Healy Consultants has been helping Clients to register their businesses in Hong Kong for over a decade. As part of our service, we assist with i) Hong Kong company incorporation ii) government license registration iii) opening corporate bank accounts iv) hiring strategies and visa applications and v) office space rental solutions.
Advantages of Hong Kong company registration
The Heritage Foundation has ranked Hong Kong as the world’s freest economy. The World Bank takes a similar view, having listed Hong Kong as the 2nd best place in the world to start a new business. This has essentially been due to the city’s strategic location, its close ties with the Chinese economy and the strength of its liberal economic policies. Examples of these business-friendly policies include:
- Clients can register a private limited company in Hong Kong in one week with a share capital of only 1 Hong Kong Dollar. The share capital may be denominated in any currency, so Clients may use US Dollars, GBP, euros or any other freely-convertible currency that they prefer;
- Clients starting a business in Hong Kong require only one director and one shareholder. Furthermore, these individuals do not need to be residents of the city and there is no requirement for them to travel in order to incorporate the company;
- All Hong Kong companies require a company secretary to manage the statutory filings and administration. The company secretary must be resident in the special administrative region and may be either an individual or a company. Healy Consultants provides company secretarial services to our Clients registering companies in Hong Kong with us;
- No physical premises are required to set up a company in Hong Kong. A registered address is therefore sufficient for company registration.
- Readymade companies are permitted in Hong Kong, allowing businesses to commence operations without having to wait for completion the company formation process. Buy a Hong Kong shelf company that already has a bank account with one of our turnkey solutions.
- A Hong Kong company is legally tax exempt if the entity has no customers and no suppliers within the city. This legitimate tax advantage makes the city attractive to entrepreneurs and established businesses;
- For resident companies, the corporate tax rate is among the lowest in Asia at 16.5%;
- Setting up an Hong Kong offshore company is an excellent way to boost global profits as there is no withholding tax, sales tax, VAT, import and export tax or capital gains tax;
- A business based in Hong Kong benefits from 34 international double tax treaties that the government has signed to minimize withholding tax on payments abroad.
In addition to its business-friendly policies, Hong Kong has a number of other advantageous attributes that make it a great place in which to do business.
- A Hong Kong business is an efficient vehicle that 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;
- English is the official business language in Hong Kong; all formal company documents are written in both English and Chinese. As a result, a foreign entrepreneur is likely to find that working in the city is easy;
- Obtaining bank credit is relatively simple in Hong Kong. Consequently, the city is ranked as 4th best place in the world to obtain credit for business;
- A Hong Kong business benefits from the absence of exchange controls to restrict foreign direct investments, multi-currency accounts or the repatriation of capital and earnings. This monetary flexibility and the city’s status as a global financial centre make it a great location for treasury accounts, cash management accounts and other corporate banking services;
- It is possible for a resident company, regardless of nationality of its owners, to invest in every business sector in the city without any government restriction;
- Along with Singapore, Hong Kong 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;
- Long Term Investment – setting up a company in Hong Kong is a secure long-term investment. Because Hong Kong follows globally recognized Organisation for Economic Cooperation and Development (OECD) standards; Hong Kong is a reputable, secure and an effective jurisdiction for long-term investment planning;
- Hong Kong is itself a free economic zone (it is officially a part of China known as the Hong Kong Special Administrative Region). Therefore, a resident company is a great business vehicle for foreign investors who need a regional distribution base or headquarters;
- Being a founding member of the World Trade Organization, Hong Kong 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;
- The local government is also 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;
- As a former British colony, Hong Kong’s legal system and many of its laws are based on English common law. The legal system is therefore stable and familiar to foreign investors;
- Hong Kong has a great reputation as a business and financial centre, meaning that a company based there is often seen as reputable by global customers, suppliers, investors, venture capitalists, governments, and banks.
Gateway to China
- As a Special Administrative Region (SAR) of China, Hong Kong enjoys a special relationship with one of the world’s fastest-growing economies. It is estimated that the SAR has access to almost 450 million consumers across nine provinces in southern China, which has led many organisations and individuals to view a Hong Kong business as the optimum way to serve the mainland Chinese market;
- According to the Hong Kong Trade Development Council, the city is one of the largest sources of investment into China;
- HK has excellent air, rail and road links to the booming southern provinces of China;
- On June 29, 2003, Hong Kong and China signed the Closer Economic Partnership Arrangement (CEPA), a free trade agreement granting the city’s manufacturers and service suppliers preferential access to the Chinese market. The agreement is now in its seventh phase, in which China agrees to abolish tariffs on all products of Hong Kong origin (to date there are more than 1,600 products). For more details on how the CEPA can benefit your company, visit the CEPA Website.
