Advantages of a Virtual Office
Hong Kong Company Incorporation
What are the incorporation requirements for a Hong Kong company?
- a share capital of at least HKD1
- at least one shareholder who is a natural person (individual) or a body corporate.
- at least one director who is a natural person
- a Hong Kong licensed agent to act as company secretary (cannot be the sole director or a shareholder)
- a Hong Kong registered address
How long is the incorporation process?
Hong Kong is a leading business hub and the incorporation process will therefore be straightforward.
The whole process usually takes 3-10 working days depending on the type of submission. Expedited incorporation can be arranged within 24 hours by T8.
What documents are required?
- Hong Kong ID or passport (for directors or shareholders residing outside Hong Kong)
- Proof of address
- Completed incorporation form (includes preferred company name/s, shareholders and directors)
What documents should I receive once the process is complete?
NNC1 (incorporation form)
Business Registration Certificate (1 year/3 year validity)
Certificate of Incorporation
Article of Association.
Register listing directors, secretary, significant controller and members
First Board Resolution
Open a bank account. T8 can assist with the whole process - from completing the required documents to booking appointments at the bank.
Which registered address should I use?
If you decide to use our address as a registered address, we will receive and manage all government documents sent to your company. The company secretary maintains any address used by the firm for formal communication. A registered address is the one used during incorporation.
Can a director use his residential address as the registered address?
Yes, however it is not common practice in Hong Kong because:
- Government correspondence often needs a quick response from the company.
- Company documents are accessible to the public. All Hong Kong company documents submitted/filed to company registry can be viewed or downloaded at http://icris.cr.gov.hk.
What are the duties of a director?
Duty of Care – directors have a specific set of standards for their duty of care towards their clients, company, shareholders and members. Failure to comply may constitute a breach of duty.
Duty of Loyalty – directors must not persue their own interests ahead of those of the company.
Duty of Good Faith – directors must act with a conscious regard for their responsibilities.
Duty to Promote Success – a director must act in a way that would best promote the success of the company for the benefit of its shareholders especially when establishing strategic goals, objectives and policies.
Annual General Meeting (AGM)
What is an Annual General Meeting?
An AGM is a compulsory meeting with directors and shareholders held each calendar or financial year under company ordinance.
During the meeting, auditors must be appointed, and any other important matters discussed. Click here for more information.
Company directors are required to provide an audited (or unaudited) set of financial statements that gives a true and clear view of the company’s affairs in the preceding financial year.
The first AGM of the company must be held within 18 months from the date of incorporation. Subsequently, the AGM must be held once every year and not more than 15 months after the last AGM. The audited (or unaudited) accounts must be presented to the shareholders at the AGM and should not be more than six months older than the date of the AGM.
Every company is required to file its annual return (including its audited accounts and/or financial statements) in XBRL format with ACRA within one month from the date of holding its AGM.
How do I deregister a company?
Under Companies Ordinance, a company must be defunct, solvent and meet the following conditions before making an application to deregister:
- No business has commenced for at least 3 months before the application.
- All directors and members of the company agree to the deregistration.
- The company has no outstanding liabilities and is not party to any legal proceedings.
- The company assets do not include any immovable property situated in Hong Kong.
Click here for more information about Companies Registry deregistration.
When you have ceased your business or branch business, you must inform in writing the Busines Registration Office of the Inland Revenue within 1 month of your date of cessation.
The deregistration process can take 6-9 months before the company is fully dissolved or deregistered. Companies that applied for deregistration are still required to observe statutory obligations including filing of annual returns until the process is complete.
Transfer of shares
How do I transfer shares of my incorporated company?
Do you want to transfer shares? Or would you like to add shareholders?
The process is fast and simple - provided all required documents are submitted (see below):
- Board resolution agreement
- Share transfer form signed by the transferor (Seller) and the transferee (Purchaser)
- Instrument of Transfer
- Bought and Sold document
- Agreement of Sale & Purchase
- Memorandum and Articles of Association of the company
- A copy of the latest audited financial statements (and/or latest accounts; these reports are crucial for completing transfer of shares as IRD will charge the stamp duty based on these reports)
- Latest NAR1 (if there are any changes to the structure of the company).
Transfer of shares can take just 3-5 working days provided all the documents are complete. Upon completion, T8 will prepare the Register of Members, Register of Transfer and issue a share certificate.
Click here for stamp duty rates/computation.
What is a significant controller?
As of 1 March 2018, under the Company (Amendment) ordinance, a company incorporated in Hong Kong must identify and maintain up-to-date beneficial ownership information of a significant controller of the company. The register should be available for inspection by law enforcement officers.
A significant controller is:
- A registrable person who is a natural person that has significant control over the company; or
- A registrable legal entity (a company), which is a shareholder of the company that has significant control over the company.
Who can become the significant controller?
A significant controller must meet one or more of the following conditions:
- The person holds, directly or indirectly, more than 25% of the issued shares in the company or, if the company does not have share capital, the person who holds, directly or indirectly, a right to shares in more than 25% of the capital profits of the company.
- The person holds, directly or indirectly, more than 25% of the voting rights.
- The person holds, directly or indirectly, the right to appoint or remove a majority of the board of directors of the company.
- The person has the right to exercise, or actually exercises, significant influence or control over the company.
- The person has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or a firm that is not a legal person, but whose trustees or members satisfy any of the first four conditions in relation to the company.
A significant controller register must be kept at the company’s registered office address or any other place in Hong Kong and must be available for inspection.
What are the annual statutory requirements within a company for Companies Ordinance (CO) and Inland Revenue Ordinance (IRO)?
