Hong Kong company registration

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For over a decade, Healy Consultants efficiently and effectively assists our Clients with i) Hong Kong company registration ii) government license registration iii) Hong Kong banking considerations iv) immigration solutions and staff hiring strategies and v) office-space rental solutions:

Advantages of Hong Kong company registration

HK has been ranked as the world’s freest economy by the Heritage Foundation. Additionally, Hong Kong has also been ranked as the 2nd best place in the world to start a new business. This has essentially been due to the city’s strategic location and the strength of its liberal economic policies which are listed as follows:

Tax

  1. Clients can incorporate a limited company in Hong Kong in one week with a share capital of only US$1. Plus, Healy Consultants will not require our Client to travel to complete the engagement to set up a Hong Kong limited company; 
  2. Clients starting a business in Hong Kong will require only one director and one shareholder. Furthermore, these individuals are not mandated to be residents in the city of HK;
  3. A Hong Kong company formation is legally tax exempt if the entity has no customers and no suppliers within the city;
  4. For resident companies, the corporate tax rate is among the lowest in Asia at 16.5%;
  5. Setting up an offshore Hong Kong company formation is an excellent way to boost global profits as there are no withholding taxes, sales tax, VAT, import and export taxes and capital gains tax levied on the profits;
  6. A Hong Kong company formation benefits from 34 international double tax treaties that the government has signed to minimize withholding tax on payments abroad.
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Business environment

  1. A Hong Kong business setup is an efficient vehicle which faces minimal corruption, restrictions, and red tape. Consequently, the city is ranked as the 2nd best place in the world to start to a new business;
  2. English is the official business language in HK; all formal company documents are written in both English and Mandarin. As a result, a foreign entrepreneur is likely to find working in the city easy; 
  3. Obtaining bank credit is very easy for a Hong Kong company formation. Consequently, the city is ranked 4th best place in the world to obtain credit for business;
  4. A Hong Kong business setup benefits from the absence of exchange controls to restrict FDIs, currency accounts or repatriation of capital, and earnings;
  5. It is possible for a resident Hong Kong company formation, regardless of nationality of the owner, to invest in every business sector in the city without any government restriction;
  6. Along with Singapore, HK is the leading financial centre in Asia. The city’s International Financial Centre hosts many global financial firms, insurance companies, banks, and asset management firms;
  7. HK is entirely a free economic zone in itself; therefore, a resident LLC is a gift for foreign investors who intend to use the city as a regional distribution base or headquarters;
  8. Being a founding member of the WTO, HK promotes free trade and does not charge tariffs on imports and exports. Furthermore, bureaucratic procedures like licensing and government registration are kept to a minimum;
  9. HK is ranked as the 14th least corrupt place in the world; this makes it easier for foreign investors to depend on the local laws to protect their assets;
  10. Hong Kong company registration portrays a positive image and is, hence, an excellent corporate vehicle to promote the company to global customers, suppliers, investors, venture capitalists, governments, and banks.
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Gateway to Asia

  1. HK is the top choice for product distribution within Asia. The city has the world’s 2nd best infrastructure in the form of a natural deep sea port, busiest cargo airport, a well-developed rail and road system;
  2. The city’s strategic location makes it an ideal business gateway to Asia. A Hong Kong business setup allows foreign entrepreneurs easy access to the massive Chinese, Indian and Australian consumer markets;
  3. HK banks offer multiple currency personal and business bank accounts, including Japanese Yen, Chinese RMB, the Euro, US dollar, and other major currencies;
  4. The city is the historic import and export hub of the Asian continent. A large number of international trading companies and banks are based here which provide excellent trade finance facilities. Furthermore, strength of the city’s shipping and transportation sector attracts the world’s leading freight forwarders and shipping and insurance companies;
  5. HK is deemed as the most business friendly city in Asia. The city’s liberal policies attract both foreign investors and qualified labor from across Asia. Plus, it is the most preferred venue for international exhibitions and conferences.
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Regional headquarters

