General
	Type of entity:		Private Limited
	Type of law:		Common
	Shelf company availability:		Yes
	Our time to establish a new company:		7 days
	Minimum government fees (excluding taxation):		US$320
	Corporate taxation:		Nil on Foreign Profits
	Double taxation treaty access:		China - Corporate and Personal Income Tax. Belgium,Thailand, Luxembourg - dividends, interest and royalties. Other Countries - for shipping and aviation.
	Share capital or equivalent
	Standard currency:		HK$
	Permitted currencies:		Any
	Minimum paid up:		HK$1
	Usual authorised:		HK$1,000
	Directors or Managers
	Minimum number:		One
	Local required:		No
	Publicly accessible records:		Yes
	Location of meetings:		Anywhere
	Members
	Minimum number:		One
	Publicly accessible records:		Yes
	Location of meetings:		Anywhere
	Company Secretary
	Required:		Yes
	Local or qualified:		Local
	Accounts
	Requirement to prepare:		Yes
	Audit requirements:		Yes
	Requirement to file accounts:		Yes
	Publicly accessible accounts:		No
	Other
	Requirement to file annual return:		Yes
	Change in domicile permitted:		No

Hong Kong is on the south east coast of China and consists of a large number of islands and a part of the mainland totalling approximately 1,064 sq km. On 1 July 1997 all of Hong Kong reverted from British Control back to China and became a Special Administration Region 'SAR' within the People's Republic of China (PRC).

» Population

Approximately 7 million.

» Political Structure

Hong Kong elects its own legislature and maintains its own court structure.

» The Future of Hong Kong

Under the 'one country - two systems' philosophy, the SAR has executive, legislative and independent judicial power. The capitalist system, legal structure and lifestyle remain unchanged. Hong Kong remains a free port with a free flow of capital and a freely convertible Hong Kong dollar.

With China pushing forward with the modernisation of its own economy, the PRC has expressed the wish that Hong Kong should assist in this endeavour. It has stated that its future development will be based on market led reforms with socialist characteristics and this has led to the opening up of its economy to foreign investments. It is widely recognised that Hong Kong is and will continue to be a significant gateway to China.

Following the signing of the main parts of the Closer Economic Partnership Arrangement (CEPA), Hong Kong and the Mainland signed the Arrangement on 29th September 2003. Starting from 1st January 2004, the Arrangement is to ensure Hong Kong is "economically interlocked" with the Mainland and that smaller Hong Kong companies will benefit from the opening-up and liberalisation on the Mainland beyond China's commitments in its WTO accession. CEPA has come into the third phase, called CEPA III. After implementation of 3 phrases, CEPA provides tariff-free access for 100% products of Hong Kong origin (except prohibited articles) imported into the Mainland upon applications by local manufacturers and upon the CEPA rules of origin being agreed and met. On trade in services, the Mainland has agreed to provide preferential treatment to Hong Kong service suppliers in 27 service areas by taking various forms, including relaxation in equity share restrictions, reduction in the entry thresholds such as registered capital and business turnover, as well as relaxation in restrictions over geographical location and business scope. Looking further ahead, CEPA will be an open and developing platform; Hong Kong will continue to engage the mainland authorities on further liberalisation of trade in goods and services in the future.

» Infrastructure And Economy

Hong Kong has excellent communication facilities and a major new international airport. Hong Kong is the leading South East Asian centre for both finance and commerce and ranks as the world's third largest financial centre after New York and London. The Hong Kong Stock Exchange is the most active in Asia outside Japan.

» Language

The official languages are English and Chinese, with English being used in the commercial and political context and Cantonese Chinese used widely in industry and domestic trade.

» Currency

The Hong Kong Dollar, which is officially pegged to the US Dollar. (approx: 1US$ = HK$7.74 to HK$7.82)

» Exchange Control

None.

» Type of Law

Common Law based on English Common Law.

» Principal Corporate Legalisation

Companies Ordinance (Cap 32).

» Type of Company for International Trade and Investment

Private Company limited by Shares.

» Procedure to Incorporate

Submission of Memorandum and Articles of Association and a prescribed form with the Hong Kong Companies Registry. A Notice of Situation of Registered Office is also required to be filed within fourteen days of the date of incorporation.

» Restrictions on Trading

Cannot undertake banking or insurance activities or solicit funds from or sell its shares to the Public.

» Powers of Company

A Hong Kong Company has all the powers of a natural person.

» Language of Legislation and Corporate Documents

Chinese and English.

» Registered Office Required

Yes, must be maintained in Hong Kong.

» Name Approval Required

It is not possible to reserve a name. It is essential to check that there is no similar or identical name on the register, which would prevent the company being incorporated.