Gateway to Asia
- Hong Kong 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, the world’s busiest cargo airport, and a well-developed rail and road system;
- The city’s strategic location makes it an ideal business gateway to Asia. A Hong Kong corporate entity allows foreign entrepreneurs easy access to the massive Chinese, Indian and Australian consumer markets;
- 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 has resulted in the availability of excellent trade finance facilities. Furthermore, the strength of the city’s shipping and transportation sector attracts the world’s leading freight forwarders, shipping companies and insurers;
- The city is deemed as the most business friendly city in Asia. The city’s liberal policies, vibrant business environment and low taxes attract both foreign investors and qualified labor from across Asia;
- Hong Kong will soon have a Free Trade Agreement with ASEAN, which will help Hong Kong based businesses trade without tariffs with a market of 600 million people.
- Hong Kong is Asia’s 6th most liveable city, with a blossoming multinational population. The city provides well-developed infrastructure for residential accommodation, tourism, banking, entertainment and business;
- It also boasts highly-skilled labor with a literacy rate of 96% and computer literacy around 95%. Furthermore, most skilled employees are bilingual in English and either Cantonese or Mandarin. As a result, many multi-national companies set up subsidiaries in Hong Kong;
- Employees in Hong Kong understand the corporate culture in mainland China. Therefore, trading and doing business with the Chinese becomes very easy for a resident company;
- Setting up a Hong Kong business allows 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;
- Hong Kong is a paradise for high net worth individuals. The city currently hosts many wealthy Chinese and foreign entrepreneurs and is consequently synonymous with luxury, housing some of the biggest brands in the world.
|Interview with Aidan Healy on HK business registration|
Disadvantages of Hong Kong company registration
- Our Clients must submit annual audited financial statements to the Inland Revenue Department. Healy Consultants’ accounting specialists can assist with performing this work and reducing the burden of this obligation;
- Hong Kong banks have become very selective of their customers due to the very high global demand for their services; consequently, opening a corporate bank account in the city can be a cumbersome process;
- To open a corporate bank account, the Client must to travel to Hong Kong for the account opening interview;
- Following company formation in Hong Kong, obtaining an employment visa will be complicated due to high skill and experience thresholds. Foreign entrepreneurs must provide education and work experience credentials;
- Hong Kong has relatively weak intellectual property laws and protection, especially when compared to Singapore. However, looser protection of ideas has led to a proliferation of innovation in Hong Kong and wider China, particularly the nearby Shenzhen;
- Citizens of certain nationalities are not eligible for a Hong Kong visa for the purpose of investment. Foreign investors from Afghanistan, Albania, Cambodia, Cuba, Laos, North Korea, Nepal and Vietnam cannot register their businesses in Hong Kong;
- Citizens of the People’s Republic of China are not allowed to register a company in Hong Kong unless they are permanent residents of another country or have lived abroad for at least one year;
- The quality of conversational English for an average local employee is relatively poor when compared to the other investment hotspots like Singapore, Malaysia, Dubai and Indonesia;
- Effective from March 2014, at least one of the directors of a Hong Kong company must be a natural person. As long as one individual is appointed as a director, corporate directors are still permitted.
Why invest in Hong Kong?
Frequently asked questions
How many directors are required for starting a business in Hong Kong?Only 1 director is required to complete company registration in Hong Kong.
How many shareholders are required to establish a company in Hong Kong?Only 1 shareholder is required for business registration in Hong Kong.
Is it mandatory to have a resident director or shareholder for company establishment in Hong Kong?No. A resident director is not necessary to start a Hong Kong company.
I want to know how to register a business in Hong Kong. What is the process?For business registration, our Client will be required to i) search for a company name ii) sign the company setup forms and obtain a certificate of incorporation iii) register for tax and social security and iv) make corporate seal and stamp.
Healy Consultants’ experts are Hong Kong company registration specialists and will assist our Client at every step.
My company wants to establish a subsidiary in Hong Kong. What services do you offer to help businesses get set up?Yes. Our Hong Kong business registration services include i) company formation ii) business license registration iii) immigration solutions iv) employment strategies v) corporate bank account opening vi) office rental/ virtual office setup vii) offshore company setup and viii) tax planning.