  1. HK is Asia’s 3rd most liveable city, comprising of a multinational resident population. Plus, the city provides well-developed infrastructure for residential accommodation, tourism, banking, entertainment, and business;
  2. HK boasts highly skilled labor with a literacy rate of 96% and a computer literacy of around 95%. Furthermore, most skilled employees are bilingual in English and either Cantonese or Mandarin;
  3. Employees in a Hong Kong business setup understand the corporate culture in mainland China. Therefore, trading and doing business with the Chinese becomes very easy for HK resident company;
  4. All HK resident firms allow foreign investors to take advantage of legal tax exemption, while at the same time being able to extract funds from regional subsidiaries in the form of dividends, management fees and royalties;
  5. HK is a paradise for high net worth foreign entrepreneurs. The city currently hosts many wealthy Chinese entrepreneurs and is, as a result, synonymous with luxury and houses some of the biggest brands in the world.
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Interview with Aidan Healy on HK offshore company registration
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Disadvantages of Hong Kong company registration

  1. A Hong Kong company formation requires annual submission of audited financial statements to the Inland Revenue Department. Our experts are HK accounting specialists and so, Healy Consultants assists our Clients efficiently and effectively complete this obligation;
  2. Banks in HK have become very selective of their customers due to the very high global demand for their services; consequently, opening a corporate bank account in HK can be a cumbersome process;
  3. To open a corporate bank account, the Client must to travel to HK for the account opening interview;
  4. Following Hong Kong company registration, obtaining an employment visa will be complicated due to stringent due diligence requirements. Foreign entrepreneurs must provide education and work experience credentials;
  5. HK has relatively weak intellectual property laws and protection, especially when compared to Singapore;
  6. Citizens of certain nationalities are not eligible for HK visa for the  purpose of investment. Foreign investors from Afghanistan, Albania, Cambodia, Cuba, Laos, North Korea, Nepal and Vietnam cannot engage in Hong Kong company registration.
  7. Citizens of mainland China are ineligible for incorporating a company in HK unless they are permanent residents of another country or have lived abroad for at least one year;
  8. The quality of conversational English for an average HK employee is relatively poor when compared to the other investment hotspots like Singapore, Malaysia, Dubai and Indonesia;
  9. Effective from March 2014, every private limited company (LLC) Hong Kong business setup must have at least one director who is a natural person, corporate director is not allowed.
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Additional information

Wholly foreign owned entities


Foreign entrepreneurs can create a wholly foreign owned presence in HK by incorporating a branch office or representative office or a limited liability company. Neither Hong Kong business setup requires local individuals to be involved as shareholders or directors.

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Different Hong Kong entities


Healy Consultants will assist our Client engineer the optimum corporate structure to support a Hong Kong business setup. There are several ways of doing business in the city, most popular being the limted liability company (LLC), the free zone company (FZ), and the offshore company.

Limited Liability Company

  • A limited liability Hong Kong company formation is the most common entity used to conduct business within the city; this Hong Kong business setup is allowed to engage in any commercial or industrial activity;
  • The LLC is mandated to appoint i) at least one director and one shareholder and ii) a resident secretary;
  • The incorporation process for this Hong Kong business setup is straight forward with no minimum share capital requirements and no government approval required;
  • All investors must register with the local business registration office within a month from the date of incorporation, so a business registration certificate can be issued.
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Branch Office

  • A HK branch office can conduct trade within the scope set by the parent company. Plus, appropriate licenses must be acquired before the branch office can start its business;
  • A branch office is allowed to invoice local customers, sign local sales contracts and receive income from customers. 
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Representative office

    Hong Kong office

  • A representative office, unlike a branch office, is not permitted to make direct sales within HK. It can only engage in activities such as i) promoting the business of the parent company and ii) market research;
  • A local agent or distributor must be appointed to sell goods and provide services to local companies.
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Table of comparison between different business entities