» Shelf Companies Available

Yes.

» Time to Incorporate

Within 7 to 10 working days from the submission of documentation.

» Name Restrictions

A name that is similar to or identical to an existing company. A name that constitutes a criminal offence or is otherwise contrary to the public interest. A name that gives the impression of which it is connected with the Government of PRC, the Government of HKSAR or any departments of either Governments.

» Names Requiring Consent or Licence

Building society, Chamber of Commerce, co-operative, Kaifong, mass transit, municipal, savings, tourist association, trust, trustee, underground railway, bank, insurance, assurance, reinsurance, etc.

» Suffixes to Denote Limited Liability

Limited.

» Disclosure of Beneficial Ownership to Authorities

No.

» Authorised and Issued Share Capital

The usual authorised share capital is HK$1,000. The minimum issued capital is one share of par value.

» Classes of Shares Permitted

Ordinary shares, preference shares, redeemable shares and shares with or without voting rights.

» Taxation

Hong Kong is one of the few countries in the world that tax on a territorial basis. Many countries levy tax on a different basis and they tax the world-wide profits of a business, including profits derived from an offshore source. Hong Kong profits tax is ONLY charged on profits derived from a trade, profession or business carried on in Hong Kong. Consequently, this means that a company which carries on a business in Hong Kong, but derives profits from another place, is not required to pay tax in Hong Kong on those profits. Hong Kong sourced income is currently subject to a rate of taxation of 16.5 per cent. There is no tax in Hong Kong on capital gains, dividends and interest earned.

The principle of Hong Kong income tax is that it is a tax on income that has its source in Hong Kong rather than a tax based on residence. Income sourced elsewhere, even remitted to Hong Kong, is not subject to Hong Kong profits tax at all. Consequently, if a Hong Kong company's trading or business activities are based outside Hong Kong no taxation will be levied.

The factor that determines the locality of profits from trading in goods and commodities is generally the place where the contracts for purchase and sale are effected. 'Effected' does not only mean that the contracts are legally executed. It also covers the negotiation, conclusion and execution of the terms of the contracts.

If a business earns commission by securing buyers for products or by securing suppliers of products required by customers, the activity which gives rise to the commission income is the arrangement of the business to be transacted between the principals. The source of the income is the place where the activities of the commission agent are performed. If such activities are performed through an office in Hong Kong, the income has a source in Hong Kong.

Certain sums, like royalties, paid or payable to non-resident persons for use of or right to use certain intellectual property are subject to withholding tax. The payer who claims deduction for the use of the intellectual property against its assessable income is required to withold a prescribed percentage from the payment while that recipient is not subject to Hong Kong profits tax. The prescribed percentage is 4.95% on the gross payment if the payer and the recipient are not related, but 16.5% if the payer and recipient are related. The recipients of the royalties who are tax residents of Belgium, Thailand or Luxembourg enjoy the respective treaty rates.

» Double Taxation Agreements

Hong Kong has arrangement with a number of jurisdictions for double taxation relief of shipping or airline income. It has also comprehensive double tax agreements with Belgium, Thailand and Luxembourg respectively to relieve taxation on income, for instance, dividends, interest and royalties. The Hong Kong Inland Revenue Department allows a deduction for foreign tax paid on a turnover basis in respect of income which is also subject to tax in Hong Kong. Therefore, businesses operating in Hong Kong do not generally have problems with double taxation of income.

» Licence Fees

The Business Registration Fee, currently HK$2,450, is due and payable within one month of the date of incorporation and then annually on the anniversary of the first payment. (Special tax concession arranged by the HKSAR for the period from 1st April 2008 to 31st March 2009; the business registration fee of each company is HK$450).

» Financial Statement Requirements

A Hong Kong company must keep accounting records, which may be kept at the registered office address or elsewhere at the discretion of the directors. Every company must appoint an auditor who must be a member of the Hong Kong Society of Accountants and hold a practicing certificate. Although there is no requirement to file accounts with the Registrar, there is a requirement to file accounts with the tax authorities.

» Directors

The minimum number of directors is one, who may be natural persons or bodies corporate. They may be of any nationality, and need not be resident in Hong Kong.

» Company Secretary

A Hong Kong company must appoint a company secretary, who may be a natural person or a body corporate, but the company secretary must be resident in Hong Kong.

» Shareholders

The minimum number of shareholders is one.

	Word	PDF
Hong Kong Fact Sheet	98KB	74KB
Enquiry Form	108KB	61KB
Shelf List	71KB
Order Forms	326KB	165KB
	Excel
Comparison Chart	114KB

	Zip
Companies Ordinance	378KB

Disclaimer

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. OCRA Worldwide does not accept any responsibility, legal or otherwise, for any errors or omission.