Hong Kong is a part of the People’s Republic of China. However, it operates differently from the mainland. As such, the region’s jurisdiction rules in an independent manner. Hong Kong is a popular offshore company establishing-ground for various reasons.
The Definition of Hong Kong Company Formation
Hong Kong Company Formation pertains to the creation of an offshore company based in Hong Kong. The offshore company will have a non-residential status in Hong Kong.
The rationale of an offshore company works this way. A company conducts its business in country A. Then, the owners set up an offshore company in Hong Kong. The offshore company will follow the jurisdictions and bylaws of Hong Kong, as well as operate within its legal business structure. The main company is still operating in country A, but the company is also reaping the benefits and incentives (for example, asset protection) in Hong Kong.
Requirements for Hong Kong Company Formation
To form an offshore company in Hong Kong, you must meet the region’s requirements. Some of the requirements include:
You can register your company without traveling to Hong Kong. You can register online. The agency you will register through will give you the necessary documentation to accomplish.
You need to rent an office in Hong Kong, as well as hire a secretary. There are agencies that can help you rent an office for 5,000-6,000 HKD per year. These agencies can also provide secretaries for your company.
The corporation owner and stakeholders must provide true copies of their passports. Another document that is necessary for this is the proof of residency and a list of the names of the board members as well as shareholders.
Once you are finished with the registration, your corporation will receive a Certificate of Incorporation and Business Registration Certificate.
Benefits of a Hong Kong Company Formation
A company owner does not need to have a residency in Hong Kong. Companies only need to hire a secretary and rent an office there to qualify for non-residential incorporation.
Low Formation Costs
Hong Kong has low incorporation fees. This means that the initial payment towards the Government of Hong Kong is 1,730 HKD. Those who wish to incorporate must pay 250 HKD for their Business Registration Certificate.
Offshore companies have access to a low corporate tax rate. The tax rate for Hong Kong corporations that operate outside the region’s jurisdiction is 0%. However, tax exemptions from corporate taxes are not applicable to individuals who are subject to income taxes in their countries of residency.
Multi-Currency Bank Account
Hong Kong Banks have a multi-currency setup. This means that these accounts have e-Banking features. A Hong Kong bank account is accessible and recognized worldwide. Offshore companies can also open bank accounts outside Hong Kong.
Hong Kong is a prime location for an offshore business. The region has a stable economy and steady political status. It is a good business decision to form an offshore company there.