FAQ of Hong Kong company formation

Bizformation acts as your reliable partner by offering a skillful combination of diverse professionals and full range of company formation and support services. We provide comprehensive Hong Kong company formation and registration along with its related corporate services to clients. In order to help clients searching a quick answer, we prepared a list of frequently asked questions (FAQ) about Hong Kong company formation and registry below. If you found specific questions which we did not cover below or wish to get more information, please contact us.

The questions covered are:

Q1) What is the requirement to set up a private Hong Kong limited company?
Q2) What are the procedures if I want to incorporate a Hong Kong company?
Q3) What is the difference between a shareholder and a director?
Q4) What is the legal company secretary?
Q5) What is the restriction on the name of the Hong Kong company ?
Q6) Can we set up a Hong Kong private limited company without the wording of “Limited” or “Ltd.” ?
Q7) Can a Hong Kong limited company use a simplified Chinese name?
Q8) What is the restriction on the business scope of Hong Kong company?
Q9) Is it any paid-up capital requirement for Hong Kong limited company? What is it?
Q10) Is the debt obligation based on registered or issued shares?
Q11) What services will be provided for the Hong Kong company registration?
Q12) How can I open a bank account after I register a Hong Kong company?
Q13) When can the new Hong Kong company be found in the record of Department of the Hong Kong Companies Registry?
Q14) What fee should I pay annually after Hong Kong company formation?
Q15): Who should responsible for the accounting and auditing after the company setup?
Q16): What kind of taxes should be paid by a Hong Kong company?
Q17) Is there customs duties for import or export items?
Q18) Is any department responsible for issuing invoice ?
Q19) Can I deregister a Hong Kong company?

Answer Section:

Q1) What is the requirement to set up a private Hong Kong limited company?
Ans: It requires at least one director and shareholder to set up a Hong Kong company. The shareholder and director may be the same person who is a passpord / ID card holder with age of 18 years old or above. He/she can be a mainland or foreign citizen. It also needs to have a registered address in Hong Kong and a legal company secretary. If you do not have a Hong Kong registered address or legal company secretary, we can provide the registered address and act as your company secretary.

Q2) What are the procedures if I want to incorporate a Hong Kong company?
Ans: It is the fastest method to incorporate a Hong Kong company is to buy a ready-made shell company and rename latter. However, it is more efficient to set up Hong Kong company after the introduction of the company setup in electronic form. After you may fill in our forms to authorise us to set up the company on your behalf, it may take about one day to complete the registration. You only need to
choose the company’s name, the registered capital (no minimum share capital requirement but the general minimum registered capital is HKD10,000 and it can be increased according to your actual needs without funding in advance) and provide the shareholders and directors information with the ID card or passport copies via email. Then, we will prepare all the registration documents for you, apply for Certificate of Incorporation and Business Registration, and prepare company kit including Memorandum and Articles of Association, share certificates, company seal, company chop, and a set of documents for bank account opening.

Q3) What is the difference between a shareholder and a director?
Ans: A shareholder is an investor of the company and a director is elected by the shareholders to manage the company. Chairman of the Board of Directors is the person responsible. Effective from February 13, 2004, a private limited Hong Kong comany can has only one shareholder and one director and the shareholder and director can be the same person.

Q4) What is the legal company secretary?
Ans: Appointing a company secretary is mandatory. The company secretary can be an individual or a corporate responsible for maintaining statutory books and company records to ensure the company’s compliance with all statutory requirements. A sole director or shareholder cannot act as company secretary. For an individual, the company secretary must be a Hong Kong resident. For a corporate, she must have its registered office or a place of business in Hong Kong. We may act as the company secretary if necessary.

Q5) What is the restriction on the name of the Hong Kong company ?
Ans: It is free to use different company name but must end with the word “Limited” or its short form. Each company name should be unique and no repetition. Both English and Chinese Name are acceptable but cannot be mixed. Wording such as “Trust”, “Chamber of Commerce”, “Bureau”, “Cooperative”, “Bank”, etc. can not be used unless approved by Registrar of Companies.

Q6) Can we set up a Hong Kong private limited company without the wording of “Limited” or “Ltd.” ?
Ans: No, the private limited company name must contain the wording of “Limited” or “Ltd.” to show to the public the shareholders with limited liability of debts.

