Hong Kong is one of the famous global business cities in the world. And the reason of commencing business in Hong Kong through set up a Hong Kong company is:
- Hong Kong is beneficial by its location with less than four hours flight to all Asia Key regional market.
- Best gate to go into China Market with CEPA and lower withholding tax for dividend and royalty.
- With the historical that allowed Hong Kong people to adopt the bi-culture working environment and majority of citizen can be commu nicate with English and Mandarin.
- The low and simple tax system with only Profit tax is applicable for business
- Logical legal infrastructure and stable politic environment maintain.
- Well establish and mature banking system allow free cash flow over the world.
SET UP REQUIREMENT AND PROCEDURE
Requirement and information need for incorporate Hong Kong companies
Company Name in English and each company should have her unique name registered in Hong Kong Companies Registry.
Physical Director with age 18 or above.
Shareholder can be a natural human or a company.
No restriction of director and shareholder is the same person.
Company Secretary who should be a Hong Kong Resident or a company incorporated in Hong Kong.
A Hong Kong Register Address.
Process Time will be 7 working days after receiving all required document.
Procedure of set up a Hong Kong Company
DOCUMENT FOR TRADE MARK APPLICATION
There is 3 key government department is look after for a Hong Kong limited company. And all the filing with government is working in annual basic.
Business Registration Office (BRO)
This department is taking care of the Business registration license of all Hong Kong Company.
- The annual payment is composed of Registration fee and the Levy.
- Renewal of business should be complete within 1 month before the company anniversary day.
- Company can select to make payment for 1 year license or 3 year license.
- Pros and Cons of choosing 3 year license
Hong Kong Companies Registry (CR)
Companies Registry is responsible all the administrative work of limited company which is register under Companies Ordinance (Chapter 622). Registration, changes and annual return filing of company information have to work through with this department.
Hong Kong Inland Revenue Department (IRD)
This is the tax department in Hong Kong and limited company has to report the Profit tax return and Employer Tax return (for employee salary tax) annually to IRD.
All the tax return (profit tax return and employer tax return) will send out from IRD in April. For profit tax return has to submit to IRD based of the company closing of financial year. And Employer return has to return to IRD within 1 month.
Accordance with the law in Hong Kong, all limited company has to maintain proper accounting book and record for 7 years.
Common misunderstanding found in the market:
- It is the responsibility of the company to make request to IRD for send out the tax return. IRD just have a common practice to send the return to the company automatically in Apr of every year to avoid too many request letter received. No tax return received will accept as a reason for company did not submit tax return.
- Annual tax filing is cover to all company which so ever active or inactive.
- Tax department have the right to make any enquiry related to tax matter to company within 7 years even the tax demand is issued. Improper account record will result to penalties and/or IRD to estimated assessment will be levied.