Hongkong Company Formation

Hong Kong Introduction
 

INTRODUCTION
Hong Kong is a former British colony which became a Special Administrative Region of the People's Republic of China with effect from 1 July 1997. Hong Kong continues to have high autonomy in the running of its affairs under a one country, two systems concept. Hong Kong remains a relative powerhouse in world trade and with a comparatively small population of 6.8 million, is one of the top twenty trading economies, the world's third largest financial centre and vies with Singapore as the largest container port by volume. Hong Kong remains the most significant gateway into Southern China.

LAW AND TAXATION
Hong Kong's corporate law is strongly based on British common law. Local businesses are regulated and Hong Kong regards itself as a low tax centre rather than a tax haven. Taxes are levied on profits, salaries and property with rates varying between 15-17.5%. Only profits derived in Hong Kong are assessable for taxation and genuine offshore transactions are not subject to Hong Kong tax, although the Inland Revenue Department ("IRD") is extremely diligent in its determination of onshore and offshore profits. Due to Hong Kong's role as a major trading and entry point to the mainland and Asia generally, the bulk of companies formed in Hong Kong are for trading purposes.

LOCAL CORPORATE REQUIREMENTS
Each Hong Kong company must have a local secretary and a local registered office which must be a physical address and not just a Post Office box.
Effective from 13th February 2004, new companies can be incorporated with only one director and corporate director is permitted for companies that are not subsidiaries of public listed companies.
A minimum of one shareholder is required and a company secretary must be appointed. Details of the company's Director/s, Shareholder/s and Secretary must be filed at the Companies Registry and are on public record.
Each year the company must submit an annual return and penalties will be applied for late filings.
All companies must obtain a Business Registration Certificate from the IRD and on an annual basis must file a set of audited accounts with the IRD. There is ever increasing vigilance by the Companies Registry.
Company names may be expressed in both English and Chinese characters.

LOCAL INFRASTRUCTURE
There are in excess of 1,000,000 companies incorporated in Hong Kong. The Companies Registry now has an on-line facility to check limited amounts of company information. Numerous banks, stockbrokers and finance houses as well as all the major international legal and accounting firms are present in Hong Kong. Hong Kong is also well served by local secretarial, corporate management and trust companies. Hong Kong has an efficient, modern and dynamic banking system designed to assist the international business community.

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