Hong Kong has always been considered a haven or gateway to doing business in Asia, particularly Mainland China. Hong Kong is an essential hub for international business with a thriving startup scene.
Businesses based here will enjoy a low tax regime, excellent infrastructure, a booming economy with high GDP, and a business-friendly environment. It also has one of the easiest and hassle-free incorporation processes in the world.
Still, it is better to do your research before deciding to set up a company in Hong Kong to ensure the process goes smoothly. That’s why we’ve created this guide to help you get started on your venture.
#1 Planning stage
Research ways to set up a company
If you decide to do it yourself, you must submit your documents to the Company’s Registry, either via the e-registry portal or physically at its office in Hong Kong. In this case, you’ll have to ensure that all your documentation is complete, correct, and in order.
You can also engage professional lawyers to help you. They will advise you on how to properly prepare and file your documents. However, these services can be costly relative to the ease of setting up a business in Hong Kong.
Another option is to use the services of a corporate providers. You can find and work with them via online platforms, for example, YouReg. We act as a middleman between our clients and corporate administrators to facilitate a fast and easy process. We also offer a range of other services, like bank account opening, bookkeeping, legal and tax consultations.
Draw up a business plan and corporate structure
Next, you need to decide the type of company you want to register so that you can prepare the necessary documentation. Typically, foreigners are allowed to register wholly-owned limited liability companies in Hong Kong.
Here is what you need to consider while drafting business plan:
- Determine the type of company you want to set up
- Choose a name for your company
- Identify the directors and shareholders of the company
- Decide on the share capital
- Prepare the company’s Articles of Association (can use the Samples available on CR website)
- Appoint the company secretary, which would normally provide the registered address
- Determine the registered office address, unless provided by the company secretary
Importantly, you should also take time to learn about corporate tax rates in Hong Kong. Typically, Hong Kong has a very low tax rate of 16.5%, with a lowered 8.25% rate for the first HK$2 million of profits. There are no sales, value-added, withholding, capital gains, or dividends tax.
About the main part of the whole process (i.e. company registration), we wrote in the next article.
