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.
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?
Advantages of setting up a private limited company.
Limited liability
Corporate bank account
Fast setup time
100% foreign ownership
Transferable shares
Relaxed tax obligations
Here’s what you need to register a private limited company.
A unique company name
At least one shareholder
At least one director
A company secretary
Address in Hong Kong
No minimum share capital requirement
Steps to setting up & managing a Hong Kong company.
1. Determining your company name
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
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
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
Resources
- HR & payroll guides
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