For over a decade, Healy Consultants has efficiently and effectively assisted our local and international Clients complete company registration in Hong Kong company and launch their Asian business. Hong Kong company registration is an appealing, tax-efficient corporate vehicle for international entrepreneurs wishing to access the dynamic Asian economies including Hong Kong and China.
The following information will help your Firm determine whether registering a company in Hong Kong is the most appropriate corporate solution to fulfill your international business objectives:
A Hong Kong company is legally tax exempt if the entity has no customers and no suppliers in Hong Kong. In other words, international income is legally tax exempt!
Hong Kong business registration portrays a positive image and is, hence, an excellent corporate vehicle to promote your company to customers, suppliers, investors, venture capitalists, governments and banks.
Resident Hong Kong companies with local income suffer one of the lowest corporate tax rates in Asia, at 16.5%.
It is not necessary to rent a physical office as part of Hong Kong company formation. Healy Consultants offers full virtual office services in Hong Kong, from short-term HK office rental to daily telephone answering and mail forwarding services.
Hong Kong company incorporation documents are bilingual, English and Chinese. These documents make doing business in China a little easier, particularly when supported with a HSBC Hong Kong multi-currency corporate bank account, allowing China renminbi currency transactions.
Moving a company into the PRC is much easier after registering a company in Hong Kong, as Chinese officials are familiar with Hong Kong corporate documents, leading to greater efficiency.
A person can gain "eternal inhabitant's rights" in HK after living there for 7 years.
Following business registration in Hong Kong, annual audited financial statements must be submitted to the Hong Kong Inland Revenue Department. Healy Consultants assists our clients efficiently and effectively complete this annual statutory obligation.
Because of global demand for Asia business setup, it is becoming more difficult to open a Hong Kong corporate bank account. The Hong Kong banks are more choosy about the customers they accept.
Company information such as capital structure, shareholder and director details, and the like are publicly available through the Hong Kong Companies Registry. This means less privacy for shareholders, but increases transparency of doing business in Hong Kong.
Prior to incorporating their Hong Kong company, our client a) settles Healy Consultants' fees b) signs and returns our Client Engagement Letter and c) provides us all the required due diligence documents.
Hong Kong business registration begins with our client and Healy Consultants agreeing the company name and the optimum corporate structure including shareholders and directors. Under Hong Kong company law, a minimum of just one shareholder is required.
Healy Consultants liaises with the Hong Kong Registrar of Companies to complete Hong Kong company set up.
Healy Consultants drafts a detailed Hong Kong business formation engagement project plan for our client, including corporate bank account opening steps. This engagement project plans maps out by week each step to engagement completion, optimizing transparency and setting Client expectations.
After the corporate structure is agreed with our Client, Healy Consultants will prepare incorporation forms for client signature and courier return. Thereafter Healy Consultants legally incorporates the Hong Kong company and immediately emails to our Client i) the public profile for the company and ii) the certificate of incorporation.
After Hong Kong incorporation, Healy Consultants assists our client open a corporate bank account. The majority of our clients choose either a HSBC or Standard Chartered bank account.
Where possible, Healy Consultants bank account opening team will liaise with the bank to prevent our Client having to travel for an account opening interview.
Following engagement completion, Healy Consultants couriers a full company kit to our client, including original Hong Kong corporate documents, unopened bank correspondence and a client feedback survey.
To support the Hong Kong business registration, Healy Consultants provides our client a Hong Kong business address for invoicing purposes. Additionally, many clients request telephone, fax and email support for their company following entity establishment. Alternatively, our client may request a full Hong Kong virtual office, or rent office space at Healy Consultants.
Healy Consultants assists clients to find business premises in Hong Kong and recruit local and expatriate staff by placing advertising campaigns in local publications, such as the South China Morning Post.
Migration to Hong Kong can be an expensive and complicated process. Some costs associated with living in Hong Kong are very high compared to western countries. Families especially, may find the cost of housing and schooling to be high compared to their home country. Hence moving to Hong Kong requires detailed research and engaging the assistance of a corporate services firm can be valuable.
Hong Kong Immigration offers visa options for a variety of reasons including travel, study, residence as a dependent, permanent employment, business/investment and working holidays.
The two important schemes associated with registering a business in HK are:
Entry for Investment
This Hong Kong employment pass is best suited for foreigners who wish to work in Hong Kong in a company which they have incorporated in Hong Kong, ie Entrepreneurs.
This Hong Kong employment pass follows the same requirements as the General Employment Policy as per "Entry for Employment as Professionals", however may be positively favoured next to simple professional employment for its investment and entrepreneurial nature.
