Hong Kong

Description

Hong Kong is a leading international financial centre of Asian and Pacific region, one of the leading financial centers in the world and most famous Asian offshore zone. Hong Kong economics is based on a free market, low taxation rate and non-intervention of government. Hong Kong is one of the leading financial centers, where the headquarters of almost all biggest world corporations are located.

General information about Hong Kong Private Limited Company

  • Any company, registered in Hong Kong, is obliged to appoint a secretary, which may be a Hong Kong legal entity or a private individual (Hong Kong resident).
  • The company must have at least one director and one shareholder, and at least one director must be a private individual (resident of any country). Hong Kong shares are registered, so bearer shares are not issued.
  • Standard amount of share capital in Hong Kong is 10 000 HKD, which is 10 000 shares, each for 1 HKD
  • The company must obtain Certificate of Incorporation, as well as Business Registration Certificate – the number of the latter will be registered as a company taxpayer number in Hong Kong.
  • Company name must be in English, or both in English and Chinese.
  • Registered address and a secretary are obligatory for an offshore company in Hong Kong

UniverseLAW offers full range of professional services, associated with business organization in Hong Kong:

  • preparation and submission of the documents, required for company registration in Hong Kong;
  • legal address;
  • preparation and submission of documents to register the company as a VAT payer (VAT number);
  • arrangement of visits and accompanying clients for the notary office visits;
  • assistance in opening a bank account

Advantages

  • Offshore company formation is not possible in Hong Kong, but for many nonresidents and local citizens there is a preferential taxation, which leads to minimum financial losses out of general income amount. In other words, a Hong Kong company is not a classical offshore, but receives similar benefits.
  • Actions with the company capital are not monitored, there is no currency control, and nonresidents may count on facilitated credit or loan procedure, opening a Hong Kong company.
  • Simple taxation system: single tax, tax benefits and privileges.
  • Government support for business.
  • Possibility to conduct business in China.
  • Registration of a company in Hong Kong gives possibility to obtain a residence permit inside the administrative region.

Taxation

The main basic feature of Hong Kong is a territorial principle of taxation. Hong Kong companies are subject to taxation only if they conduct business in Hong Kong and receive income from a source inside the country. The income, received abroad, is not subject to taxation, even if such income is accumulated on accounts in Hong Kong.

Taxes in Hong Kong

  • Income tax (private individuals income tax): is calculated with a progressive rate (depends on the salary level) and varies from 2 to 17%. Some tax deductions are also available (deductions for dependants, children, tuition fees, mortgage, etc.)
  • Net profit tax for companies is fixed: 16,5%
  • Property tax
  • Property rental tax (relevant for those who have a property in Hong Kong and rent it out).

Accounting

Each Hong Kong company on a yearly basis submits to the Tax department of Hong Kong the following documents:

  • Financial (accounting) statements
  • Auditor’s Report
  • Profit Tax Return

Financial statements in Hong Kong are filed together with Auditor’s Report and are called Financial Statements & Auditors Report.

List of required documents for registration and time frames

Required documents:

  • A copy of Memorandum and Articles of Association. Both documents may be filed by the company which assists you in company registration.
  • Incorporation form, properly filled in, which includes the following:

1. company name
2. legal address
3. short description of the company’s business activity
4. information about shareholders, directors and secretary
5. members’ obligations
6. share capital, registered for the company registration
7. amount of shares held by shareholders

If the shareholders and directors are nonresidents:

  • passport copy, document confirming residence address abroad, reference letter from the bank;

If the shareholders and directors are legal entities:

  • copies of the documents of the mother company (Incorporation Certificate, Memorandum and Articles of Association)

Time required for company registration and formation:

The registration takes 5 working days, regardless of whether the company is newly registered or is ready-made.

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