Q7) Can a Hong Kong limited company use a simplified Chinese name?
Ans: It can not use simplified Chinese characters in the company name. For chinese company name, you must use the Traditional Chinese.

Q8) What is the restriction on the business scope of Hong Kong company?
Ans: There is no restriction on the business scope of Hong Kong company. You can operate business of any nature, such as financial investments, healthcare, shipping transportation, import and export trade, wholesale and retail, real estate, construction, information networks, garment and textile, tourism, culture and publishing, etc.

Q9) Is it any paid-up capital requirement for Hong Kong limited company? What is it?
Ans: There is no minimum registered capital of Hong Kong limited company but the normal registered capital is HKD10,000 and the minimum paid-up capital is HKD1.

Q10) Is the debt obligation based on registered or issued shares?
Ans: Hong Kong limited company is a commitment to a debt obligation by issued shares.

Q11) What services will be provided for the Hong Kong company registration?
Ans: For the newly-established Hong Kong limited company, the general registered capital is HKD10,000 (excluding the capital levy fee of HK1 per registered capital HKD1,000). The services and documentation include:

1) check and verify the company name chosen
2) apply for the Certificate of Incorporation
3) publish 20 company Memorandum & Articles
4) company share certificates, chop & common seal, company statutory record and company kit, etc.
5) apply for Business Registration Certificate
6) prepare the minutes of the directors to open a bank account
7) prepare the registration documentations
8) register Companies Registry Form
9) update director, company secretary, member registry
10) issue share certificates to shareholders
11) prepare a certified copy of documents for opening bank account

Q12) How can I open a bank account after I register a Hong Kong company?
Ans: The procedure and the kind of documents required by each bank are somehow different. Many banks require all directors of the company to visit the bank to open a bank account but some are not. You can choose to open your bank account in Hong Kong or in your country of foreign banks. If the account is opened in Hong Kong, it is called the local account while referred as offshore account if opened in foreign country outside Hong Kong. Generally, there are several bank accounts such as HKD Savings Accounts, foreign currency savings account, Multi-currency saving account, and HKD checking account. You can use these accounts to receive L/C (Letters of credit/ documentary credit). However, it is necessary to open a bill account if you would like to apply for a letter of credit and export financing. Upon opening a bank account, it generally requires the directors’ original identity document (ID or passport) , the original business registration certificate, the original certificate of incorporation, the original memorandum & articles, the company signature stamp, director’s meeting minute, some certified true copies, and the cash deposit, etc. When opening a bank account, the bank will immediately receive your deposit, but you may be allowed to withdraw your deposit from bank after the company search is completed. The new company search time is about 20 days.

Q13) When can the new Hong Kong company be found in the record of Department of the Hong Kong Companies Registry?
Ans: Generally, it takes about 16 days.

Q14) What fee should I pay annually after Hong Kong company formation?
Ans: There are annual Business Registration fee and the annual report of the company is to be delivered each year. For the operating business, the company involves accounting and auditing.

Q15): Who should responsible for the accounting and auditing after the company setup?
Ans: You may appoint your own accounting staff to handle the company accounting. Besides, you may appoint an accounting firm to handle your account. However, the company audit must be commissioned by a certified public accountant or auditor to handle.

Q16): What kind of taxes should be paid by a Hong Kong company?
Ans: Due to simple taxation system in Hong Kong, a Hong Kong company requires to pay for a corporate profit tax which is based on the net profit gain (i.e. profit after deducting from all expenses) from Hong Kong. The standard tax rate is about 16%. If the business is not profitable or the profit obtained outside Hong Kong, companies do not need to pay profit tax. Besides, it requires to pay one time stamp duty on the registered capital for a new Hong Kong company registration in the rate of HKD1 on each HKD1,000 registered capital.

Q17) Is there customs duties for import or export items?
Ans: There is no customs duty for import and export items except tobacco and specific taxable goods. But it requires import and export declaration for all import and export goods.

Q18) Is any department responsible for issuing invoice ?
Ans: In mainland China, the invoice should be issued by the Inland Revenue Department. In Hong Kong, the invoice is issued by the company.

Q19) Can I deregister a Hong Kong company?
Ans: It can deregister a Hong Kong company if the company is no longer operate for more than 3 months with no outstanding tax, government fees, and debts involved, and obtains the consents of all shareholders.

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