Three major things to prepare in advance for starting a company in Hong Kong
Every year, over 100,000 companies are established in Hong Kong. There are three things that must be confirmed in advance before starting a company; otherwise, mistakes or delays may occur during the application process. This article focuses on these three preparatory steps to help you be fully prepared before submitting your application.
- 1. Before establishing a limited company, three things must be confirmed: company structure (directors, shareholders, company secretary), company name, and registered address.
- 2. The company name must not be the same as or too similar to an existing company, and the Chinese name must be in traditional characters, while the English name must end with "Limited."
- 3. When appointing an external company secretary, it must be confirmed that the other party holds a TCSP license, which is a legal requirement.
- 4. A virtual office can legally serve as a company address in Hong Kong, with costs starting at approximately HK$1,000 per year.
Three major preparations before opening a company in Hong Kong
There are three major preparations that must be taken care of beforehand, otherwise you will find it very difficult to start a company! The process of opening a limited company is different from that of an unlimited company in that there are more details to be prepared beforehand, including the company structure, company name and registered address. Click here to learn morelimited company與UnlimitedThe difference between the two.
Below are the top 3 things you need to prepare in advance to set up a Hong Kong limited company:
Determine the corporate structure
Every private limited company must have at least one director who is a natural person and a company secretary, so it is necessary to first determine which members of the company should be directors and who should be the company secretary.
board member - Must be at least 18 years of age and can be a Hong Kong resident or an overseas passport holder. If the company has only one director, the director must not also be the company secretary of the company.
Shareholders 5. — At least 1 person, who can be the same as a director, with no nationality restrictions. Shareholders are responsible for funding and owning company shares but do not necessarily participate in daily management. For detailed differences between shareholders and directors, please refer to:What is the difference between shareholders and directors?
Company Secretary - The company secretary of a private company may be one of the directors. The company secretary's duties need to ensure that the administrative and legal responsibilities of the company are fully discharged and to act as an adviser on corporate governance.
6. Before appointing an external company secretary, it must be confirmed that the other party holds a valid TCSP license. Providing company services without a license is illegal and may result in a fine of up to HK$100,000 and imprisonment for 6 months. You can check at7. The company registry of TCSP license holders8. for verification.
Company Name
Can I change my company name as long as it is not repetitive? Of course not, you have to make sure that your company name complies with the registration requirements.Guidelines on Registration of Hong Kong Company Names。
Simple Guidelines for Registration of Company Names
- 9. A company can register one English name and/or one Chinese name, but cannot use a name that combines both Chinese and English, and the Chinese name must only be in traditional Chinese; simplified Chinese cannot be used.
- 10. The ending requirement for company names states that the last word of the English name must be “Limited.” Although Ltd and Limited have the same meaning, according to Section 102 of the Companies Ordinance, the last word of a limited company's English name must be ”Limited.” The last four characters of the Chinese name must be "有限公司."
- 11. It must not be the same as or too similar to an existing company name. Violators will receive instructions to change the name, and if they fail to do so in time, the relevant personnel may face a fine of up to HK$100,000 and may be subject to a daily penalty of HK$2,000 or be forced to change the name.
- 12. Approval must be obtained before using terms such as chamber of commerce, kaifong, levy, savings, tourist board, tourist association, trust, trustee,受託,信託,旅遊協會,旅遊發展局,商會,街坊,徵費,儲蓄.
- 13. Other legally regulated terms include bank, exchange, and securities exchange.
If the name is unusable a new application is required, if the name is too similar to another company a name change direction will be issued, if the name is not changed the company or its officers can be prosecuted with a maximum penalty of a fine of $100,000, if the default persists a daily default fine of $2,000 or a compulsory name change is imposed, so a company name change can not be a simple matter.
Check Company Name
To ensure that the company name can be used, before applying for a company, you can go to the Companies Registry'sOnline Search CentreCheck whether the proposed company name has been registered for use.
It is important to note that a company name is different from a trade mark, and that a company name does not mean that a company name can be used as a trade mark.Trademark Registration14. The department responsible for company registration is different; if the company name is to be used for promoting or operating its goods or services, a separate application must be made to the trademark registry to register the trademark to obtain protection under15. the Trademark Ordinance (Chapter 559).16. Therefore, in addition to checking the online registry at the company registry, it is also necessary to visit the Intellectual Property Department.
17. For detailed checking procedures, please refer to:Online Search SystemEnquiry.
18. The registered address of the company will become publicly available information at the company registry. Additionally, many companies do not require an office or storefront, so they may choose to use registered addresses or virtual office services provided by accounting firms, business centers, or secretarial companies, and some even choose to register the company at their own residence.Company name search tutorial: 5 steps to confirm availability
Registered Address
According to the Hong Kong company law, all companies established in Hong Kong must have their registered office in Hong Kong, and also need to use a Hong Kong business address as the registered address of the company, it should be noted that the registered address must be the actual address, not the use of postal mailboxes.
19. However, if you use your residence as the company address, any disputes involving the company may cause you unnecessary trouble. Therefore, many people choose to rent a commercial registered address. This method is quite affordable, with costs starting at only HK1,000 per year, which can reduce unnecessary hassles.
However, if you use your residence as the company address, any disputes that arise may cause you unnecessary trouble. Therefore, many people choose to rent a commercial registration address. This method is quite affordable, with the annual cost starting as low as 1,000 HKD, which can reduce unnecessary hassles.
For considerations when choosing virtual office services, please refer to:What is a virtual office? 2 key points to consider
Frequently Asked Questions
Can a foreigner serve as a director?
Yes. There are no restrictions on the nationality of directors in Hong Kong, and non-Hong Kong residents can also serve as directors, provided they present a valid passport and proof of address. However, if the company has only one director who is a non-local resident, a company secretary must be appointed separately, and it must be confirmed that the other party holds a TCSP license.
Can the company secretary do it themselves?
It depends on the situation. If the company has multiple directors, one of them can also serve as the company secretary. However, if the company has only one director, that director cannot also serve as the secretary and must be appointed separately. If appointing an external secretarial company, it must be confirmed that the other party holds a valid TCSP license; otherwise, it constitutes illegal operation.
Does the company name need to be registered in both English and Chinese at the same time?
No, it is not necessary. A company can register only an English name, only a Chinese name, or both names simultaneously; all three methods are legal. However, a name that is a mix of Chinese and English (for example, "ABC有限公司") is not compliant.
Conclusion
Once the three preparatory confirmations are completed, you can start submitting the company application.
If you have any questions about setting up a company in Hong Kong, feel free to contact the Long Peak Business Consulting team. We provide one-stop business consulting services to help you develop your business blueprint.
Extended Reading:
Hong Kong Company Setup Guide: 6 Major Steps, Costs, Required Documents
Limited company or unlimited company? 3 aspects to help you decide quickly.