Hong Kong Company Formation – An Overview
The advantages of Hong Kong company formation are many. This Asian financial centre provides excellent business opportunities to foreigners coming from all over the world. There are also many corporations domiciled in the local area, making it easier for them to adopt local business practices.
One of the most significant advantages of Hongkong company formation is the lack of paperwork needed to start a company. All that is required is to provide information on the address of its registered office and its nominee director or shareholder, and some other basic requirements. It could be the simplest method of establishing an international company…! On the other hand, an individual may prefer to incorporate his small-scale trade through Hong Kong limited companies rather than going through the complex procedures involved in forming a corporation.
Another advantage of Hong Kong company formation is that one needs not necessarily employ an international lawyer’s services when incorporating a company in Hong Kong. Companies domiciled in the local jurisdiction are not obliged to appoint an agent for their transactional activities in other countries. It allows them to operate their businesses regardless of where they are in the world. A typical offshore agent will charge an hourly rate and may work only part-time and require a retainer, an expense that the company may bear.
Many people think that company formation in Hong Kong is a straightforward procedure, but this is not true. Registration of a company is not an easy job, even if one opts for the over-the-counter companies. There are a few things that one needs to consider before proceeding with the registration of a company. Forming a company in Hong Kong requires the consent of the Secretary of State. The company must have a director and shareholders who must be residents in Hong Kong.
Forming a Hong Kong company also requires a copy of the directors’ authority nominated by the shareholders. The document does not need to be a complicated one. The simplest form is that offered by the government. However, there are some things that the shareholders should consider before taking the necessary steps for the registration of a company in Hong Kong.
First, the directors need to designate a legal representative office in Hong Kong. This legal representative office is responsible for official correspondence and trade matters between the company and the rest of the world. This office is also responsible for ensuring that no company bank accounts are opened in Hong Kong without the relevant authorisation. Besides, it is the representative office that makes sure that the shareholders meet all the requirements for company registration in Hong Kong. Failure to comply could result in heavy penalties.
Another requirement for a Hong Kong company is to have a share capital of at least two hundred thousand dollars. It means that only those companies with a share capital of more than two hundred thousand dollars will be allowed to set up a limited liability company in Hong Kong. If the share capital requirement is not fulfilled, the company will be deemed to have no taxable income. It will be a double taxation situation for the company. However, if the business is more than two hundred thousand dollars, it will be exempted from this double taxation provision.
hongkong company formation