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Hong Kong Company Formation

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Form a company in Hong Kong and bank account in 2024

Table of Contents

Want to set up a company in Hong Kong? As a globally recognized hub for international trade and finance, Hong Kong is a fantastic economic zone for premium commerce and service provision. 

It boasts an established government, advanced infrastructure, a thriving capital market, highly educated skilled labor forces, and a favorable tax system. Hong Kong serves as an exceptional platform and a perfect gateway for entrepreneurs and enterprises to trade, invoice, recruit, and transfer funds in and out of Asian economies with minimal capital investments from investors.

While no permanent residency is required to register a Hong Kong company, physical presence is needed to open a local company bank account.

Here, we’ll guide small to medium-sized companies through company registration in Hong Kong and deal with bank accounts, taxes, and ongoing compliances.

Before Getting Started

When managing global expansions in Hong Kong, identify the formation and structure of your core needs. Then, understand the rules and regulations of your targeted country of operations. It is crucial to evaluate the advantages and disadvantages of your preferred business entity based on your company objectives.

Before finalizing a decision, answer the following questions.

  • What are your short and long-term requirements?
  • How big is your company?
  • How much capital is required to start your business?
  • Do you need any investors?
  • Which third-party capital is interested in your company?
  • How much cost, time, and other resources are needed to get things moving?
  • How will tax laws affect the ownership of a business vehicle?

Standard Online Requirements in Hong Kong

Since the Hong Kong jurisdiction law discourages the use of bureaucratic procedures, Limited Liability Companies (LLC) can now be registered online and strictly follow this streamlined chain of systems.

  • The amount of permitted share capital is not restricted to limited liability firms.
  • When contributing to a company’s starting capital, investors must pay at least one share at a nominal value of one Hong Kong dollar.
  • Establishing a Limited company, requires at least one shareholder of any nationality.
  • One director must be selected in a limited liability business; this person may be of any nationality but cannot be another legal entity.
  • It is necessary to hire a secretary for your company, He/She must be a Chinese citizen. Any contrary candidates must be a permanent Hong Kong resident or from a Hong Kong-based company.
  • An official Hong Kong location is required for incorporation.
  • Any legal or commercial paperwork in Hong Kong may be written in English as it is widely used.
  • There are no rules under the Hong Kong law for resembling your business name to different Hong Kong Limited companies. E.g. It is acceptable if your company name directly translates from the Chinese version as long as both versions are shown.
  • Under the common law in Hong Kong, it is legally permitted to employ nominee directors and shareholders.
  • Initial processes may take up to a month, however, it is possible to shorten it if necessary.

Existing Types of Companies in Hong Kong

Every company in Hong Kong is segregated into different types. Let’s examine each of them in-depth:

  • Private Limited Corporation

Being the most common legal entity in Hong Kong, this company setup is considered private if its articles of organization impose minimal constraints on its operations.

  1. To become a corporation, the group must have at least 50 members.
  2. Members are restricted from selling or giving away shares in the company.
  3. Invitation is not allowed for subscription of any company shares.

A board of directors and firm secretary must be hired by the private limited business. However, their nationality and residency do not impact the establishment of your private limited business.

  • Company Limited By Guarantee

Ideally for non-governmental organizations. As a result of the firm’s articles of association, a limit is implemented on the distribution of the company’s surplus to shareholders.

In a company limited by guarantee, the concept of share capital is absent. The members’ liability is limited to the extent of their contributions. Company directors are required to take ownership of their ethical and legal obligations.

  • Public Limited Company

When a company is not privately held, it is open to the public. In other words, their articles of incorporation have no restrictions. This comes in 2 forms: A publicly traded company or a private company.

In comparison to a private corporation, a public limited company is subject to additional regulations and reporting requirements under the Companies Ordinance. In order to be listed, a private firm must first become a public corporation.

  • Sole Proprietorship

A sole proprietorship is where a single individual bears all legal and financial responsibilities for their own company. Being a sole proprietor may seem the least complicated, but it bears a high risk.

Firstly, you do not have any protection over your possessions and there are no limits to your personal liabilities as a business owner. As for the usual skepticism from investors over sole proprietorships, it hinders your ability to generate cash flow and perform company expansions.

  • Limited Partnership

A partnership firm consists of both limited partners and general partners. Even if your general partners have been relocated outside of Hong Kong, no requirements are needed to fill any local management positions.

While general partners have unlimited responsibility for the company’s obligations, the limited partner is only liable for the amount he contributed to the company’s formation.

Hence, general partners have a significant say in the company’s direction and are named as beneficiaries of its will. In contrast, limited partners, have little to no voting rights in proportion to their contributions.

  • General Partnership

2 or more individuals who share the same vision for a collective professional advancement may opt for a partnership business structure. This Hong Kong company registration is quick and easy.

Every member in a general partnership is personally accountable for company obligations and jointly shares accountability for the collective partnership’s actions. Establishing a general partnership in Hong Kong is simple as there are no mandatory registration procedures or other regulations.