Basic Requirements for Company Formation in Hong Kong

To establish a company in Hong Kong, businesses must meet several key requirements:

Company Name

• The name must be unique and approved by the Hong Kong Companies Registry.
• It should include “Limited” (Ltd) to indicate a limited liability company.

Shareholders

• A minimum of one shareholder is required, with a maximum of 50.
• Shareholders can be individuals or corporate entities, with no nationality restrictions.

Directors

• At least one director must be appointed.
• Directors can be of any nationality and do not need to reside in Hong Kong.
• At least one director must be an individual (not a corporate entity).

Company Secretary

• Every company must appoint a company secretary, who can be an individual or a corporate entity.
• If an individual, the secretary must be a Hong Kong resident; if a corporate entity, it must have a registered office in Hong Kong.

Registered Office Address

• The company must maintain a registered office in Hong Kong.
• A physical address is required (P.O. Box addresses are not accepted).

Minimum Capital Requirement

• No minimum capital requirement applies.
• Companies can be incorporated with as little as HKD 1 in share capital.

Steps for Setting Up a Company in Hong Kong

Step 1: Choose a Company Name

• Ensure the name is unique and available for registration with the Companies Registry.
• Check compliance with Hong Kong business naming regulations.

Step 2: Prepare Required Documents

• Identification proof (passport or Hong Kong Identity Card) and proof of address for directors and shareholders.
• Signed consent form for the company secretary.
• Memorandum and Articles of Association outlining company governance.
• Completed company registration form.

Step 3: Register the Company

• Submit the required documents to the Companies Registry.
• Registration can be completed online or in person.
• Upon approval, the company receives a Certificate of Incorporation, confirming its legal existence.

Step 4: Obtain a Business Registration Certificate

• After incorporation, businesses must apply for a Business Registration Certificate from the Inland Revenue Department (IRD).
• The certificate must be renewed annually.

Taxation in Hong Kong

Hong Kong offers a competitive tax environment with a simple tax structure:

• Corporate Tax:
  
  • 8.25% on the first HKD 2 million of profits.
  • 16.5% on profits exceeding HKD 2 million.
• No VAT or Sales Tax: Simplifies tax compliance.
• Double Taxation Agreements (DTAs): Agreements with multiple countries reduce the risk of being taxed twice on the same income.

Corporate Governance and Compliance

Annual General Meeting (AGM)

• Companies must hold an AGM to discuss financial statements, elect directors, and engage shareholders.

Audit and Financial Statements

• All Hong Kong companies must appoint an independent auditor and prepare annual financial statements.

Statutory Filings

• Annual returns must be submitted to the Companies Registry to maintain an active status.
• Companies must maintain financial records for seven years for tax and audit purposes.

Ongoing Compliance and Regulatory Requirements

After company incorporation, businesses must comply with several ongoing regulatory obligations:

Annual Returns

• Required to update company details, including shareholders and directors.
• Submitted to the Companies Registry annually.

Tax Filing

• Companies must file annual tax returns with the Inland Revenue Department (IRD).
• Includes audited financial statements.

Business Registration Renewal

• The Business Registration Certificate must be renewed annually to avoid penalties