Statutory requirements

Share Capital

The standard authorised capital of a Hong Kong company is HK $10.000 (c. US $1,300) although a larger authorised capital may be specified.  The minimum issued capital can be one share of HK $1.

Directors & Shareholders

A Hong Kong company may have a sole director who need not be resident in Hong Kong. Corporate directors will no longer be allowed from 1 Jan 2014.  A Hong Kong company may have one shareholder, which, if desired, may be corporate.  The use of nominees can protect privacy.

Secretary and Registered Office

Every Hong Kong company must have a local resident secretary, a registered office in Hong Kong and a Business Registration Certificate. A nominal business registration fee is payable within one month of the date of incorporation and then annually on the anniversary of incorporation.

Audit and Accounts

Every Hong Kong company must produce annual audited accounts and appoint a Hong Kong registered auditor except: -

Dormant i.e. Non Trading Companies.

Small companies (Companies whose annual turnover does not exceed HK $500,000 c. US$60-65,000.

Tax Returns

Tax Returns are made up annually to 31st March unless the company has chosen a different accounting date. For newly registered companies, a longer period (a maximum of 18 months) applies before the first tax return need be submitted.

Law & Taxation of Hong Kong companies

Territorial taxation. Income from outside Hong Kong is generally NOT taxable.

Corporation tax is 16.5 % for Hong Kong source income, but 0% for non-Hong Kong source income.

Under the guiding principle of "one country, two systems" which was established before the handover the Chinese Government agreed that Hong Kong's capitalist system would remain unchanged until the year 2047. Within this, the legal system remains English Common Law.

Hong Kong profits tax is only charged territorially on Hong Kong source income at a rate of 16.5%. There is no capital gains tax, no withholding tax, no sales taxes, no VAT, no annual net worth taxes and no accumulated earnings taxes on companies that retain earnings rather than distribute them.

Jurisdiction facts guide

Hong Kong is located in the South China Sea 100 miles (160km) south east of Canton. It’s name, from the Cantonese, means fragrant harbour.

A British colony between 1842 and 1997, Hong Kong became a Special Administrative region (HKSAR) of P.R. China on 1st July 1997 and is administratively it is entirely separate from the Chinese tax and company system. Hong Kong is not an 'offshore' jurisdiction as such, but has low tax rates which are levied only on Hong Kong-source income.

Low tax jurisdiction.

Public register of officers & shareholders together with filed accounts provides substance to Hong Kong companies.

Corporation tax is 0% for non-Hong Kong source income and 16.5 % for Hong Kong source income.

Territorial taxation.

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