From 1st April 2016, Hong Kong Government will decrease Hong Kong company’s business registration certificate fee from HKD2,250 to HKD250, which means you will save HKD2,000 cost to own a Hong Kong Company.

A  total of 84 996 local companies were newly incorporated under the Companies Ordinance in the first half of 2013, an increase of 9.34 per cent from 77 738 in the second half of 2012, according to the statistics released by the Companies Registry today (July 14).

HK company

Advantages:

• Low Tax Rate
• Low Cost
• Simple Requirements
• No Exchange Control
• Speedy Incorporation  Procedures
• No Restriction for Having a  Physical Office

Disadvantages:

• Disclosure information (e.g. directors, shareholders )
• Annual filing requirements to Government (e.g. annual return, auditing)
• Annual maintenance fee higher than BVI Co.

BVI company

Advantages:

• Easy to set up
• Low cost
• No tax
• Protection for foreign investors
• Enjoy financial flexibility and privacy

Disadvantages:

• Not easy to open a bank account in Hong Kong

 Q1. What are the different types of business entities in Hong Kong?

The common types of business entities in Hong Kong are company limited by shares, partnerships and sole proprietorship.

Q2. How do I form and register a local limited company in Hong Kong?

There are two methods to register a local limited company in Hong Kong. Ready-made company There are lists of companies that have already been incorporated and the Certificate of Incorporation and Business Registration Certificate are available. It normally takes 2-3 to complete the procedure of the changes. (Please contact us to collect the lists of companies, if any) Tailor-made company If there is preference to the company name, amount of authorized capital, clauses of Memorandum and Articles of association, a company according to your requirement can be incorporated. It will take about 2-3 weeks to have the Certificate of Incorporation.

Q3. Is there any basic requirement on incorporation of limited company?

Yes. The requirement is listed as below: Authorized Capital: No maximum but at least 1 share of any value. Ready-made company has a standard authorized capital of HK$10,000 divided into 10,000 shares of HK$1.00 each. No. of Shareholders: At least 1 shareholder above 18 years old but not more than 50 persons. No. of Directors: At least 1 director above 18 years old. Company Secretary: Company Secretary must be a Hong Kong resident or a Hong Kong limited company. Registered Office: It must be a Hong Kong address (commercial or residential), Post Office Box number is not accepted.

On July 29th, State Ministry of Finance and China’s State Administration of Taxation jointly released an announcement on “Temporarily Exempting Value-added Tax and The Tax on Turnover for Certain Small Enterprises”.

Key content:

• Value-added tax and the tax on turnover will be scrapped for small businesses whose revenues are less than 20,000 yuan ($3,200) a month.
• 6 million enterprises are expected to benefit and the amount of tax reduction is nearly 300 billion yuan per year.
• This policy takes effect from August1, 2013.

According to the 2013 Paying Taxes study of 185 economies, Hong Kong has one of the most tax-friendly economies in the world.

• Profits tax is capped at 16.5 percent.
• Salaries tax is a maximum of 15 percent.
• Property tax is 15 percent.
• No sales tax, no withholding tax, no capital gains tax, no tax on dividends, no estate tax.