Hong Kong
Hong Kong is located in eastern Asia, on the southeast coast of the People’s Republic of China, facing the South China Sea.
BACKGROUND INFORMATION
Hong Kong is a small territory of about 1,104 square kilometers location in the southern tip of China and with an estimated population of 7 million people. It was under sovereignty of the British before 1997. After the handover to China on the 1st July, 1997, Hong Kong becomes a Special Administrative Region of the People’s Republic of China and it is still a stable and vibrant financial centre under China’s principal of “One Country, Two Systems” concept. With its geographical vantage, Hong Kong is recognized as the world’s busiest deep water container port. With the close relationship with China, Hong Kong becomes a major gateway to China for investment, trade, finance and travel.
TYPES OF COMPANIES
There are three main business entities in Hong Kong, namely Sole Proprietorship, Partnership and Private Limited Company. The most common entity is the private company limited by shares, which is a business entity registered under the Companies Ordinance, Chapter 32. A Hong Kong limited company exists as a separate legal entity. It is benefit to the owners that they have limit liability and their personal assets are protected from liabilities of their business. They are not liable for the debts and losses of the company beyond the amount of their share capital. Except doing business, a company can also hold property for own use or for investment purposes.
INCORPORATION
Firstly, it is necessary to check with the Companies Registry to ensure no company already exists with your chosen name. If the proposed name is the same or similar to an existing registered name, the Registrar of Companies has power to reject the application. Issuing of Certificate of Incorporation is currently taking about five working days.
Please note that, subject to certain exceptions, all companies registered which are limited by shares or by guarantee must have as the last word of their name, the word “limited”.
SHELF/READY-MADE COMPANIES
As an alternative to choosing a name and incorporating a company from scratch, it is possible to purchase a shelf/ready-made company. This is particularly useful where a company is needed urgently. We keep a stock of shelf companies at all times which can be set up in the next day. The name of such a company can easily be changed at a later date if required.
STRUCTURE
Private limited companies incorporated in Hong Kong are required by law to have at least one shareholder, one director, local registered office, a local company secretary and a local designated representative. The director(s), shareholder(s) & secretary can be either companies or individuals with no limitation of nationality but only the secretary must be resident in Hong Kong or a Hong Kong limited company.
A company’s designated representative must be either a shareholder, director who is a natural person resident in Hong Kong or, alternatively, an accounting professional, a legal professional or a person licensed to carry on a business as trust or company service provider.
ABOLITION OF PAR VALUE OF SHARES
Nominal value (also known as “par value”) of shares is the minimum price at which shares can generally be issued. The new Companies Ordinance (Cap. 622) (“the new CO”) adopts a mandatory system of no-par for all local companies having a share capital and retires the concept of par value for all shares. This is in line with international trends to provide companies with greater flexibility in structuring their share capital.
There is no essential difference between a share of no par value and one having a par value. Both represent a share, being a fraction of the equity, but par value share has attached to it a fixed face value, and share without par value does not.
DIRECTOR AND SHAREHOLDER
Limited company registered in Hong Kong is permitted to have sole director and sole shareholder. A director and shareholder can be the same or different person. There is no restriction on their nationality but director must attain the age of 18 years.
COMPANY SECRETARY REQUIREMENT
Every limited company must have a local company secretary but sole director cannot act as both capacities. If the secretary is an individual, ordinarily reside in Hong Kong; if a body corporate, have its registered office located in Hong Kong.
DESIGNATED REPRESENTATIVE REQUIREMENT
A company must designate at least one person as its representative to provide assistance relating to the company’s significant controllers register to a law enforcement officer.
A company’s designated representative must be either a shareholder, director who is a natural person resident in Hong Kong or, alternatively, an accounting professional, a legal professional or a person licensed to carry on a business as trust or company service provider.
REGISTERED OFFICE REQUIREMENT
Each limited company incorporated in Hong Kong must have a local registered office. ‘Care of’ address and post office box number are not acceptable. It is usually the place where the company is required to keep its statutory books and records. The registered office of a company need not however be the place where the company carries on business. We can maintain our office as the registered office of a company should that be required.
BANK ACCOUNTS
It is possible for a company to open various bank accounts in Hong Kong or elsewhere. We will assist you on the account opening and a whole set of legalization documents required by bank can be arranged.
ACCOUNTS AND FINANCIAL STATEMENTS
Companies are required to keep proper books of accounts and appoint auditor in Hong Kong. We can provide accounting, auditing services and act as tax representative to our clients.
Although there is no requirement for private limited companies to file, as a matter of public record, their financial statements with the Companies Registry, financial statements are required to be filed with the Inland Revenue Department and should be completed annually.
REQUIREMENT TO HOLD ANNUAL GENERAL MEETING AND ANNUAL RETURNN AND ANNUAL GENERAL MEETING
Every limited company is required to hold in an Annual General Meeting in respect of each financial year of the company, instead of in each calendar year.
In the case of a private company or a company limited by guarantee, 9 months after the end of its accounting reference period by reference to which the financial year is to be determined.
As part of our secretarial services, we attend to the preparation of the Minutes of which contain the various resolutions to be passed at the annual general meeting and prepare the annual return.
The company is required to file the annual return annually to the Registrar of Companies within forty-two days of the anniversary of the date of incorporation. The annual return must be signed by a director or the secretary of the company.
BUSINESS REGISTRATION
Every person, partnership, body corporate which carries on any form of activity for the purpose of doing business in Hong Kong (including a club) is required to apply to the Commissioner of Inland Revenue for a Business Registration Certificate.
The application for a Business Registration Certificate must be made within one month from the commencement of the business. When setting up a company, we will arrange the first year’s Business Registration Certificate for you.
The details which are required to be set out in the application form mainly relate to the particulars of the director and a simple description of the nature of business carried on by the company.
Business Registration Certificate must be renewed yearly and displayed at the registered office of the company. Duplicate must be obtained for any branch office.
OUR SERVICES
We have some stock of “Ready-made” companies that are immediately available for purchase and are pleased also to incorporate a company with client’s proposed name. All companies are provided with our comprehensive company kit, include the following:
* Certificate of Incorporation
* Business Registration Certificate
* Incorporation Form
* 1 Statutory Book
* Memorandum & Articles of Association
* A Corporate Seal
* A Pre-ink Stamp
* Share Certificates
FEES
Panocean Secretarial Group will be happy to provide you with a schedule of our current fees for the company set up and provision of company secretary/designated representative/registered office upon request.
These are only the general guidelines and they do not constitute any legal liability for inaccurate information mentioned above.
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