Incorporating a Hong Kong Entity

Every company is required to appoint a Hong Kong-resident company secretary, who may be a natural person or a corporate body. Hong Kong company ordinance prohibits the sole director to be the company secretary.

When incorporating a Hong Kong entity, every company is required to have a registered office in the territory to comply with Hong Kong company ordinance.

The standard authorised share capital is HK$10,000. An increase in the authorised share capital above this amount incurs government fees. The minimum issued capital is one share of HK$1 each.

A business registration fee, currently US$335 (HK$2,600), is payable to the Hong Kong Companies Registry within one month of incorporating a Hong Kong entity, and annually thereafter on the anniversary of the incorporation.

The following particulars are made available for public viewing i) Memorandum & Articles of Association ii) certificate of incorporation iii) particulars of the directors, company secretary and registered office iv) share capital structure and shareholding information.

To comply with Hong Kong company ordinance, all limited Hong Kong companies must undergo an annual audit conducted by a professional auditing company, after incorporating a Hong Kong entity. Audited financial statements must be submitted to the Hong Kong Inland Revenue Department, together with a profits tax return. Healy Consultants' Hong Kong tax planning strategy experts can provide support to ensure efficient tax filing.

Healy Consultants' offers a range of business start up services in Hong Kong, including:

i) Assistance in opening an international corporate bank account. This is one of our most popular business start up services in Hong Kong, offering our clients a world-class multi-currency corporate bank account with full Internet banking;

ii) Accounting and taxation support is another one of Healy Consultants' core business start up services in Hong Kong. These include i) corporate structuring ii) minimising withholding tax iii) tax returns and financial statements iv) payroll and investments;

iii) Virtual office services are popular business start up services in Hong Kong for our international clients. After incorporating a Hong Kong entity, we provide services including i) office space to clients ii) a business address for invoicing purposes iii) phone, fax and email support and iv) global call centre support;

iv) Another of our business start up services in Hong Kong include human resources support, such as employment and entrepreneur visas, payroll support, staff recruitment and a local business address details for invoicing purposes, together with telephone, fax and email support;

v) Healy Consultants marketing services prove vital for many of our clients. These include services such as business website building; search engine advertising; designing stationery and logos; market research and media advertising;

vi) Healy Consultants provides a service vital to some entrepreneurs by assisting clients to obtain corporate finance, trade finance and establish merchant accounts to support their company;

vii) Healy Consultants business startup services in Hong Kong also include IT support, including hardware purchasing and configuration; office network configuration; business website design and maintenance and server maintenance;

viii) Other consulting services offered by Healy Consultants include merger and acquisition advice; business due diligence; internal audit support; and business process re-engineering;

xv) Finally, Healy Consultants business start up services in Hong Kong may also include Asia real estate purchases, including assistance in obtaining international mortgages; economic analyses; property valuation and locating tenants.

i) What are the tax implications for Hong Kong companies doing business in China? A sound Hong Kong tax planning strategy should note that Hong Kong companies which do not have a fixed place of business in China will only pay income taxes on profits earned to the Hong Kong government, not to the Chinese government. Also, Hong Kong companies which hold a minimum 25% shareholding in a China mainland company pay 5% on any dividends they receive on their investments. Meanwhile, the tax rate for individual investors who receive dividends from their equity investments on the Chinese mainland is 10%;

ii) Are any tax exemptions or tax incentives available in Hong Kong? Hong Kong tax planning strategy should indicate both the exemptions and restrictions. For example, there are no capital gains taxes; withholding taxes; sales taxes; Goods and Services Tax (GST); annual net worth taxes; accumulated earnings taxes or profits tax on foreign real estate. Consolidated group accounting, whereby the profits of one company in a group are set off against the losses of another group company to reduce total profit liable to profits tax, is not available in Hong Kong.

iii) Can the Hong Kong company receive foreign-sourced income without being subject to local corporation tax? A properly-structured Hong Kong company is key to Hong Kong tax planning strategy so that no tax on profits sourced outside Hong Kong is paid. The corporate tax rate on income derived in Hong Kong is 17.5% on assessable profits;

iv) What is the best place to locate the offshore bank account to ensure that the structure is as tax-efficient as possible? Offshore-sourced income is not taxed in Hong Kong even if it remitted into the country unlike many other jurisdictions. An important aspect of Hong Kong tax planning strategy is choosing the best bank;

v) To be able to draw up the optimum Hong Kong tax planning strategy for our clients, it is important Healy Consultants has a good understanding of your business and we know your objectives. In this respect, we encourage clients to discuss via phone the different Hong Kong tax planning strategies available.