 
LLC
Branch
Rep Office
Offshore
How long to set the company up?1 week2 weeks2 weeks1 week
How long to open corporate bank account?1 week2 weeks2 weeks3 weeks
Bank signatory must travelYesYesYesYes
Issued share capital requiredUS$100US$1
Is doing business in Hong Kong permitted?YesYesNoNo
Allowed to sign sales contracts with local clientsYesYesNoNo
Allowed to invoice local clientsYesYesNoNo
Corporate tax payable16.5%16.5%0%0%
Corporate bank accountHSBC HKHSBC HKHSBC HKHSBC HK
Can rent local office premisesYesYesYesNo
Tenancy agreement required before incorporation?NoNoYesNo
Allowed to import raw materials?YesYesNoNo
Allowed to export goods?YesYesNoNo
Can the entity hire expatriate staff?YesYesYesNo
Resident director required?NoNoNoNo
Resident shareholder required?NoNoNoNo
Minimum number of directors1001
Minimum number of shareholders1001
Resident company secretaryYesYesYesYes
Individual shareholders allowedYesNoNoYes
Corporate shareholders allowedYesYesYesYes
Corporate director(s) allowedYesNoNoYes
Public register of shareholders and directorsYesYesYesYes
Employment visa feesUS$3,950US$3,950US$3,950US$3,950
How long to get work permit approved3 months3 months3 months3 months
Statutory audit requiredYesYesNoYes
Annual tax return to be submittedYesYesYesYes
Access to double taxation treatiesYesYesYesNo
Estimate of engagement costsUS$6,350US$8,350US$8,150US$6,350
Draft invoice

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The Hong Kong offshore company

  • A Hong Kong offshore company is a non-resident LLC that is legally tax exempt if no business is done in the city. Plus, there is no capital gains tax, no witholding tax, no value added tax, no sales tax, and no accumulated earnings tax levied on the company income;
  • Offshore companies have several uses, including i) international trading ii) holding company iii) shipping company iv) owning real estate v) owning copyright and patents and vi) international consulting services.

Table comparing offshore and onshore companies

 
HK onshore company
HK offshore company
Incorporation period1 week1 week
Shelf companies allowedYesYes
Minimum shareholders11
Minimum directors allowed11
Minimum share capitalUS$1US$1
Corporate tax rate payable16.5%0%
Bearer shares allowedNoNo
Wholly foreign owned companyYesYes
Public register availableYesYes
Annual accounting and tax obligationsYesYes
Corporate directors allowedYesYes
Resident company secretary requiredYesYes
Type of companyLLCLLC
Local bank account allowedYesYes
Can buy local propertyYesNo
Can rent local office premisesYesNo
Can conduct business within HKYesNo
Can apply for immigration visasYesNo
Can hire staffYesNo
Annual license renewalYesYes
Resident director or shareholder requiredNoNo
Allowed to own shares in other HK companiesNoNo
May own yachts registered in HKYesYes
Healy Consultants company incorporation feeUS$2,350US$2,350
Draft invoice

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Accounting and tax considerations

Taxation in HK is relatively simple as it is a low-tax jurisdiction with liberal laws. Healy Consultants assists our Clients fulfill their annual accounting and tax related obligations.

    Hong Kong tax

  1. Annual income tax returns must be filed with Inland Revenue Department on the 1st of April every year. Penalties might be imposed in case of delays;
  2. All resident firms are taxed on their world-wide income while subsidiaries of foreign companies based in the city are taxed on their  income earnt in HK;
  3. HK companies pay no taxes on income earned offshore, even if it is remitted back into the city;
  4. There are no capital gains taxes, no withholding tax, no value added tax, no sales tax, and no accumulated earnings taxes levied on both onshore and offshore companies;
  5. The corporate income tax rate in the city is 16.5%;
  6. Unlike many jurisdictions, losses can be carried forward indefinitely in HK;
  7. A Hong Kong business setup benefits from the city’s DTAs which provide double taxation relief when dealing with countries like Germany, Singapore, UK, USA etc.;
  8. Personal income tax is subject to the same territorial principle as corporate tax, with income earned outside of HK being tax exempt. There are 4 different brackets for tax rates:                                                      
    Income bracket (HK$)
    Tax rate
    Under 40,0002%
    40,000 – 80,0007%
    80,000 – 120,00012%
    120,00017%
  9. To support a Hong Kong business setup, Healy Consultants Compliance Department performs the following:
    • Documenting and implementing accounting procedures;
    • Implementing financial accounting software;
    • Preparing financial accounting records;
    • Preparing forecasts, budgets and performing sensitivity analysis.

