How To Incorporate a Company – Step-By-Step Instruction
You will need to follow some clear steps to meet the requirements of setting up a company online in Hong Kong.
When following the incorporation process, several roles need to be appointed, including a director, a secretary and a designated representative. You must also select a unique name, register a physical address and have at least one shareholder.
Choose a Company Name
Before you proceed with the incorporation process, you must decide on your business name. This is important in the early stages of setting up a business in Hong Kong as it is a crucial component of the form you must complete. Find a unique name that hasn’t already been used, or you will be required to change it later, which could slow down your incorporation application.
Choose a name that accurately represents your business, brand, and Hong Kong target market, and avoid anything that could be interpreted as offensive. Remember that this is likely the first thing customers will learn about your business, so you’ll want to give a good first impression.
Make a List of Company Executives (Companies Ordinance)
You will need to keep a list of all company executives. These people in your management team have significant control when you incorporate a company. Ensure the list is well maintained and any new executives are recorded. This is also known as the Companies Ordinance.
Companies Ordinance or the Companies Act is an official document created in 1984 that states the legal limits to companies' business in Hong Kong.
Appoint a Designated Representative (DR)
To successfully set up a company in Hong Kong, it is necessary to appoint a Designated Representative (DR) who will be accountable for fulfilling reporting obligations to the Significant Controllers Register (SCR). The DR must fulfil the requirement of being a local resident and can be an owner, director, or employee of the company. Alternatively, a licensed professional, such as a legal or accountancy professional, can also serve as the DR.
In Hong Kong, every company maintains records on ownership and individuals who influence decision-making processes. The Designated Representative plays a vital role in managing SCR inspections and ensuring the accurate and current maintenance of records for Significant Controllers.
You can learn more about the Significant Controllers Register and Designated Representatives in our article about how Hong Kong collects information about company ownership.
Choose a Company Director
Limited companies can have any number of directors, but you must appoint at least one when you set up a company. There are some rules about who can be a director:
- They do not need to be a Hong Kong resident and can be of any nationality
- They must be at least 18 years old
- They must not be bankrupt or have any convictions
- They do not need to be shareholders
Directors are responsible for the company's overall management, both individually and collectively. They should act in their best interests and ensure it runs both lawfully and efficiently.
Decide on the Shareholders of the Company
Your business can have between 1 and 50 shareholders. There are some rules about who they can be during the incorporation process:
- They do not need to be a Hong Kong resident and can be of any nationality
- They must be at least 18 years old
- Directors can also be owners
- They can be an individual or a company
Put simply, the shareholders own the company and appoint directors to run it. Shareholders can generally make decisions on issues directors cannot, and also keep an eye on the finances, which includes approving how money is spent. These are important things to think about before you set up a company.<br>
Appoint a Company Secretary
The next role to appoint when setting up a company in Hong Kong is a company secretary who will be responsible for your records and ensure you comply with statutory requirements. This can be an individual person or a company. Individuals must be residents of the country, and companies must be registered locally as a place of business. If you have a sole director/shareholder, they cannot also fulfil the role of secretary.
Contrary to the name, this is not a clerical role but acts as a form of gatekeeper, playing an advanced role in the company’s legal maintenance. You cannot complete incorporation without a company secretary and must always have one appointed for as long as you are trading.
Share capital is the value of equity your business has issued in shares. There is no minimum share capital requirement for Limited Partnerships or Limited Liability Companies, but you will need at least one share issued to a minimum of one shareholder. Shares don’t have to be issued in Hong Kong dollars as long as they are in another major currency.
When setting up a company in Hong Kong, the type of shared capital is Issued capital, which refers to the total value of currently allotted shares. This is calculated based on the number of allotted shares and the value of each share.
Provide Registered Address
It’s important to have a local address to register and start your company. This must be a physical location in Hong Kong, not just a PO Box. A registered address is required in law to receive official mail from the government. However, it doesn’t have to be your main place of business — it is often the same location as the secretary.
One option is to use a business incorporation company that can provide you with a registered address. You can also use your residential address as your business address, but remember that this information will be publicly available once you register.
File Company Officers File with Hong Kong Companies Registry
Details about your company officers are public information and must be available under the Hong Kong Companies Registry.
It is possible to keep this information confidential. If you wish to do this when you set up your company, you must enlist a professional to appoint a corporate shareholder and nominee individual director.
Hire an Accountant
When setting up a company, it is essential to prioritise the maintenance and filing of accurate accounts. These accounts should undergo annual audits by an experienced accountant and be submitted to the Inland Revenue Department, along with your tax return, utilising your Business Registration Number.
Choosing to hire a company accountant is a wise decision when incorporating a business, as it enhances the efficiency of your bookkeeping processes and ensures that your accounts meet the required auditing standards. Additionally, it grants you the freedom to dedicate your time and efforts to managing and growing your company, fostering its success.
