Requirements for Foreigner in Hong Kong Company Formation:

As per Hong Kong laws and regulations regarding company registration. Any foreigner or outside residents of any country except the countries that the Hong Kong government department bans to do any business in Hong Kong. Anyone regarded as a foreigner who wants to register an offshore limited liability company in Hong Kong must follow and consider the following points:

• There is an obligation and law that refrain any foreigner from becoming the sole director or sole shareholder of a Hong Kong company. There are no residents requirements.
• Due to flexible company laws, there is no compulsion and need for a person’s physical presence at company registration. But it may be required when opening a bank account. It depends on the chosen bank, whether or not it requires a physical presence of an individual at the opening of a bank account.
• Any foreigner who doesn’t want to shift or move to Hong Kong can operate and function their offshore Hong Kong company from overseas.

Required Documents for Company Registration:

If you are interested in opening a Hong Kong limited liability company, you should require certain documents and paperwork to open a limited company. Normally they consist of the following documents. Always check thoroughly and fulfill all the requirements before submitting your limited company documents to the concerned department.

Article of Association: The first document required for opening a private company in Hong Kong is an article of association. It is usually prepared and provided by the firm that provides you with professional services and assists with incorporating the company.

Incorporation Form: After AOP, a duly completed incorporation form is required that have the following information:

• A Company name per Hong Kong company’s name rules and regulations.
• Registered Office Address, it can be any physical address in Hong Kong.
• A brief introduction of the company and its business activities.
• Details and Particulars of company shareholders, directors, and company secretary.
• Roles and liability of members.
• Details of share capital registered on incorporation.
• Amount and number of shares taken up by subscribers

For Foreigners and Non-Resident Shareholders and Directors: If the director and company shareholders belong to another country or are foreign residents, then they need to submit the following documents as proof:

• Copy of their passport
• Oversees/foreign residential address proof.

For Hong Kong Residents: If the company director and shareholders are local and are residents of Hong Kong, then they need to submit the following document along with other company registration documents:

• A copy of the Hong Kong identity card.
• A copy of residential address proof.

For Corporate Shareholder and Directors: If the company has corporate shareholders and directors rather than individuals, the following documents are required for submission.

• Copy of parent company registration documents, such as Certificate of incorporation and Article of Association.

Note: In the case of non-English documents, you should provide an English version of such documents to the concerned department.

Importance of Hiring a Professional firm for Company registration:

There are a lot of benefits for hiring or taking services of a professional services firm. The firm takes responsibility and is familiar with necessary procedures and formalities from the beginning until the registration process. Though company registration seems easy, it still requires some professional assistance, especially if you are a non-Hong Kong resident. Hiring them saves both your time and resources. It’s not a one-time engagement; good and reputable firms believe in long-term relationships and assist when required. A good firm will do the following:

• It collects all the necessary incorporation details and identification documents from you.
• Secure the company’s name as per your choice, and prepare all the required incorporation documents (including article of Association AOP) that are later filed with the company registrar. All these documents require your signature.
• After filling out the incorporation form and other related documents to the company registrar’s office, they will obtain the certificate of incorporation.
• The firm will obtain a business registration certificate from the inland revenue department.
• They will also assist the client in opening a bank account.
• A good firm will also do some small but necessary things like:
• Company seal and stamp.
• Share certificate and share register
• Make Statutory books.
• They will also further assist you in annual tax fillings, help you in filling visa business licenses, and longing statutory compliance.

Hong Kong limited company is one the best and most commonly used business entity for SMEs and trading companies in Hong Kong. Due to its attractive and unique features like separate legal entities. For understanding it better, let’s explore its other features, benefits, and advantages:

Advantages, benefits, and features of Private Limited Company:

Easy to Set up a Company:

It’s an easy and simple process to set up a private limited company in Hong Kong. Normally it takes 24 hours or less to register a company through a registered agent. You can use any company formation service provider to open an enterprise on your behalf by submitting all the necessary and required documents.

Company Hierarchy and Shareholders:

A Hong Kong limited liability company doesn’t require any long list of members and shareholders. This type of business entity is set up with a minimum of 1 member and 50 shareholders. One natural person as a director can be a foreigner or Hong Kong resident. One secretary should be Hong Kong local and is responsible for maintaining accounts and statutory books.

Separate Legal Status:

A private company has its own distinctive business entity status and is a separate legal entity. Therefore it can acquire dispose of assets, take part and enter contracts, sue, and be sued under its name.

Limited Liability:

The limited liability provides extra protection to shareholders by securing their assets. It means that if the company runs into loss, the personal assets of shareholders of this company are not at risk. They can sell their company shares to clear their debt without affecting their assets.