Fees

company registration fees

 
 
LLC
Branch
Rep Office
1.Average Engagement costsUS$6,350US$8,350US$8,150
2.Draft Invoice

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Timelines

The average Hong Kong company registration engagement period is 6 weeks as outlined below:

company registration engagement period timeline

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Compliance considerations

Healy Consultants Compliance Department assists our Clients efficiently and completely discharge their legal and tax obligations.

  1. According to the Companies Act, an offshore Hong Kong company formation must have at least one director and one shareholder above the age of 18 years;
  2. The details of all shareholders and director(s) of a Hong Kong company formation must be made available for public viewing. The business address of the company must also be readily available;
  3. Annual audited financial statements must be submitted to the Inland Revenue Department. Healy Consultants assists our Clients efficiently and effectively complete this annual statutory obligation following Hong Kong company formation;
  4. A private offshore Hong Kong company formation is required to maintain both a local registered address and a resident secretary;
  5. Each time a change occurs in the particulars of the company or to its officers, the change must be lodged with the companies registry;
  6. As of 2014, a Hong Kong business setup is required to have at least one director who is a natural person. A corporate director can no longer be the sole director of a company;
  7. Company information such as capital structure and shareholder and director details are publicly available through the Companies Registry. This means less privacy for shareholders, but increases transparency of doing business in the city;
  8. Healy Consultants provides our Clients with company de-registration service in Hong Kong. Please note that our fee for this service is US $2,450 and the process takes a minimum of 6 months.

Recruitment in HK

  • Recruitment of foreign labor requires the employer to justify that the locals have not bee denied the work opprtuntiy. The foreign employee is expected, but not required, to have professional and educational qualifications relevant to the position;
  • Residents of mainland China, Taiwan and Macau will require additional documentation when applying for an employment visa, such as copies of identity cards and copies of the applicant’s household registration;
  • When employing local or foreign workers, employers must make sure to stay compliant with the 2010 Employment Ordinance. These laws most resemble the English system of labour laws, in terms of employer responsibilities.
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Licensing in HK

Read more about Hong Kong business licenses.

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Hong Kong employment visas

  • Costs of living in HK can be higher than even the western countries. Families, especially, may find the cost of housing and schooling to be high in comparison to their home countries. 
  • HK visa applications require extensive supporting documentation; as a result, migration to the city can be an expensive process. Hence, moving to the city requires detailed research and engaging the assistance of a corporate services firm can be valuable;
  • Healy Consultants assists our Client obtain employment and residence visas from the Immigration Department to allow them to live and work in Hong Kong. We are proud to say that our approval rate is still 100%.
  • Healy Consultants’ fee to assist our Client obtain a work permit is US$3,950;

The two important visa schemes associated with registering a business in HK are:

Entrepreneur visa

  • The Entry for Investment visa is an employment pass best suited for foreigners who wish to work in a Hong Kong company formation;
  • Employment as professionals in HK requires applicants to be well educated and work experience. Employment pass applications are more likely to be successful if the foreign entrepreneurs can show their investment can enhance the economy;
  • Certain nationalities are not eligible for an investment visa. Citizens from Afghanistan, Albania, Cambodia, Cuba, Laos, North Korea, Nepal, and Vietnam are unable to self-employed in the city.
  • Also, citizens of mainland China cannot be self-employed unless they are permanent residents of another country or have been living abroad for at least one year;
  • A successful ‘Entry for investment’ application requires the following:
    • Application submitted by the sponsoring company;
    • Proof of academic qualifications and relevant working experience;
    • Investment plan including details of proposed business activities and monetary amounts for 2 years;
    • Copy of Hong Kong company registration and other particulars (e.g. IRD registration certificate);
    • Copy of applicant’s passport and payment of fees.
  • The approval process takes around 4 weeks and the visa granted will be valid for a 1-year period. The visa may be extended, on the condition that the eligibility criteria for entry is still being met. Extensions will likely follow the 2-2-3 years pattern.
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Employee visas

Employment as a Professional visa is an employment pass best suited for individuals who wish to work in HK as an employee. The employment visa is split into three categories dependent on the nationality and education of the applicant:

  • Immigration Arrangements for Non-local Graduates “IANG”
    Non-local graduates refer to individuals who completed full-time studies (Diploma, Degree, Qualification) in recognized HK institutions. Fresh graduates, i.e. applying within 6 months of graduation, are not required to have secured employment prior to applying for this employment pass. Returning graduates, i.e. applying over 6 months post-graduation, must secure employment prior to applying for a work permit.
  • General Employment Policy “GEP”
    This employment pass applies to individuals who are not non-local graduates but are educated, skilled, or have experience which will add-value to HK. The applicant’s education or work experience should be related to the field of employment and there should be a genuine job vacancy with a market value remuneration package.
  • Admission Scheme for Mainland Talents and Professionals “ASMTP”
    This employment pass is specific to mainland Chinese, except those that have been living outside of China for over a year and are eligible for the GEP. Applicants must be educated, skilled or have work experience in a field which will add-value to the economy. Similarly, there should be a real job vacancy and the remuneration package should be around market value. There are no quotas or sector-specific requirements under this scheme.
  • A successful employee visa application requires the following from an applicant:
    • Visa application submitted by the individual;
    • Copy of the employment contract/letter of appointment printed on company letterhead and detailing the position, salary, fringe benefits, and employment periods;
    • Copy of applicant’s passport and payment of fees;
    • Copy of graduation certificate or a transcript of academic records from the degree awarding institution and any relevant work experience;
    • Application for Employing Professionals submitted by the employing company;
    • Copy of the registration of Hong Kong business setup;
    • Copy of the latest audited financial report of the employing company;
    • Documents detailing the background of the employing company, including business activities and mode of operation, amongst other things;
    • Letter of consent from applicant’s present working unit.
  • The approval process takes around 4 weeks and the visa is valid for a 1-year period. The visa may be extended, on the condition that the eligibility criteria for entry is still being met. Extensions will likely follow the 2-2-3 years pattern.
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Migration to Hong Kong


If you and your family want to live and work in Hong Kong, you will probably need help with the relevant and necessary documentation prior to your arrival, as well as some assistance with settling in to your new surroundings.

Healy Consultants offers a Complete Relocation Service for expatriates and their families moving to Hong Kong, and this includes handing all the paperwork for employment visa applications, a process which could be time-consuming and frustrating if you were to attempt it alone.

In addition, whether you are looking for the perfect place to live in Hong Kong, or want a total orientation of this exciting location with trained, experienced consultants who will provide accurate, relevant information on living there, Healy Consultants really can make your move a smooth one.

Our services related to migration to Hong Kong include:

  • Pre-arrival consultation – an essential service including detailed needs analysis by the consultants;
  • Familiarisation programmes – personalized, tailor-made programmes for families, single executives, and couples with no dependants. The programme may include visits to schools, social clubs, shopping areas, banks and health facilities amongst others. Detailed information on topics such as transportation, legal issues, employment recreation and entertainment will be supplied by the consultant during the programme;
  • Home finding – one of the main concerns on arrival in Hong Kong is where to live. Our property consultant will listen to your specific requirements and discuss potential areas and properties before guiding the Client through all stages of arranging unlimited viewing, the lease signing process, connection of all utilities and termination of lease.
  • Cross cultural training – these customized and condensed programmes provide expatriate employees and their families with the core skills and knowledge to complete a successful overseas assignment. By becoming culturally competent, expatriates will be able to maximise their experiences and contributions, and in return, will ensure a worthwhile investment made by the company.
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Corporate banking options