Get a Business Registration Certificate
When setting up a company in Hong Kong, it is crucial to ensure that you have an updated Business Registry Certificate. This document serves as a fundamental outline of your business and must be renewed annually or every three years, depending on the type of certificate obtained. Renewals should be completed one month before the expiry date, and the certificate must be prominently displayed in your office.
If you do not have a Business Registration Certificate, you can acquire one by downloading form IRBR 37 from the Business Registration Office website. It is necessary to complete the form and submit any required fees within 30 days of commencing operations or making any business changes. Adhering to these guidelines is essential to facilitate setting up a company in Hong Kong and ensure compliance with the necessary documentation.
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A step-by-step checklist to get organised before incorporating your new business
What Documents to Prepare for Opening a Company?
Setting up a company in Hong Kong requires submitting various documents to meet the requirements. This process can be complex and time-consuming, so seeking help from a professional business registration services firm is valuable. They have expertise in company incorporation, understand the necessary documents, and can guide you in presenting them correctly. Our overview provides a clear understanding of the essential documents and requirements, empowering you to navigate the process and meet obligations confidently.
1 Articles of Association
When setting up a company, one crucial document to have is the company's constitution. This document outlines your objectives and goals. It explains how directors are appointed, finances are managed, and projects are approached. It provides detailed information about how tasks are carried out and how the company achieves its goals. Think of it as the blueprint or rulebook for your company, guiding its operations and shaping its overall structure. A clear constitution is essential for successfully incorporating and running a company.
2 Completed Incorporation Form
Complete the form with the following information:
- Company name — what will your new business be called? - Remember that this will be one of the first things people see or hear about your company.
- Registered address — this must be a physical location in Hong Kong and doesn’t necessarily need to be where your day-to-day business is carried out. It could even be your residential address, but bear in mind that this information will be publicly available.
- Number of shares taken up — how many shareholders do you have and how many shares have you distributed between them?
- Details of share capital — this should include details of the total value of your share capital, as well as whether you have issued more than one class of shares.
- Liability of members — in a Limited Liability Company (LLC), usually only the shareholders’ liability is limited. This means they are not liable for any debts or obligations, aside from their own financial contribution or the amount unpaid on their shares.
- Information about owners, directors and secretary— these are the three members you must appoint in order to incorporate. Remember that an owner can also be a director, but the company secretary cannot be the sole director or shareholder.
- Brief overview of business activities — this is to communicate your commercial purpose and show the value your business will deliver to society. Depending on where your company is based, you may be able to give a brief overview, whereas some jurisdictions may require a more detailed description.
3 Documents Required by Shareholders and Directors
When you're setting up a company, both corporate shareholders and directors have certain documents to provide in the incorporation process. These include the Articles of Association, outlining the company's rules and regulations. As a resident owner or director, you'll need to provide proof of your residence in Hong Kong and a copy of your Hong Kong identity card. For non-resident owners or directors, you'll need a copy of your international passport and evidence of your residence overseas. These documents are important for verifying the identity and residency of the shareholders and directors involved in the company.
Requirements for Foreigners To Set Up a Company
Hong Kong is the perfect place to set up a new company. As a foreigner:
- There are no requirements for you to be a local resident
- You are welcome to set up as a sole director or owner
- You don’t necessarily need to reallocate – it's possible to run a business from overseas
- You can set it up without being physically present
- However, you may need to be present to open a bank account
As you can see, there are fewer restrictions for foreigners looking to start a business in Hong Kong than other places in the region, which is one of the many things that makes it so attractive to potential business owners. Others include its strategic location in Asia, its well-regulated legal system, and its attractive taxation system.
It also has one of the best infrastructures in the world with efficient transportation and boasts a robust and stable financial system. With few to no language barriers for those speaking English, business communication is easier than you might expect in Hong Kong, especially as a foreigner.
And the company incorporation process is relatively straightforward.
Tips For Starting a Business in Hong Kong
If you're considering starting a business in Hong Kong, it's important to understand the essential steps involved in setting up a company. From navigating legal requirements to embracing the vibrant business environment, there are crucial factors to consider. We’ll provide valuable tips and insights to help you successfully set up a company in Hong Kong. Whether you're a local entrepreneur or an international investor, these tips will guide you through the process and set you on the path to success in this dynamic business landscape.Now that we’ve convinced you that incorporating in Hong Kong is a good idea, here are some top tips for getting started.
Develop a Business Plan
When you're ready to open a company, ensure your business idea is practical. Test your idea and speak to potential customers to determine its viability. Afterwards, develop a business plan to transform your idea into a profitable venture. Consider the problem your idea solves, identify your target customers and competitors, and outline your long-term vision and financial projections. A well-thought-out business plan will guide you in transforming your idea into a successful and lucrative reality.
Invest in Your Brand
When it comes to opening and running a business, brand is everything. Similar to choosing a name, your brand is crucial in communicating the right message about your business to your customers and helping you to stand out.
