Hong Kong stands out as a worldwide hub for business, drawing entrepreneurs and corporations from all corners of the arena. Its enchantment lies in its business-friendly environment, characterized by favorable tax regulations , a strategic function inside Asia, and workers famed for their talents and knowledge. It is no surprise that setting up a business in Hong Kong is an attractive proposition for many.
Registering a company in Hong Kong normally starts with deciding on a completely unique organization name. This step is critical in setting up your enterprise’s identity. The manner culminates with the issuance of a business Registration certificate and a certificate of Incorporation, signifying the professional recognition of the business enterprise. All through this technique. Key government entities play critical roles: the Company Registry, liable for overseeing organization registrations, and the Business Registration Office , part of the Inland Revenue Department , which handles the commercial enterprise registration component.
Registering A Company in Hong Kong – Steps
Company Name
You have the choice to pick out either an English or a Chinese language name whilst growing a company. However, mixing English words or letters with Chinese characters in one call is illegal. Before finalizing a name, it’s essential to test with the Company Registry to ensure that the name, or a comparable one, isn’t always in use. The chosen name must also not violate existing intellectual property rights, which can be verified through the Intellectual Property Department’s website.
The word “Limited” must be included at the end of the company name for limited companies. If you wish to exclude “Limited” from your company’s name, you must submit a specific application to the Companies Registry.
Deciding on Important Aspects like location, structure, and capital investment.
After naming the company, the next step is to decide on the board of directors. The first shareholder, or founding member, must obtain written consent from the chosen director(s) and secure copies of their identification and proof of residential address.
The amount of capital and the number of shares for the initial shareholders are also critical decisions. Under the Companies Ordinance (Cap. 622), no minimum or maximum capital requirements exist. This lets you decide the capital amount based on operational needs and any additional licenses your business might require. The shares issued do not have par values.
The Articles of Association should specify only the number of shares and the capital amount. You must contribute the stated capital amount immediately after the company’s registration. Every registered company must appoint at least one natural person as a director, with no restrictions on nationality.
Before registering a company in Hong Kong , you should also decide on the company secretary, the designated representative for the significant controllers register, and the registered office address. One can double as the company secretary if your company has multiple directors. However, if you ‘re the sole director, you must appoint another individual as the company secretary, obtain their written consent. You can also opt for a professional firm in Hong Kong to handle these secretarial duties for an annual fee.
The registered office address must be in Hong Kong and can’t be a PO box number. If you’re not planning to lease a physical office, consider using a professional firm’s services, ensuring they hold a Trust and Company Service Providers (TCSP) license.
Registration Documents
You have to get and prepare numerous crucial papers for registration as an investor. The Articles of Association, incorporation form, and Business Registration Office Notice are included. Once complete, send these papers to the Companies Registry with incorporation and company registration costs.
Read more : Documents You Need To Open A Company in Hong Kong
The incorporation application cost is HK$1,720 (US$220), although the “e-Registry” site reduces it by 10%. Business registration costs HK$2,150 (US$274) for a one-year certificate and HK$5,650 (US$720) for a three-year certificate, effective from April 1, 2022, to March 31, 2023. You may register a new company in HongKong for one or three years. If your paperwork meets current requirements, the Companies Registry will issue a Certificate of Incorporation and Business Registration Certificate, acknowledging your company’s legal existence.
Online registration is usually possible for companies whose founding members are e-Registry members. You may also register a new company in HongKong on paper. Excluding the time to prepare the documents, the registration process usually takes one to five working days.
Certain business activities may require additional permits, certificates, or approvals. These specific requirements can be checked through the Business License Information Service of the Trade and Industry Department.
Chop and Printing Articles of Association
Once your company is formally incorporated, the next step is to create the company chop (or stamp) and print the Articles of Association. Hong Kong has streamlined the process for executing company documents. It’s now optional for companies to maintain and use a common seal . Furthermore, the Articles of Association can be maintained in electronic form. You should seek a service provider specializing in these tasks to get them done.
Compliance Requirements for Registering a Company in Hong Kong
Annual Compliance Requirements
Operating as a limited company, recognized as a separate legal entity, comes with its legal obligations. These are primarily dictated by the Companies Ordinance (Cap. 622). One of the key responsibilities is to ensure transparency through the regular disclosure and updating of information about the company, its officers, shareholders, and any notable changes. This information is filed with the Registrar of Companies HK , allowing public access to the latest company data.
