How to set up a private limited company in Hong Kong as a foreign investor

Hong Kong is well-known as a major business and finance hub in Asia, providing a favorable environment for foreign investors to establish companies. Its stable political climate, transparent legal system, low tax rates, and proximity to the Chinese market make it an attractive choice for entrepreneurs looking to expand in the region.

Registering a private limited company in Hong Kong offers access to various government incentives and growth opportunities. This article outlines the benefits of setting up a company in Hong Kong and details the requirements and process for registration.

Foreign Ownership in a Private Limited Company in Hong Kong

Foreigners can fully own private limited companies in Hong Kong, giving them complete control over operations and management. Sole shareholders can make independent decisions with minimal bureaucratic intervention, offering greater flexibility. Additionally, having a private limited company in Hong Kong adds credibility with potential customers, partners, and investors, thanks to Hong Kong’s reputation as a global business hub with a strong legal and regulatory framework. This provides security for foreign owners looking to invest and establish a presence in Asia.

Benefits of a Private Limited Company in Hong Kong

Favorable Tax Regime

Hong Kong offers one of the most favorable tax regimes globally. A significant benefit is the exemption of foreign income from taxation, allowing individuals and companies to retain earnings from overseas sources. This policy attracts many international businesses and entrepreneurs to Hong Kong, making it a hub for global commerce and investment.

Additionally, Hong Kong offers a Tax Holiday for small and medium-sized enterprises (SMEs), providing tax relief with a 100% profits tax exemption on the first HKD 2 million of assessable profits for the first five years.

Moreover, Hong Kong does not have a value-added tax (VAT), allowing companies to avoid additional taxes on their products or services. This is particularly advantageous for businesses with international payments, as it reduces the tax burden and avoids the complexities of VAT.

Access to Double Taxation Agreements (DTAs)

Hong Kong’s extensive network of Double Taxation Agreements (DTAs) with numerous countries prevents companies from being taxed twice on the same income, reducing their tax liability. Private limited companies benefit from DTAs by paying lower tax rates on certain types of income, such as dividends, interest, and royalties from foreign countries.

What Do You Need to Set Up a Private Limited Company in Hong Kong?

To set up a private limited company in Hong Kong with Osome, you need the following:

  • Director: Every company must have at least one director who is at least 18 years old and can be either a local or a foreigner.
  • Shareholder: A company must have at least one shareholder, with no restrictions on nationality or residency.
  • Share Capital: There is no minimum share capital requirement, but the norm is an authorized share capital of HKD 10,000 represented by 10,000 ordinary shares of HKD 1.00 each.
  • Company Name: The company name must be unique and not used by any other company in Hong Kong.
  • Registered Office Address: A physical office address (not a P.O. Box) is required in Hong Kong.
  • Company Secretary: A resident company secretary is necessary to ensure compliance with legal and regulatory requirements and provide administrative and corporate governance support.

Annual Compliance Requirements

After setting up a company, several annual compliance requirements must be met, including filing annual returns, holding annual general meetings, and renewing the business registration certificate.

Process for Setting Up a Private Limited Company in Hong Kong with Osome

The process includes the following steps:

  1. Choose a Company Name: Ensure the name is available for registration. Osome checks this through the Companies Registry Cyber Search Centre.
  2. Prepare Documents: Osome prepares necessary documents, including the Articles of Association, Incorporation Form (Form NNC1), and Notice to Business Registration Office (IRBR1), and files them with the Companies Registry.
  3. Apply for Business Registration Certificate: Osome handles this with the Business Registration Office.
  4. Open a Corporate Bank Account: Osome assists with providing necessary documents to the bank.
  5. Apply for Tax Registration: Osome manages this with the Inland Revenue Department.

The estimated registration time is between 3-8 working days.

Streamline Your Company Registration with Osome

Osome provides comprehensive services for businesses setting up in Hong Kong, including company registration, business registration certificates, corporate secretarial services, bank account assistance, accounting and finance, tax and audit services, serviced office space assistance, and monthly payroll.

By using Osome’s services, businesses can experience a hassle-free setup process. Osome’s team of experts assists with all registration aspects and ensures all requirements are met, including ongoing compliance and administrative tasks such as bookkeeping, tax filing, and payroll management.

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