Take time to build out your brand look as well as really understanding the value you provide to customers. It’s important to develop a clear, consistent brand that customers recognise and can resonate with, so consider building this in your business plan and incorporation process.
Choose the Right Business Structure
When you decide to open a company in Hong Kong, it's important to explore different business structure options. One popular choice is a Limited Partnership. To determine the right structure for your business, refer to our guide on company structures in Hong Kong. It provides valuable information to help you understand and choose the most suitable option for your company.
Familiarise Yourself With Official Processes
Whilst Hong Kong is one of the easier places to open a company, there are still official documents to complete and processes to follow. We’ve covered some of it above, but if you’re looking for more support, you can find out more about our services in our company registration overview.
Looking for more information? You can read and download our comprehensive guide to starting a business in Hong Kong where you’ll find lots of helpful advice on how to start a successful business in the region.
What is a company's incorporation?
Company incorporation is crucial in establishing your business and enabling you to commence trading operations. During this process, you register your business to give it a legal existence. Various structures are available for company incorporation, with Limited Partnerships being one of the most widely chosen options. However, you also have the option to set up a General Partnership or a Limited Partnership, both of which establish a distinct legal entity separate from the business owners. This separation of legal entities helps limit the business owners' liability, safeguarding their personal assets in the event of any legal or financial issues. By carefully selecting the appropriate structure for your company incorporation, you can establish a solid legal foundation and mitigate potential risks in your entrepreneurial journey.
What types of companies are incorporated?
The most common type of business registered in Hong Kong is a private limited liability company. This entity type is widely preferred by entrepreneurs and businesses due to its numerous benefits and flexibility. In international contexts, this business structure is often called an offshore company in Hong Kong. An offshore company, in general terms, signifies a business entity incorporated in a jurisdiction outside of the country where its main operations or activities are conducted. Establishing an offshore company in Hong Kong offers advantages such as tax efficiency, asset protection, access to a well-regulated financial system, and a globally recognised business environment. By leveraging the benefits of a private limited liability company or an offshore company in Hong Kong, businesses can enhance their international presence, maximise operational efficiency, and confidently pursue growth opportunities.
Who can open a new company?
In Hong Kong, the company opening process is not limited to local residents. Both local and non-local individuals can open a company in Hong Kong. You are not required to be a resident of Hong Kong to establish a company. However, it is important to note that at least one shareholder is required during the incorporation process. The shareholder can be a non-resident individual or a corporate entity, allowing for flexibility in ownership structure. This inclusivity in company formation allows entrepreneurs from around the world to take advantage of the favourable business environment in Hong Kong and tap into its global opportunities. Whether you are a local resident or a non-resident, you can explore the possibilities of opening a company in Hong Kong and benefit from its strategic location, robust legal framework, and thriving business ecosystem.
How long does it take to setting up a company in Hong Kong?
The timeframe for setting up a company in Hong Kong typically takes around one week once all the necessary preparations are in place. However, it's important to note that the duration may vary depending on certain factors, particularly if you apply overseas. In such cases, additional time may be required to accommodate the logistics involved in the application process, such as document submission and verification across different jurisdictions. Factors like the complexity of the company structure, specific business activities, and any additional licensing or regulatory requirements can also impact the overall timeline. While the general estimate is approximately one week, consulting with professionals or relevant authorities is advisable to get a more accurate estimation based on your specific circumstances.
How much does it cost to register a company in Hong Kong?
When opening a company in Hong Kong, the current fee for 2022 is HKD $1,545. This fee covers incorporating the company and obtaining the necessary legal documentation. Additionally, there is a separate fee of HKD $3,950 for obtaining a 3-year Business Registration Certificate, which is a crucial requirement for operating a business legally in Hong Kong. It's important to note that these fees may be subject to change, and it's recommended to verify the latest fee structure with the relevant authorities or seek professional guidance. Moreover, it's worth considering that additional costs might be involved, such as legal or accounting fees, depending on the specific requirements and services availed during the company registration process.
How can I incorporate in Hong Kong?
Opening a company in Hong Kong involves a series of steps that must be followed diligently. To initiate the process, you must first select an appropriate name for your company, ensuring it complies with the guidelines set by the Companies Registry. Next, you must register a valid address for your company, which can be a physical office or a registered address service.
Appointing the necessary roles within your company is crucial. This typically includes designating directors, shareholders, and a company secretary. Each role carries specific responsibilities and requirements, such as ensuring at least one director is a natural person and having a company secretary knowledgeable about legal and regulatory obligations.
Preparing the required documents is an essential part of the process. This involves drafting the Articles of Association, which outline the internal rules and regulations of the company, and preparing the incorporation forms, such as the NNC1 form, for submission to the Companies Registry.
To ensure you navigate these steps successfully, follow our reliable and comprehensive step-by-step guide specifically tailored for opening a company in Hong Kong.
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