- The Business Registration Certificate is issued for 1 year or 3 years depending on the initial application.
- Company Audit - the report must be filed 18 months from the date of incorporation.
- NAR1 (Annual Return Form) detailing information such as Directors and Members’ details. Any changes made within the inclusion year must be reflected on the annual return.
- Annual General Meeting- to be held within the fiscal year.
What type of business should I set up?
Limited Liability – is the most common business in Hong Kong. It offers protection of personal assets from business risks and liabilities and is a separate legal entity.
- Limited by Shares: A company limited by its shares is the most common in business. This form of company liability is limited to the value of the shares – the capital of the company is broken down into shares that are owned by shareholders. If the company successfully turns a profit, the shareholders receive a dividend from the company. If the company suffers a loss, the shareholders, at most, will lose their investments in the shares of the company.
- Limited by Guarantee: Companies limited by guarantee are typically used for associations, charity and non-profit organizations. There are no shares, and the company’s members share an amount to the business that grows in case of a wind up. This type of business comes with some remarkable benefits such as members enjoying limited liability and preserving the democratic control on all matters.
Sole Proprietorship - is easy to set up as it is a small scale and low-risk business. The drawback of this type of business entity is that it does not protect the personal assets of the owner from the liabilities of the business and does not have a separate legal entity. This not recommended for new entrepreneurs.
Partnership - allows two or more people to share ownership and responsibility of a single business. It increases the ability to raise funds. However, partners are jointly and individually liable for the actions of the other partners.
Foreign Company - Foreign companies interested in setting up an office in Hong Kong can register a branch office, subsidiary, or a representative office.
What is Dormant Status?
A company is considered dormant when there are no accounting transactions recorded and no business activities undertaken for at least 3 months.
At least 75% of shareholders must vote and agree to the dormant status. A special resolution must be submited to CR signed by either a director or shareholders of the company.
The company must have at least one director, shareholder, and a company secretary. Companies that are dormant are still required to obtain a valid BRC and file a NIL PTR.
What are the benefits for foreign investors and foreign owned companies in Hong Kong?
What are the benefits for foreign investors and foreign owned companies in Hong Kong?
- Strategic location
- Hong Kong companies enjoy preferential access to the Mainland China market.
- Ease of business
- Opening a business in Hong Kong is easy and inexpensive compare to other countries. You can set up your company in Hong Kong in around 2 to 10 days. Furthermore, foreigners who wish to set-up business in Hong Kong can easily relocate by applying for an appropriate work visa.
- A foreign national is permitted to own 100% of a Hong Kong company, and can be the sole director/shareholder.
- Companies in Hong Kong are permitted to open multi-currency bank accounts.
- English is one of the two main languages of Hong Kong, the other being Cantonese.
- Attractive Tax Regime
- Hong Kong has one of the lowest tax jurisdictions in the world, drawing foreign investors to the city.
- World’s freest economy
- Hong Kong is one of the world’s most dynamic economies driven by the principles of free enterprise, free trade and free markets open to all. There are no restrictions on inward and outward investments, no foreign exchange controls and no foreign ownership restrictions.
Bank Account Opening
Opening a bank account
What documents are required?
- Incorporation Documents (NNC1, CI, BRC, AA)
- Statutory books
- Board resolution
- Latest NAR1 (if applicable)
- Business plan
- Hong Kong ID/passport
- Proof of address
What are the business proofs?
- Business Plan/Proposal
- Business Description (nature of business, overview of the company)
- Certified business proof of address (no longer than 3 months)
- Company website, brochures to illustrate the product or service
- Documents that show the size of the company (number of employees)
- Expected annual turnover
- Invoices from suppliers
- Agreements from Supplier
- Purchase Order
- Business License
- Sales Contract
- Partnership Contract
- Trading Documents
- Lease of Office or Property Search Report
- Audit Report
- Current Company Payroll record/tax record
- Source of wealth and source of funds of the company
- Certified internet undertaking, such as a contract with webhost if company is offering online services/business.
What could I be asked at a meeting with the bank?
- What is the nature of business?
- What are the key products/services?
- How old is the business?
- What is the target market and where is this market located?
- How much is the expected/estimated annual turnover?
- What is the trading currency?
- Where will products be sourced from? (if relevant)
- What is the source of wealth and source of funds for your company?
When should I arrange an appointment with the bank officer?
Appointment arrangements should be made at least 10-15 days prior to the intended appointment date.
Who should attend the meeting?
All directors and shareholders with 10% or more shares are required to attend the meeting.
*All documents must be in English. If not, translation and legalization are required.
*All digital copies of documents such as incorporated documents, proof of address and passports must be certified.
Accounting & Auditing
Why do I need Accounting Services
- Bookkeeping is necessary for the auditing of financial statements
- Hong Kong has a statutory requirement that all companies must keep their financial statements, according to the Company Ordinance
- It keeps your business organised by keeping track of your spending, and proves your competence to clients, banks and investors
- It helps in avoiding losses in the long term of running the business
- Avoid any fines or fees for missing/late financial reports needed annually
What does Accounting Services provide?
- Payroll services
- Bookkeeping service
- Financial statements: Cashflow statements, income statements, organisation of spending for unaudited accounts
- Hong Kong corporate tax filings with profits tax return, filling annually
What benefits do I gain from Accounting Services?
- Gain a perspective on cash flow of the business
- Gives an insight to the business’s financial strength and weaknesses
- With an organised set of financial statement is can help secure bank loans with ease
- Advanced business management
- Better relations with Hong Kong government
- Prove your validity as a business
- Qualify for offshore revenue