Saturday, November 26, 2022

How Foreigners Can Establish a Company in Hong Kong?

Many entrepreneurs from throughout the globe have selected Hong Kong as their place of company formation. Hong Kong has proved to be a good alternative for this purpose due to its business-friendly environment, absence of legal impediments to founding a firm, and inexpensive incorporation fees.

Motives for Foreigners to Establish a Business in Hong Kong

There are several reasons why foreigners should company registration in Hong Kong. Foreigners should incorporate their businesses in Hong Kong in order to take advantage of the following significant advantages:

  1. Low fees for business formation and maintenance
  2. omission of capital gains tax
  3. Absence of regulations regarding share capital
  4. Clear and consistent rules for director and secretary appointments
  5. As one of the world’s leading trade cities, Hong Kong is less likely to perceive a Hong Kong company as a tax avoidance vehicle.
  6. The ability to speak a foreign language is a benefit for many foreigners living in Hong Kong. English is an official language and the primary language of commerce. All information on reporting and paperwork is available in English. Hong Kong’s tax processes are uncomplicated, and its rules are straightforward.
  7. The creation of a limited liability business requires a single director and shareholder.
  8. Hong Kong can claim a world-class financial system and communications infrastructure.

Entities that Foreigners May Establish in Hong Kong

Most foreigners conducting business in Hong Kong utilize sole proprietorship and partnerships with the help of a fintech startup lawyer. Others form LLCs and overseas service offices.

  • Limited Liability Partnership

The limited liability corporation is one of the most prevalent business structures in Hong Kong. The benefit of owning such a firm is that it protects the owner’s personal assets from business risks and obligations. A limited liability corporation is an independent legal entity.

  • Sole Proprietorship

This business form is appropriate for SMEs and sole owners wanting a low-risk organization. This company form isn’t recommended for entrepreneurs since it doesn’t protect personal assets.

  • Partnership

This organizational form permits several people to possess a single corporation. Partners share obligations. Increased donation capability. Each partner is liable for the others’ actions. In Hong Kong, limited partnerships are most common since limited partners have minimal liability.

  • Foreign Firm Office

International enterprises interested in Hong Kong might register a branch, subsidiary, or representative office.

Foreign investors in Hong Kong

As a foreigner, all you need to do is pay the agency’s fee and pick a company name. Then, a licensed agency checks whether the name is available in Hong Kong.

To complete the next step, prospective owners must submit a photocopy of their passport, a photocopy of their official credentials as proof of residence, and a questionnaire with standard questions, which may include the prospective owner’s address, passport number, and the company’s director and shareholders based in Hong Kong.

A licensed agency may form a company via e-registration for those who want a simpler business structure with these requirements met. Those who wish to start a major firm in Hong Kong must meet certain conditions. This is the only way to receive a certificate of incorporation and business registration for a new big company. It will happen following online passport authentication. It takes less than two hours to execute.

Owners whose proposed company will have many business layers will be provided pre-signed paperwork (NNC1 Form, Incorporation Form, and Articles of Association) to be signed by the shareholder and the director, and then submit the original credentials to a licensed agency by international courier. It should take five business days to complete.

Companies may be registered online. After paying online service fees, a valid Hong Kong business registration certificate will be asked for. After that, start the online process.

Prospective company owners in Hong Kong may register a corporation in many ways.