Company formation in Hong Kong is straightforward across all the various sorts of industries and knowing their multiple features and differences is very important before venturing to invest here. Many kinds of corporate forms can conveniently be incorporated in the Special Administrative Region (SAR). The Companies House of Hong Kong is the central authority of Hong Kong, and all the government departments are under its control. The Companies House has detailed guidelines for various kinds of company forms. It also offers the necessary information on the benefits of forming a company in Hong Kong and the types of licenses required for a company to do business in this region.
Most importantly, before you select any company form for Hong Kong company formation, ensure that it meets all your requirements. If you have no money at hand, you must preferably start by opening an offshore bank account. You can easily open an offshore bank account in the name of your company. Offshore banks offer more safety to your money as the bank account in Hong Kong will not be opened in your name but under the company’s name.
It has been observed that most business people prefer using the Chinese model of document writing despite the various advantages offered by the English version of the document. An English version of the form needs to be revised frequently as the laws and changes in different countries’ taxation system may cause differences in the paper. Another reason behind this trend is the fear of prosecution for fraud by foreign governments. Therefore, most Hong Kong business people prefer using the Chinese language to set up their companies.
The benefits of setting up a business in Hong Kong are many more. It would help if you remembered that there are different types of companies and they have to be operated differently. However, there are specific basic rules which apply to all kinds of businesses. One of Hong Kong company formation’s best benefits is that you have access to the open market. There is no restriction on your business’s size, but you need to ensure that the products or services you wish to offer are well known in the local market and that you can successfully compete with other companies.
Before you open a Hong Kong company, make sure that you have adequate staff and a large capital amount. You will have to provide a one director company registration with a nominee director. You should not incorporate more than one director, as the business will be opened fraudulently. After you have set up the company’s basic structure, you can expand it if you wish by purchasing additional shares or property and even adding on new departments.
When setting up a Hong Kong business, you must ensure that you get the required capital and the suitable location. If you are starting a retail business, then the background will matter a lot. You will have to find a place with low taxes and a convenient location for your customers. You must keep in mind that you must save a lot of money in the initial stages to reduce tax.
It is better if you are starting a limited liability company rather than a partnership. The reason is that a limited liability company has more advantages and is more favourable to investors. It is recommended that the new company be incorporated through a fund account as the funds will be kept separate from the company’s profits. Hence, the minimum share capital requirements are reduced.
It is mandatory that when you set up a company in Hong Kong, you should have at least one director and the company must be registered under the Companies Act. The official office can check all the other formalities. If all the formalities are fulfilled, you have to pay the prescribed registration fees, and then the company can go on trading. There is a minimum period of two years for the incorporation of a new company. After this time, if you wish to sell the company or if you want to convert it into a limited liability company, then you need to pay the prescribed statutory charges. Hence it is advisable to go through the necessary procedures of incorporating a company before making any decision.