in Hong Kong
There are different
types of business entities to setup in Hong Kong, depending
on which activities you wish to develop.
- Branch of Overseas Company: There is no specific requirements
for its establishment. A Hong Kong Branch need to register
within one month of establishing a place of business in
- Limited Company: Most companies operating in Hong Kong
are private companies limited by shares. The liabilities
of the company to the shareholders are the total share capital
as subscribed by each individual shareholder. The form would
typically include greater convenience, high degree of flexibility
associated with Hong Kong companies, wider acceptance both
in Hong Kong.
- Sole Proprietorships: It is not considered to be a separate
legal entity under the law, but rather is an extension of
the individual who owns it. He/She is directly responsible
for the debts and other liabilities incurred by the business.
The profit or loss of the business is combined with the
other income of an individual for income tax purposes.
- Partnerships: It is a legal entity recognised under the
law and hence it has rights and responsibilities in and
of itself. Each partner may be responsible for the liabilities
of the business. An income tax return has to be filed by
limited companies in Hong Kong is governed by the Companies
Ordinance. The memorandum and articles of association are
the primary legal document of a company, which states the
power and the internal regulations of the company. They are
required to submit to Companies Registry (CR) at the time
of incorporation. After approval by the CR, a Certificate
of Incorporation in name of that company is issued and the
company is formed & registered.
The basic structure of the company is having at least 1 shareholder,
1 director and 1 company secretary. The secretary and the
registered office address must be in Hong Kong.
You may find certified public accountants to do it on your
behalf because it is very time consuming for a business starter
to do it himself. Normally, they will offer 2 types of incorporation;
namely: tailor-made method and shelf company method.
Tailor-made method suits your requirements in the company
name, the share structure, number of shareholder/director
and some clauses in the articles of the association. Whereas
shelf company approach is that you buy a ready-made company
by selecting the name of the ready company. It is normally
having 10,000 shares of HK$1 and 1 issued share. The existing
subscriber will transfer the issued 1 share to the potential
buyer. The subscriber will sign a declaration letter confirming
that the selling company is clean and no business activity
since its incorporation. This approach is fastest way to incorporate
After incorporation of a company, there are numbers of procedures
to be followed and the company secretary normally handles
it on behalf. Hence he/she should be well-versed in the company
law and its changes. An annual general meeting (AGM) must
be held once in every calendar year and not more than 15 months
after the last preceding AGM. However, a company need not
hold its first AGM until 18 months of its incorporation. Every
company is required to appoint an auditor each year at its
AGM. An auditor must be qualified by virtue of the Professional
Accountants Ordinance and completely independent of the company.
In case of private company, its audited accounts must be laid
before its AGM not more than nine months from its financial