Embarking on an entrepreneurial journey is a step toward turning dreams into reality. Amidst Asia's vibrant business landscape, Hong Kong shines as an opportunity hub for those who embrace innovation, creation, and growth.
As you set your sights on establishing your very own Hong Kong company, this guide will stand as your compass, guiding you through the intricacies of incorporation with precision and expertise.
What types of companies can be incorporated in Hong Kong?
To begin, let's dive into the most common company type in Hong Kong, a limited company. "Limited" refers to being limited by shares, which implies that shareholders' liability is confined to the extent of their share capital. The key purpose of a limited company is to provide extra protection for founders, ensuring their capital remains legally separate from the company's assets.
In Hong Kong, two other notable types of companies can be incorporated:
-
Company Limited by Guarantee: This type of company is commonly used by non-profit organizations. Members' liability is restricted to a predetermined guaranteed amount, pledged to contribute if the company is liquidated.
- Sole Proprietorship: In this structure, an individual owns and operates the business. No legal distinction exists between the owner and the business entity. This stands in contrast to a limited company.
What are the requirements for incorporating a company in Hong Kong?
Once you've chosen the type of company you wish to establish, it's time to delve into the specific requirements. Let's outline the essential elements to consider for a limited company in Hong Kong:
Company Secretary – Role and Duties
The Company Secretary plays a pivotal role in ensuring the company adheres to legal requirements and regulations. They manage statutory records, coordinate meetings, perform change of company information, and facilitate communication between the company and government bodies.
In Hong Kong, having a Company Secretary is mandatory, with the role assigned to either a Hong Kong resident or a corporate entity registered in Hong Kong.
Registered Address – Do you need one?
All Hong Kong companies must possess a registered address within the territory. This address serves for official correspondence from government agencies and legal documents. It must be a physical address, not a PO Box.
Designated Representative – Who is and why is mandatory
This role is responsible for reporting the Significant Controllers Register (SCR) to local authorities, disclosing the ultimate beneficial owners (UBO) of the company. This role manages updating the register of the actual owners of the company.
Why is this necessary? Hong Kong permits the use of nominee directors and shareholders, individuals who provide their names to conceal the actual owner. This is done for various reasons, from commercial tactics to self-protection.
How does the Hong Kong Government determine who's really behind the company? The Designated Representative handles these tasks.
Since March 2018, Hong Kong has taken a stand against money laundering by implementing the AMLO regulation (Anti Money Laundering Ordinance). Every company must appoint a Designated Representative to update the SCR with details of all UBOs (Ultimate Beneficial Owners) of the company. It's important to note that this role can also be filled by a Hong Kong resident or a licensed company.
Company Name – How to choose one
Thoughtful consideration is vital when selecting a company name. It should not match any existing company in Hong Kong and should not be offensive. Certain terms, like "bank," "trust," or "insurance," require approval from relevant regulatory bodies. If you opt for a limited company, its name must conclude with "limited".
Directors and Shareholders – Who can be a Hong Kong company director?
To establish a Hong Kong company, you'll need a minimum of one director and one shareholder. The director can also serve as the sole shareholder, allowing a single individual to hold both roles.
- The person must be 18 years old or above.
- The person may be a local Hong Kong citizen, or a foreigner (who does not have permanent residency in HK).
Share Capital - Are there any specific share capital requirements?
Unlike certain jurisdictions, Hong Kong doesn't specify a minimum share capital requirement. This flexibility allows company incorporation without allocating a minimum capital amount (companies can be incorporated with 1HK$ of Share Capital).
Conclusion
By comprehending these factors and understanding the requirements, you'll be well-prepared to navigate the process of incorporating a company in Hong Kong.
If you find yourself in need of assistance or guidance on the process of incorporating a company in Hong Kong, please don't hesitate to reach out to us. Our team of experts is ready to tailor the best solution to meet your specific needs. Your business expansion journey begins with a simple click – we're here to help.