Are you looking forward to investing abroad? The most critical thing is picking the country of choice. The target is picking a place with great ease of doing business, support from the government, and subtle tax regime. One of the best places that investors find irresistible is Hong Kong.
It is the city of skyscrapers. For years, Hong Kong has topped the World Bank list of countries with the greatest ease of doing business. To enter and start doing business in Hong Kong, investors are required to register a limited liability company. In this post, we bring you everything you need to know about registering a company in Hong Kong.
Why Hong Kong? The benefits of incorporating a company in Hong Kong
- Hong Kong is among the most liberal economies in the globe: The ease of doing business in Hong Kong is very high. Starting with opening a limited liability company to support from the government, new businesses find it very easy to establish and grow. As a business economy, no effort is spared to anchor new businesses to guarantee smooth flow of revenue.
- The tax regime is very straightforward: One of the major concerns for investors venturing abroad is the taxes obligations. In Hong Kong, the tax regime is very honest. You only need to pay 16.5% in taxes on profits made from transactions done in Hong Kong. In fact, if most of the deals are completed outside, you can even qualify for a zero percent tax.
- Total support for startups and new businesses: Hong Kong government has established programs that target supporting startups to ensure they blossom and support the economy. It is particularly supportive of companies in tech areas and tech value addition because it considers technology to be the next frontier for economic growth.
- Hong Kong is a global financial hub: For more than three decades, Hong Kong has established itself as a financial hub in the entire globe. With more than 200 banks having their presence in the city, entrepreneurs are sure of easy access to funds for their businesses.
- Hong Kong is the gateway to China: If you want to trade with mainland China, the best way of opening a company in Hong Kong. As a Special Administrative Region of China, call it a province, all companies located there get special treatment when doing business with partners in China.
- The mobile penetration is very easy: Hong Kong is the only place that you will find with a market penetration of over 95% mobile penetration. This means marketing especially using mobile apps is very easy. For businesses in tech and apps niches, there no other place that is better to test and launch tech applications compared to Hong Kong.
The only con of going is the lengthy process to register a business in Hong Kong. However, this is no longer a major issue because the Hong Kong administration allows investors to register companies using agencies.
Registering a company in Hong Kong
To take advantage of the outlined benefits and more, you need to incorporate the recognized legal entity for operation, a limited liability company. There are two main methods to register a business in Hong Kong.
Registering the company on your own in Hong Kong
Registering the company on your own will involve flying to Hong Kong to present all the required documentation and fees to the Company’s Registry. You will require the following to register the company on your own;
- Copies of shareholders and director’s passports
- Documents with proof of residence for all shareholders and directors
- The company’s article of association
- The first minutes that authorize the registration of the company
- The operational structure of the company
- The physical address of the new company (offices of the new company)
- The secretary of the company, his contacts, and proof of residence in Hong Kong
Once all the documents are presented to the companies’ registry offices in Hong Kong, it will take about two weeks to get the certificate of incorporation. Note that the registry’s office might need to reach you for more information before making the decision to give the certificate of incorporation.
If you find it a challenge to put together the documents or you are too busy to fly to Hong Kong to present the papers, a better method is registering the company with an agency.
Using an agency to register the business
Using an agency to register a company in Hong Kong is easy, faster, and highly convenient. Agencies that offer the company registration have been in Hong Kong for years and will assist you to register and commence operations. To register a company through an agency, here is the procedure.
- Identify the agency of choice: Company registration agencies are recognized entities that are allowed to assist clients to incorporate their businesses. To pick the right agency, carefully review their operations, success rate, and feedback from past clients. You should also look at the selected agency’s commitment to walk with your company especially at the difficult startup phase.
- Send the required documents and pay the fees: Unlike when registering the company on your own, using an agency makes the work very easy. Once you send all the documents to the agency, it will help to prepare most of the requirements including Memorandum of Understanding, Article of Association, and Initial Minutes Authorizing the registration of the company.
- The agency will carry the company search on your behalf: The agency will conduct a name search for your company to ensure that it has not been taken. This is very critical to avoid conflict of interest after commencing operations.
- The agency can serve as your resident secretary and Hong Kong office: The two most important requirements for a company to be incorporated are a resident secretary and a physical office. However, if you opt to register the company on your own, it can be a huge challenge getting a resident secretary and physical office. However, if you pick an agency, it can serve as your resident secretary and physical office. This will reduce your workload, make the process easy, and keep the associated cost as low as possible.
Note that though the process of registering the company will take the same period (two weeks) if you had done it by yourself. However, it will be more convenient because you do not need to take a flight to Hong Kong or running ads on local dailies to select a resident secretary.
Once the agency registers the company for you, it will send all the details so that you can prepare to commence operations.
Open a bank account for the company
Now that you have a certificate of incorporation, a bank account will be required to enable you to start transactions in Hong Kong and beyond. You will need to apply for a bank account in a Hong Kong bank using the certificate of incorporation. To raise your chances of getting a bank account, it is equally important to use the services of an agency.
Because of the increasingly stringent measures by banks, it is becoming very difficult for many offshore companies to open and run bank accounts. However, an agency will help you to craft convincing reasons to ensure a bank account is opened with the first attempt.