As a general requirement to qualify for the Hong Kong employment pass, applicants should be well educated, with a first class degree or equivalent, or any documented skills and work experience. As cases are judged individually, a lower level of education can sometimes be compensated for by a significant amount of relevant work experience.
Hong Kong employment pass applications are positively favoured if the entrepreneurial investment is seen to enhance or provide relevant contribution to the Hong Kong economy.
Mainland Chinese residents are not eligible for "Entry for Investment" Hong Kong employment pass. This includes individuals from mainland China, Macau SAR and HKSAR. Mainland Chinese nationals who have resided overseas for at least a year before application may qualify. This implies living outside of mainland China, Macau SAR and HKSAR.
It is important to note that nationals of Afghanistan, Albania, Cambodia, Cuba, Laos, Democratic People's Republic of Korea, Nepal and Vietnam are not eligible for this Hong Kong employment pass.
Employment as Professional
This type of Hong Kong employment pass is best suited for individuals who wish to work in Hong Kong in an existing professional firm, ie Employees.
The Hong Kong 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 Hong Kong institutions. Fresh graduates, i.e. applying within 6 months of graduation, are not required to have secured employment prior to applying for this Hong Kong employment pass. Returning graduates, i.e. applying over 6 months post-graduation, must secure employment prior to applying for a work permit. The employment secured by returning graduates must be of a level appropriate to graduates, with the corresponding salary, in order to be considered.
General Employment Policy "GEP". This Hong Kong employment pass applies to individuals who are not non-local graduates but are educated, skilled or have experience in a field relevant to the Hong Kong economy which will add-value to Hong Kong. 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 Hong Kong 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. As with the GEP for foreigners, mainland Chinese applicants are favoured for the ASMTP if they are educated, skilled or have work experience in a field relevant to the Hong Kong economy which will add-value to Hong Kong. Similarly, there should be a real job vacancy and the remuneration package should be around market value. A candidate who does not have any criminal record that is serious and can pose a threat to Hong Kong residents has more chances of beign favourably considered.
It should be noted that each application for Entry for Employment as professionals is judged on a case basis, with no quotas or sector-specific requirements.
To receive the best internet banking and customer service, Healy Consultants recommends international banks HSBC, Standard Chartered and Citibank for most corporate bank account solutions. Local banks can be used where appropriate for the Hong Kong business.
Healy Consultants Compliance Team can open an international corporate bank account within 3 weeks from the date your Hong Kong Company is registered. There is a 50% probability our Client will not need to travel to meet the Hong Kong Bank. Through our special business relationship with Citibank or HSBC or Standard Chartered Bank, Healy Consultants will open your corporate Bank account with or without your presence.
Hong Kong banks will provide finance to Hong Kong registered companies provided the following conditions are met i) good Business-plan ii) availability of security iii) experience of business owners iii) last 3 years audited financial statements iv) realistic feasibility study v) project strength and weaknesses analysis (SWOT).
To support their new business in Hong Kong, Healy Consultants assist clients with Trade finance tasks including i) bank guarantees ii) letters of credit iii) finance against trust receipt iv) document against payment and against acceptance.
Securing corporate finance in the form of a loan, overdraft or simply preferential credit terms are other corporate banking related aspects of doing business in Hong Kong.
Hong Kong 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 table below to view different banking options in Hong Kong.
Tax planning in Hong Kong is relatively straightforward compared with most jurisdictions, since it is a low-tax jurisdiction with relatively simple tax laws. Taxes are levied only on income earned in Hong Kong. Income earned offshore is not taxed, even if it is remitted back into Hong Kong.
There are no capital gains taxes, no withholding tax, no value added tax, no sales tax, no accumulated earnings taxes.
The corporate tax rate on income derived in Hong Kong is 16.5%.
Similarly, Hong Kong personal income tax is conducted in an effortless fashion and also subject to the same territorial principle. The personal tax year is from the 1st of April - 31st of March. There are 4 different brackets for Hong Kong tax rates:
HKD$40,000 is liable for 2% taxation.
HKD$40,000 - HKD$80,000 is liable for 7% taxation.
HKD$80,000 - HKD$120,000 is liable for 12% taxation.
Any sum greater than HKD$120,000 is liable for 17% taxation.
Unlike many jurisdictions, losses can be carried forward indefinitely in Hong Kong.
Healy Consultants Compliance Department assists our Clients to efficiently and completely discharge the annual accounting and auditing obligations of their Hong Kong company through the following: i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records and iv) preparing forecasts, budgets and sensitivity analysis to better manage financial obligations and ease the process of reporting to the Hong Kong accounting authorities.
