming center for international trade.

Hong Kong is not commonly viewed as an offshore country as it is recognized for being a significant financial center, though, it is one of the few nations in the world that tax on a regional basis.

Under the Securities and Futures Ordinance (SFO), Type 9 “asset management”, suggests providing a service of maintaining a portfolio of protection or futures contracts for customers on a discretionary basis. This class of organized activity will cover discretionary investment managers, whether managing a hedge fund, report or related fund.

It is important to note that the Type 9 license not only incorporates portfolio management actions but further authorizes the incidental marketing of funds which are maintained by the authorized organization as well as incidental investigation and securities analysis. Consequently, such related exercise provides a Type 9 licensed organization to carry out activities without the requirement to obtain Type 1 and Type 4 licenses, respectively.

The people who carry on regulated functions on part of a licensed corporation are expected to be licensed representative accredited to the licensed corporation (LRs). For the goal of receiving a license, an Applicant Company will require to designate at least two such people as responsible officers (ROs). ROs are LRs who actively engage in or directly conduct the organized activity to be conducted by the application corporation. At least one RO must be an administrative director of the corporate entity that actively engages in or is liable for directly supervising the conduct of Type 9 regulated activity for which they are authorized. Every administrative administrator who is an individual must be approved by the SFC as an RO.

There must in all events be at least one RO citizen in Hong Kong ready at all times to supervise the company. The same person may be elected to be a qualified officer for more than one organized activity presented that he is fit and proper to be so selected and there is no dispute in the roles assumed. At least one of your suggested responsible officers must be an administrative director.

Notable features

General information

Company structure

  • Minimum 1 shareholder (can also be a legal person, no nationality limitation)
  • Minimum 1 director can also be a legal person, no nationality limitation)
  • Minimum 2 Responsible Officers (ROs)

Confidentiality

  • Shareholders’ details – are part of the public record, if you want to avoid it then kindly ask for a nominee service
  • Directors’ details – are part of the public record, if you want to dodge it then kindly ask for a nominee service

Taxation

  • Hong Kong tax on a regional basis. Profits tax is levied at the rate of 16.5% for income acquired from Hong Kong
  • Profits obtained from outside Hong Kong is tax exempt. There is no withholding tax on dividend or earnings and no capital gains tax. An organization, which brings on a business in Hong Kong, but derives profits from another place, is not expected to pay tax in Hong Kong on those profits
  • Double Taxation Agreements: Hong Kong has comprehensive double tax agreements with Austria, Belgium, Brunei, Canada, Czech Republic, France, Hungary, Indonesia, Ireland, Japan, Jersey, Kuwait, Liechtenstein, Luxembourg, Malaysia, Malta, Mexico, Netherlands, New Zealand, Portugal, Switzerland, Spain, Thailand, United Kingdom, Vietnam, Qatar and the Mainland China respectively to relieve taxation on income, for instance, dividends, interest income and royalties

Other benefits

Hong Kong forces no limitations on foreign investments and has no international exchange controls

  • Ease of business corporation and licensing
  • Favorable tax administration
  • A favorable administrative environment with impressive anti-money-laundering legislation
  • Company conferences need not be held in Hong Kong
  • An annual general meeting (AGM) need to be held once in every calendar year and not more than 15 months after the last previous AGM. However, a business must not hold its first AGM until 18 months of its establishment
  • Businesses may distribute with the holding of AGMs by unanimous shareholder’s permission

Accounting conditions – A Hong Kong business must preserve accounting documents, which may be kept at the certified office address or outside at the discretion of the administrators.

Audit obligations – Every organization need to select an auditor who must be a member of the Hong Kong Society of Accountants and hold a practicing license. Although there is no necessity to file reports with the Registrar, there is a condition to filing accounts with the tax officials. Annual revenue is expected to be filed to the Companies Registry within 42 days after the date of the ceremony of the establishment, and then each year thereafter. Expert fees will vary depending on service providers.

Secretary – Needed

Company name:

Language: Any

Letters: From the Roman alphabet

Names that are misleading or tricky are banned

The company name is restricted to be alike or similar that of an existing company

Offensive names are prohibited

Procedure

In order to receive a license, the subsequent steps will be carried out:

  • Gathering of appropriate KYC documents for initial confirmation
  • Establishment of an HK company
  • Development of relevant documents
  • Establishing a local office, local employees
  • Application for appointing 2 Accountable Officers
  • Applying for the license
  • The SFC grants pre-approval
  • The paid-up capital shall be deposited in full within a stated amount of time from the pre-approval
Important Documents

For local regulatory authority:

  •     CV
  •     A notarized copy of valid passport
  •     Notarized 2nd ID
  •     A copy of evidence of residential address
  •     Bank Reference Letter
  •     Bank Statement Leller
  •     A notarized proof of a University Diploma
  •     Signed and notarized application forms
  •     Two Acknowledged letters from a notary, lawyer, auditor or similar

N.B.

  •     If documents are not in English language or language of a particular country, then they need to be brought by a notarized translation.
  •     Please guarantee that notarization is in the English language if not then kindly present with notarized English translation.
  •     Additional papers may be asked by the regulatory authority or local Bank at any point to certify specific information