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Hong Kong Private Limited Company Information


» Key Corporate Features
» Information
» Company Information
» Compliance


 Key Corporate Features


General
Type of entity: Private Limited
Type of law: Common
Shelf company availability: Yes
Our time to establish a new company: 7 days
Minimum government fees (excluding taxation): US$320/US$65
Corporate taxation: Nil on Foreign Profits
Double taxation treaty access: China - Corporate and Personal Income Tax. Belgium,Thailand, Luxembourg - dividends, interest and royalties.
Some other Countries - for shipping and aviation.
Share capital or equivalent
Standard currency: HK$
Permitted currencies: Any
Minimum paid up: HK$1
Usual authorised: HK$1,000
Directors or Managers
Minimum number: One
Local required: No
Publicly accessible records: Yes
Location of meetings: Anywhere
Members
Minimum number: One
Publicly accessible records: Yes
Location of meetings: Anywhere
Company Secretary
Required: Yes
Local or qualified: Local
Accounts
Requirement to prepare: Yes
Audit requirements: Yes
Requirement to file accounts: Yes
Publicly accessible accounts: No
Other
Requirement to file annual return: Yes
Change in domicile permitted: No

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Company Information

» Type of Company for International Trade and Investment

Private Company limited by Shares.

» Procedure to Incorporate

Submission of Memorandum and Articles of Association and a prescribed form with the Hong Kong Companies Registry. A Notice of Situation of Registered Office is also required to be filed within fourteen days of the date of incorporation.

» Restrictions on Trading

Cannot undertake banking or insurance activities or solicit funds from or sell its shares to the Public.

» Powers of Company

A Hong Kong Company has all the powers of a natural person.

» Language of Legislation and Corporate Documents

Chinese and English.

» Registered Office Required

Yes, must be maintained in Hong Kong.

» Name Approval Required

It is not possible to reserve a name. It is essential to check that there is no similar or identical name on the register, which would prevent the company being incorporated.

» Shelf Companies Available

Yes.

» Time to Incorporate

Within 7 to 10 working days from the submission of documentation.

» Name Restrictions

A name that is similar to or identical to an existing company. A name that constitutes a criminal offence or is otherwise contrary to the public interest. A name that gives the impression of which it is connected with the Government of PRC, the Government of HKSAR or any departments of either Governments.

» Names Requiring Consent or Licence

Building society, Chamber of Commerce, co-operative, Kaifong, mass transit, municipal, savings, tourist association, trust, trustee, underground railway, bank, insurance, assurance, reinsurance, etc.

» Suffixes to Denote Limited Liability

Limited.

» Disclosure of Beneficial Ownership to Authorities

No.

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Compliance

» Authorised and Issued Share Capital

The usual authorised share capital is HK$1,000. The minimum issued capital is one share of par value.

» Classes of Shares Permitted

Ordinary shares, preference shares, redeemable shares and shares with or without voting rights.

» Taxation

Hong Kong is one of the few jurisdictions in the world that tax on a territorial basis. Many countries levy tax on a different basis and they tax the world-wide profits of a business, including profits derived from an offshore source. Hong Kong profits tax is ONLY charged on profits derived from a trade, profession or business carried on in Hong Kong. Consequently, this means that a company which carries on a business in Hong Kong, but derives profits from another place, is not required to pay tax in Hong Kong on those profits. Hong Kong sourced profits is currently subject to a rate of taxation of 16.5 per cent. There is no tax in Hong Kong on capital gains, dividends and interest earned.

The principle of Hong Kong profits tax is that it is a tax on profits that has its source in Hong Kong rather than a tax based on residence. Income sourced elsewhere, even remitted to Hong Kong, is not subject to Hong Kong profits tax at all. Consequently, if a Hong Kong company's trading or business activities are based outside Hong Kong no taxation will be levied.

A factor that determines the locality of profits from trading in goods and commodities is generally the place where the contracts for purchase or sale are effected. "Effected" does not only mean that the contracts are legally executed. It also covers the negotiation, conclusion and execution of the terms of the contracts.

If a business earns commission by securing buyers for products or by securing suppliers of products required by customers, the activity which gives rise to the commission income is the arrangement of the business to be transacted between the principals. The source of the income is the place where the activities of the commission agent are performed. If such activities are performed through an office in Hong Kong, the income has a source in Hong Kong.

Certain sums, like royalties, paid or payable to non-resident persons for use of or right to use certain intellectual property are subject to withholding tax. The payer who claims deduction for the use of the intellectual property against its assessable income is required to withhold a prescribed percentage from the payment while that recipient is not subject to Hong Kong profits tax. The prescribed percentage is 4.95% on the gross payment if the payer and the recipient are not related, but 16.5% if the payer and recipient are related. The recipients of the royalties who are tax residents of Belgium, Thailand, or Luxembourg enjoy the respective treaty rates.

» Double Taxation Agreements

Hong Kong has arrangement with a number of jurisdictions for double taxation relief of shipping or airline income. It has also comprehensive double tax agreements with Belgium and Thailand respectively to relieve taxation on income, for instance, dividends, interest and royalties. The Hong Kong Inland Revenue Department allows a deduction for foreign tax paid on a turnover basis in respect of income which is also subject to tax in Hong Kong. Therefore, businesses operating in Hong Kong do not generally have problems with double taxation of income.
The respective comprehensive double tax agreements with Brunei, Hungary, Indonesia, Kuwait and Netherlands will become effective from 1 April 2011 to relieve the applicable double taxation on various incomes.

» Licence Fees

The Business Registration Fee of HK$2,450, is due and payable within one month of the date of incorporation and then annually on the anniversary of the first payment. (Special tax concession arrangement by the HKSAR is granted from now until 31 July 2011; the Business Registration fee of each company is HK$450).

» Financial Statement Requirements

A Hong Kong company must keep accounting records, which may be kept at the registered office address or elsewhere at the discretion of the directors. Every company must appoint an auditor who must be a member of the Hong Kong Society of Accountants and hold a practicing certificate. Although there is no requirement to file accounts with the Registrar, there is a requirement to file accounts with the Hong Kong Inland Revenue.

» Directors

The minimum number of directors is one, who may be a natural person or a body corporate. Directors may be of any nationality, and need not be resident in Hong Kong.

» Company Secretary

A Hong Kong company must appoint a company secretary, who may be a natural person or a body corporate.

» Shareholders

The minimum number of shareholders is one.

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Disclaimer

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. OCRA Worldwide does not accept any responsibility, legal or otherwise, for any errors or omission.


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