Hong Kong is a global hub for business. Small business and family-owned business are very common in Chinese jurisdictions. The head of these types of companies are often involved in all decisions so it is beneficial to involve the head of the company in business dealings. It is also an act of respect to acknowledge and include the elder, senior members, of the company.
Physical contact is rare when doing business in Hong Kong. Common practices in the US and Europe such a firm handshake, a pat on the back or putting your hand on someone's shoulder should be avoided.
The exchange of business cards is an important aspect of Chinese business culture and doing business in Hong Kong. A business card should be given to everyone attending the meeting. When handing a business card to someone it should be presented with both hands with the front of the card facing the recipient. When receiving a business card, taking time to look and comment about the card shows respect. It is advisable to have one side of your business card in Chinese language if doing business in Hong Kong is expected to be a frequent occurrence.
Government agencies play an important role in doing business in Hong Kong, like all countries. All businesses deal with government agencies on a regular basis. This is where foreigners setting up a company in Hong Kong should exercise restraint and be patient as much as possible as Government authorities would always have the final say in any matter.
As not all local Hong Kong companies are well-versed with international trade, we encourage our Clients to consistently use and sign contracts of service.
Entertaining is an important part of doing business in Hong Kong. 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 table.
Healy Consultants offers a range of Hong Kong business startup services to support Hong Kong company registration including accounting and taxation, IT support and obtaining corporate finance.
Most clients require a Hong Kong virtual office for invoicing purposes, and Healy Consultants offers a range of tailored packages.
Grants and other funding programs are available from the Hong Kong government. There are grants and other assistance available in many categories, including developing your business, innovation and exporting. Healy Consultants assists our Clients locate the grants and assistance programs most relevant to your business.
Listing on the Hong Kong Stock Exchange (HKEX) is a corporate advisory service provided by Healy Consultants. This process can include preparing feasibility studies, ensuring compliance with HKEX regulations, advice on corporate governance, tax planning and more. For more information, visit our Stock Exchange listing services webpage.
Entrepreneurs completing business registration in Hong Kong can benefit from Hong Kong's numerous Intellectual Property laws. Healy Consultants will assist our Clients with trademark and patent registration.
Healy Consultants offers a comprehensive range of Hong Kong research services including i) industrial or business analysis ii) economic and political overview iii) competitor analysis iv) customer analysis v) regulation analysis vi) market entry strategies vii) business partner matching.
Healy Consultants offers a complete relocation service for expatriates and their families migrating to Hong Kong, and this includes handing all the paperwork for immigration applications. Our firms HK migration services include: i) Pre-arrival consultation, ii) Familiarisation with key locations and facilities within HK, iii) Assistance in finding a suitable home and iv) Cross cultural training.
After Hong Kong Company Registration, Healy Consultants can assist in designing, implementing and critically evaluating i) management and financial control systems ii) internal controls iii) policies and procedures iv) accounting, inventory, payroll, costing, budgetary control and management information systems.
Our lawyers advise on a wide range of commercial arrangements required by our client’s Hong Kong company in their day to day operations, taking into account the nature of the business and the commercial and legal risks. Our services range from reviewing standard form agreements to drafting and assisting with the negotiation of complex bespoke commercial arrangements
Regulatory advice, strategy and compliance, corporate licensing and government tendering
We have extensive experience of providing advice on all types of commercial agency arrangements which ease the process of doing business in Hong Kong such as franchise, distribution, agency and commission arrangements and on the impact of local laws on such arrangements, including advising on the effect of these arrangements being registered with the authorities.
After incorporating in Hong Kong, we have advised both our clients and their international partners on a large number of joint ventures in throughout the region which require a detailed knowledge of the local licensing and regulatory environment.
In its 2012 World Competitiveness Yearbook, the Switzerland-based IMD positively ranks Hong Kong as the world’s most competitive economy. The ranking takes into account factors including economic performance, government efficiency, business efficiency and infrastructure.
Transparency International, a measure of corruption amongst public officials and politicians, positively ranks Hong Kong as the world’s 14th least corrupt country in the 2012 Corruption Perceptions Index.
It is ranked the world's freest economy in the Heritage Foundation's 2013 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets.
According to the World Bank's Doing Business 2012 Survey, Hong Kong is the world's 2nd easiest place to do business. The survey measures factors including company formation procedures, time, cost and minimum capital required to start a business.
Hong Kong is one of the world's most expensive cities, ranking 9th in Mercer Human Resources global Cost of Living Survey. As a services and export-based economy, Hong Kong is vulnerable to i) high global oil and food prices and ii) the health of the global economy.