Easy Transfer of ownership:

It is easy and simple to transfer or sell the shares of a private company. You can sell it as a whole or sell it partially; whatever the requirement is, it provides great ease while transferring the ownership.

Strong Public Impression:

In Hong Kong, a private company is considered more credible than any other type of business entity because of its stable business structure and other prominent characteristics. It is easier to raise capital for the private company than other entities; banks and other financial institutions also prefer it and take it seriously.

Tax Benefits:

A Hong Kong private company enjoys a favorable tax regime. The company’s first 2 million HKD of taxable income is taxed at 8.5%, and the remaining amount is taxed as 16.5%. You need to pay almost half the tax percentage for your company’s first 2 million Hong Kong dollars. Moreover, suppose you show and prove that the income earned by your company is generated by doing business outside the HongKong. In that case, that income will be completely exempted from corporate income tax.

Disadvantages of Private Limited Liability Company in Hong Kong:

Every picture has two sides; one must see both sides before reaching any point. As discussed above, the many advantages of opening a private limited company in Hong Kong have disadvantages. Any business person or entrepreneur understands that with greater benefits comes greater challenges. However, these are not as serious as they may sound, but still, they may be a concern for many.

Compliance Requirements:

As per Hong Kong company laws, there are many requirements and compliance that need to comply and are compulsory to follow. A few of them are:

• Annual general meetings between directors, shareholders, and company secretary.
• Filling annual returns with companies registry and filing annual tax returns with the inland revenue department.
• Other small requirements can be a hassle in the absence of a company secretary or a good consulting firm.

Information Disclosure:

It may sound odd to some investors or entrepreneurs, but it is mandatory for Hong Kong limited company to disclose its member’s information to be made available to the public. It includes the director’s name, shareholder details, company secretary’s name, and nature of business.

Complex Dissolution Procedure:

In case of company dissolution, it has to go through a complex winding-up process due to different debts in order situations that are compulsory to be taken care of before closing it down.

How to Open a corporate Bank Account in Hong Kong:

You can open a corporate bank account of a Hong Kong private company in any other country. Still, it is recommended to open it on the territory where the company is registered. If you are using any reliable online payment gateway like PayPal and stripe, it can also serve the purpose provided it can operate well in the respective country.

IIn Hong Kong opening a corporate bank account requires the presence of the company director. Some banks also offer interviews over a phone call for opening an account; whatever the scenario is, banks need a few mandatory documents for account opening. They are as follow:

• Account Application form of the particular bank.
• Company/corporate registration documents.
• Copies of passports of foreign members or shareholders.
• A bank reference letter of any designated person.
• A bank financial statement of the company’s designated personnel.
• Proof of business, such as invoices, contracts, or agreements

The banks generally require the above list of documents. Other additional documents are needed that depend and differ from bank to bank. All the provided papers/documents need to be in English. It is advisable to properly provide all the documents to avoid rejection of account opening. Banks works on the principle of transpierces and expect the same from its customer.

Opening an online bank account:

It’s a general perception that one can not open a bank account in Hong Kong without their physical presence. Still, in reality, overseas customers or foreigners can open a bank account in Hong Kong using several possible ways. The requirement of in-person visit create difficulties and problems for many non-Hong Kong residents; they can open a bank account with the following solution:

Branch Application:

Overseas or foreigners can use this option of bank application to open a bank account in Hong Kong. It minimizes the complexity and hassle of documents requirement. This option is provided by international banks that have a foothold in hong kong as well as overseas like HSBC. It is an easy way to complete and visit the bank branch in your own country and fulfill all the required documents before entering or visiting Hong Kong. One thing to note here is that every bank has its policy and requirements; please consult with your concerned bank and service provider and get all things sorted out.

Digital Account Opening:

Digital banking solutions make it possible to open an account using modern digital technology and verification methods; they replace the old school registration process that needs to open a bank account. Many reliable and recommended fintech companies offer quality digital account opening services such as Wise or Airwallex. Many banks in Hong Kong allow businesses to open their corporate bank account without a physical presence in Hong Kong. But it depends and varies from bank to bank; it is advisable to seek assistance from any professional service provider to tackle and handle all these problems regarding opening a bank account.

Open an offshore bank account for Hong Kong Companies:

If you plan to open a company in Hong Kong, you may also know about the problems in opening a bank account. To minimize this problem and provide a hassle-free experience, you can open a company corporate bank account outside Hong Kong. It is acceptable and allowed by the Hong Kong government. Other countries and banks welcomed cooperated accounts of Hong Kong companies due to their good reputation.