Private limited company registration in Hong Kong.

Hong Kong private limited company is the most popular type of business entity among individual entrepreneurs, startups and businesses with an interest in doing business within Hong Kong, and also outbound to China.

Private limited company registration in Hong Kong

What is a private limited company?

A private limited company (limited by shares) is the most common type of company for conducting business and trade in Hong Kong. As a standalone legal entity, it may acquire assets, enter contracts, go into debt, make legal agreements, etc. all in the name of the company.

Such an entity has a share capital which is divided into a number of shares of certain value each. These shares are held by shareholders who are entitled to a share in the profits of the company and receive a dividend corresponding to their respective percentage of shareholding in the company. In case of a loss, the shareholders will lose their investment in the shares of the company. By its constitution, a private limited company must limit the number of shareholders to 50 (not including employees and former employees), restrict the right to transfer its shares, and prevent any invitation to the public to subscribe for any shares or debentures. A private limited company is required to have at least one natural person as a director. There is no legal maximum for the number of directors, which can be individuals or corporations of any nationality, domicile and residence. A sole shareholder can be a director of the company.

The registered office of the company must be situated in Hong Kong but it is required to have a company secretary. If the company has one director only, the sole director cannot also be the company secretary. If the company secretary is a natural person, they should ordinarily reside in Hong Kong. If the company secretary is a corporate body, its registered office or place of business should be in Hong Kong.

Can foreign individuals or businesses set up a private limited company in Hong Kong?

Yes, Hong Kong does not place any restrictions on owning a limited company for foreigners. They can be sole directors and shareholders in their Hong Kong company, there are no local resident requirements. Moreover, foreign entities can operate their Hong Kong offshore limited company from overseas.

Advantages of setting up a private limited company.

Limited liability

Personal assests of shareholders are protected as their liability is limited to the amount of their investment.

Corporate bank account

Opening up of bank account in Hong Kong is relatively simple and straightforward with most local banks.

Fast setup time

An incorporation can be done within one week if there are no complications.

100% foreign ownership

Hong Kong allows 100% local or foreign shareholding and there are no further restrictions on foreign ownership.

Transferable shares

It is simple to transfer/sell the ownership of a company from one shareholder to another, or an investor.

Relaxed tax obligations

Corporate tax rate is set at 16.5% of assessable profits (only profits which arise in or derived locally are subject to tax in Hong Kong).

Here’s what you need to register a private limited company.

A unique company name
The company name must be unique and not used by others.
At least one shareholder
Shareholders can be individuals or corporations of any nationality, domicile or residence.
At least one director
The director does not have to be a Hong Kong resident.
A company secretary
They must be a qualified natural or juristic person living or registered in Hong Kong.
Address in Hong Kong
A local registered business address.
No minimum share capital requirement
Share capital can be expressed in any major currency.

Steps to setting up & managing a Hong Kong company.

1. Determining your company name

Select a unique name for your company, which can be in Chinese, English or both.

2. Registering your company with Companies Registry

3. Incorporate your business entity

Submitting the forms through Hong Kong’s 24-hour Companies E-registry

4. Opening a corporate bank account

You can opt to open a bank account with any local or international banks in Hong Kong.

5. Securing work permits

Applying for a work permit is very common and simple in Hong Kong for most nationalities. It is a requirement that a foreign individual needs to have the relevant work permit in order to work in Hong Kong. (only if applicable)

6. Obtaining permits and licenses

There are various types of permits and licenses that might apply to your business depending upon the nature of your services and products

7. Bookkeeping

Ensure all your transactions are clearly booked and preparing your management accounts, including profit & loss and balance sheet.

8. Knowing your tax obligations

A current profit tax rate that is applied to all businesses operating in Hong Kong is 8.25% on the first HKD2 million of profits and 16.5% thereafter and no capital gains tax. It is mandatory that the company files its taxes based on the applicable tax rates for every financial year.

9. Annual Filing

You need to be aware of the deadlines administered by the Companies Registry. You will need to adhere during the annual filing of your business entity as below:

  • To file an annual return each year, under the Companies Ordinance (CO)
  • A tax return must be filed to the Inland Revenue Department (IRD) every year, together with audited accounts

The requirements for filing an annual report varies with the type of business structure, whether you are a Registered Non-Hong Kong Company or a Local Limited Company in Hong Kong

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