The annual compliance tasks for registering a company in Hong Kong include:
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Filing of Annual Return
An essential part of the task is ensuring the company’s structure and finances are updated yearly. The Annual Return is a formal document outlining the present status of the company, including information regarding its shareholders, directors, and financial health. Maintaining transparency and complying with regulations both necessitate this document. This keeps the authorities and anybody else interested in the company’s financial and governance status informed.
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Business Registration Renewal
The company’s legal operation must keep the business registration current. Registrations for businesses in Hong Kong usually expire after one year and need renewal. To keep the company’s legal recognition and ability to do business intact, it is necessary to go through this renewal process. Penalties and/or the suspension of company operations may ensue for failing to renew the registration.
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Annual General Meeting
One of the most important things that Hong Kong law requires of businesses is that they hold an annual general meeting. The annual general meeting is the principal forum where the company’s management and shareholders may communicate with one another. Finances, strategy, and governance are the most important topics covered at these meetings. The shareholders get a say in the company’s future by asking pertinent questions, casting votes on significant issues, and making decisions.
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Choosing an Auditor
The business must choose an auditor carefully if it wants to monitor and verify its finances. The auditor will provide an independent opinion on the accuracy and compliance with accounting standards of the company’s financial statements after their examination. The procedure guarantees that the company’s financial data is accurate and complies with all applicable laws and regulations.
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Preparing Audited Financial Statements
Financial statements audited by a trained auditor are prepared and presented. These statements clearly and accurately show the company’s fiscal year financial situation and performance. Balance sheets, income, and cash flow statements are common financial statements. Shareholders, investors, and regulators use them to evaluate the company’s financial health and ensure financial transparency.
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Updating Company Structure Changes with the Companies Registry
Companies must notify the Companies Registry of any organizational structure or management changes. This category includes changes to the company’s registration address, number of directors, or shares held. Notifying the public and regulatory agencies of these updates promptly is crucial for maintaining compliance with the law and providing them with accurate information on the management and structure of the firm.
Controller Register Compliance
Under the Companies (Amendment) Ordinance 2018, all non-listed companies incorporated in Hong Kong must adhere to the significant controllers register requirements. These requirements include:
- Determining who has substantial control or influence over the company.
- This register must be updated and accessible to law enforcement on demand.
- This person assists law enforcement with inquiries about the company’s significant controllers.
- The register must be kept at the company’s registered office or another specified location in Hong Kong.
- Keeping the register current with any changes in control or influence.
- Non-compliance with these requirements can result in criminal offenses.
A “significant controller” is defined as an individual or legal entity meeting one or more of the following criteria:
- Over 25% of the company’s shares hold capital, or profit share, directly or indirectly.
- Over 25% of the voting rights in the company, either direct or indirect
- Veto to promote or demote directors, directly or indirectly.
- Influencing or controlling the company.
- Significantly influencing or controlling a trust or corporation that fits any of the aforementioned corporate characteristics.
Inspection Regime
The Companies Ordinance (Cap. 622) in Hong Kong regulates an inspection framework to protect directors and other critical persons listed on the Companies Register. This government has made significant privacy and transparency improvements. The regime makes two key changes:
- Correspondence Addresses: Instead of directors’ URAs, the Companies Register displays their correspondence addresses.
- Partial Identification Numbers (IDNs): Full IDNs of directors, company secretaries, and other relevant individuals like liquidators are replaced with partial IDNs for public inspection. The method for deriving the partial IDN depends on whether the IDN is an odd or even number.
URAs and full IDNs are now classified as “Protected Information.” Previously, this information was fully accessible to the public.
Implementation Phases
There are three stages to the rollout of this new regime, and each one adds a brand new layer of records security:
August 23, 2021- Phase 1
Corporations have been given the heads up to update their public information to encompass correspondence addresses instead of URAs and partial IDNs rather than entire ones.
October 24, 2022 – Phase 2
Within the 2nd phase, which commenced on October 24, 2022, the companies sign-in started showing partial IDNs and correspondence addresses on the Index of administrators in place of blanketed facts. After this section starts offevolved, no one apart from legal persons or businesses will be capable of seeing documents submitted with protected records.
December 27, 2023 – Phase 3
People whose URAs and whole IDNs had been registered with the Company Registry before the company’s new regime might also follow to have their covered statistics withheld from the public investigation starting in phase 3. In this phase, partial IDNs and correspondence addresses are probably substituted for such records within the check-in.
Conclusion
Companies and individuals in Hong Kong must update their personal information with their service providers and submit the necessary applications to the Companies Registry if they desire to conceal their Protected Information from public scrutiny. Following these procedures is essential for meeting the requirements of the revised Companies Ordinance’s privacy protections and the new inspection regime. Learn more about registering a company in Hong Kong at SetupHK.
