How To Register A Hong Kong Company And The Benefits You Can Get?
[dropcap]F[/dropcap]irst, let’s analyze the advantages of incorporating a Hong Kong company.
1. Ultra-low tax rate and tax incentives for Hong Kong companies
Hong Kong has a simple tax system. There are two main types of tax for HK companies, profit tax, and salaries tax.
1) Profit tax: Any company operating in HK is subject to profits tax at a rate of only 8.25% of profits (8.25% for the first 2 million HK$ of profits), one of the lowest tax rates in the world.
Hong Kong adopts a territorial source principle of taxation, so only profits or income derived from HK are taxable. There is no businesses tax or VAT for companies, which is lower than the 25% corporate income tax rate for Mainland companies.
According to the data released by the HK Government on 26th of May 2021, 91% of HK companies do not need to pay profits tax, and this percentage has remained constant and very stable for almost seven years.
2) Salaries Tax: Companies that have physical offices and employ people in HK are subject to salaries tax. The way to calculate salary tax is by using a progressive or standard rate.
2. Lax government regulation and free flow of funds
HK implements a completely free-market economic system, allowing businesses more freedom in taxation, operations, and capital. HK allows free flow of foreign exchange, the existence of shell companies, minimal restrictions on the scope of business, and flexibility and ease of company management.
3. A sound business environment helps companies to grow and to go anywhere in the world
HK is one of the world’s international financial centers, with a sound financial system, a robust legal system, and an ideal environment for starting a business. It is very convenient to set up a company here, and you can get the necessary supporting services for company registration and operation.
The HK Government encourages mainland enterprises to come to HK for development and provides them with preferential tax policies, diversified financing channels, and assistance in moving towards the international market.
4. Easy and low-cost company registration maintenance
Company registration and subsequent maintenance and management are left to the agent, without traveling to HK in person. The cost of maintaining an HK company is also relatively low.
There are three most important conditions for registering an HK company:
– Local statutory secretary in HK
Registration of an HK company requires the provision of a local statutory secretary in HK, which can be either a company or an individual.
1. Company secretary: A person must be a TCSP licensed secretary to act as a Statutory secretary of an HK company;
2. Personal Secretary: You must be an HK resident to provide an HK address to act as the Statutory Secretary of an HK company. The Statutory Secretary and the Director cannot be the same person.
– Local registered address in HK
The registered office of an HK company must be in HK. The registered address can be your physical office address in HK or an address provided by an HK secretary company for your registered use.
The address is required to receive various notifications from the HKSAR Government by ordinary mail, so it is essential to ensure that the address is genuine and valid to avoid omitting the notice from the HK Government and causing adverse impact to your HK Company.
– Natural persons over 18 years of age
The Director of an HK company must be a natural person and must be a legal citizen of at least 18 years of age with the ability to act on his own, regardless of nationality. Therefore, at least one person can set up an HK company.
If and only if those conditions are fulfilled, you could register an HK company. Generally speaking, the registration process of registering an HK company is as follows:
1. Find an agent (the agent can provide you with a statutory secretary in HK, a registered address in HK, and handle registration matters);
2. Provide information related to the registered company (company name, director shareholder documents, and shareholding, registered capital, business scope);
3. Signing of the registration agreement and payment by both parties;
4. The agent submits the application for incorporation of the company to the HK Government;
5. 2-3 working days or so, is necessary for company’s agent to complete a full set of HK company registration matters, arrange to send the company certificate, official seal, and other documents.