International Banks in HK
Local Banks in HK
HSBCBank of East Asia
Standard chartered Dah Sing Bank
CitibankHang Seng Bank

Hong Kong company registration banking

Trade finance


Hong Kong company registration finance

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Hong Kong banking

  • Since, HK is not perceived as a tax haven, it is not on the list of black listed destinations such as the OECD ‘blacklist’ and the FATF blacklist. Furthermore, HK is not a member of the OECD; HK resident banks, consequently, are not obliged to share customer information with international governments;
  • HK banks offer the highest levels of corporate bank account facilities including multiple currencies, internet banking, telephone banking, checking accounts, savings accounts, debit and credit cards, fixed term deposits, and wealth management services;
  • Refer to the table below to view different banking options.

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Success tips when doing business in Hong Kong

  1. Small business and family-owned business are very common in HK. Generally, in these businesses the most senior members will have the final say. So, make it a point to acknowledge and respect them;
  2. Any negative remarks or comments should always be made in private so as not to insult the other person, be it a business partner or an employee;
  3. Fee negotiation can be a hotspot for potential conflict; so attention should be given to ensure that not to offend a potential business partner;
  4. Hong Kong business

  5. Physical contract is rare when doing business in HK. Common practices in the US and Europe such as a firm handshake, a pat on the back or putting your hand on someone’s shoulder should be avoided;
  6. The exchange of business cards is an important aspect of Chinese business culture. It is considered professional to exchange business cards at the end of every official meeting. Plus, make sure to at least read the card before pocketing it;
  7. Government agencies play an important role in doing business in HK. Foreign entrepreneurs will have to deal with government authorities regularly, hence it is important to be patient when dealing with them;
  8. Not all local companies will well-versed with international trade; so, we encourage our Clients to consistently use and sign contracts of service;
  9. Entertainment is an important part of doing business in HK. It is common for new partner alliances or new business wins to be celebrated over a traditional Chinese banquet lunch, or dinner. Traditional Chinese banquets will usually be an eight course meal and guests will be seated on a round the table;
  10. A smile is like a handshake for the Chinese. In order to avoid getting off on the wrong foot, it is advisable to not look to serious when dealing with your suppliers and Clients;
  11. Make friends with your local Clients and suppliers. Unlike westerners, the Chinese like to make small talk and exchange pleasantries before conducting business.
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Did you know about Hong Kong?

  1. The name “Hong Kong” comes from the Cantonese word which literally means Fragrant Harbor;
  2. HK remained under the British control from 1842 till 1997;
  3. With a population of slightly over 7 million people, the city has a high population density of 6540 people per square kilometre;
  4. In 2012, HK was described as the world’s most livable city;
  5. HK has the highest number of skyscrapers in the world i.e. nearly double the next city on the list – New York city;
  6. HK has more Royal royces’ per person than any other city in the world;
  7. Honk Kong’s Tsing Ma bridge is the longest road and rail suspension bridge in the world;
  8. Hong Kong’s Lamma insland only has a population of 6000 but is still houses people of 60 different nationalities;
  9. The Peak Tramway is one of the steepest and oldest in the world; it has been in service since 1888;
  10. HK is the home to kung fu legends like Bruce Lee, Jackie Chan and Jet Li;
  11. HK also has a Disney Land, which is the 3rd one outside USA.
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Useful links

External readings

External videos


Contact us

For additional information on Hong Kong company formation, you can email us at email@healyconsultants.com or phone us in Hong Kong at (+852) 8331 1911. Address: Room 1505B, 15/F Fortress Tower, 250 Kings Road, Hong Kong.

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