Q: Can non-Hong Kong residents incorporate a limited company in Hong Kong?
A: Non-residents can set up a local limited company in Hong Kong. However, the company will need to be registered at a local, physical Hong Kong address. The Company Secretary must be an individual who is a Hong Kong resident or a corporation that is based in Hong Kong. MarbleConsultants can help with this process. Our legal and accounting experts help clients set up and develop Hong Kong limited companies whilst complying with all legal requirements.
Q: What regulations apply to the nominal capital and number of members of a Limited company?
A: There is no minimum nominal capital for a limited company. The usual minimum initial issued/paid up capital is HK$ 1.00 equivalent to one share.
Limited companies established in Hong Kong must have at least one founder member holding at least one share. A single shareholder can also be the company director. A separate company secretary must be appointed who is either an individual, usually resident in Hong Kong or a corporation that is based in Hong Kong.
Q: Can a limited company established in Hong Kong have a registered office that is outside Hong Kong?
A: No. All limited companies established in Hong Kong must have a local, physical address in Hong Kong. It is not possible to us a PO Box.
Q: What taxes do expatriates pay in Hong Kong?
A: Hong Kong has a simple and low system of taxation. Tax income is generated from salaries, property and profits. Capital gains, gifts, inheritance and social security are not taxed in Hong Kong. There is no value added (VAT) or Goods & Services Tax (GST).
Individuals pay tax on salaries at a progress rate between 2% and 17% depending on income. Tax reporting is done annually on the specific tax return issued by the Inland Revenue Department. Tax payments are made as lump sums, usually in two payments. MarbleConsultants provide an expert tax consultancy service to individuals and corporations to plan a tax strategy and comply with all Hong Kong legislation.
Q: What are the fees for registering a Hong Kong Limited Company?
A: Incorporation of a Hong Kong Limited Company that has a share capital has an application fee of HK$ 1,720. The capital fee for every full or part HK$1,000 is HK$ 1. This is subject to a maximum fee of HK$ 30,000.
If your registration is unsuccessful you can apply for a refund of HK$ 1,425 plus the nominal capital registration fee. The deposit of HK$ 295 is not refundable.
To set up a limited company without share capital, the cost is based on the company's articles of association members. For 25 member or less the fee is HK$ 170, for over 25 not exceeding 100 member it is HK$340 with and additional HK$ 20 fee for every additional 50 or less members. The maximum fee is HK$ 1,025.
Q: Can non-Hong Kong residents be appointed as a director and secretary of a limited company?
A: The non-residents may be appointed as directors of a limited company. But if the company secretary is an individual, should be an ordinarily resident in Hong Kong; if a body corporate, its registered office or place of business should be in Hong Kong.
Every private limited company must have at least one director and one secretary. If a company has only one director, the director shall not act as secretary of the company.
Q: What is the current Hong Kong profit tax rate?
A: The normal profit tax rate for assessment year 2008/09 and onwards is
Unincorporated businesses: 15%
A concessionary tax rate at 50% of the normal profits rate is applied to trading profits and interest income received or derived from qualifying debt instruments issued in Hong Kong, and to offshore business of professional reinsurance companies.
Q: What are the penalties for failing to pay tax on time?
A: Under the Inland Revenue Ordinance, Section 71 (1), in accordance with the provisions of the Inland Revenue Ordinance to levy taxes tax should be paid on or before the specified date in the notice. If this is not done it is deemed that there has been a delay in tax payment.
If taxpayers have not met the date specified for the first provisional payment the second tax installment is considered due immediately. If the notice of assessment is not paid within the specified time the Inland Revenue Department may take immediate action to recover the tax in full. The Commissioner of Inland Revenue, under the Inland Revenue Ordinance (Chapter 112) Section XII allows the department to take immediate legal action to recover the outstanding taxes. This includes a 5% surcharge levied to third parties issued a notice of tax recovery and legal actions.
Q: According to the ‘Companies Ordinance’, when are registered companies required to submit annual returns?
A: Local private companies with an annual share capital must submit an annual return each calendar year within 42 days of the anniversary of incorporation (other than the year of incorporation). Other local companies must submit an annual return within 42 days of the company's annual general meeting, or within 42 days of a certified copy of the accounts being laid before the company annual general meeting.
Non-Hong Kong companies are required under the "Companies Ordinance" Article XI of the date registered, to submit an annual return within 42 days after each anniversary.
Q: My company name has been registered in Hong Kong. Can I use the company name as a trademark? Is the name automatically protected against trademark infringement?
A: In Hong Kong limited company registration and trademark registration are all separate. Different laws, managed be different government departments, regulate them. The Companies Registry is responsible for the registration of local companies and outside companies incorporated with an established place of business in Hong Kong.
The Intellectual Property Department Trade Marks Registry (www.ipd.gov.hk/ chi/trademarks.htm) is responsible for trademark registration. If your company name is listed in the Companies Registry this does not mean that you automatically have the right to exclusively use the company name as a trademark for promoting or trading in goods and services.
You must make a separate application to the Trade Marks Registry in order to obtain legal protection under the "Trade Marks Ordinance".
Q: What is the difference between deregistration, striking-off and liquidisation?
A: These are three ways to dissolve an existing company. Deregistration is a simple, inexpensive and speedy process to dissolve defunct private companies. Applicants file for deregistration by submitting the specified form (Form DR1).
Striking off is initiated by the Registrar of Companies to remove defunct companies from the register.
The liquidation process is monitored and managed by an appointed liquidator. It includes settlement of accounts, realising and disposing of company assets and dividend payment to creditors (if possible). After all procedures are completed the company is dissolved.