Since 1997 when Hong Kong got back independence from the British, its administration has been on a mission of making the jurisdiction the best business hub on the globe. The results are now there for everyone to see – Hong Kong is a paradise for investors. So, if you are thinking of growing your company offshore, Hong Kong might be the best springboard to success.
This post takes a closer look at Hong Kong to determine the main advantages of forming a company in Hong Kong. Besides, it outlines the main steps to follow when registering a company in this high potential jurisdiction.
Special Benefits of Registering a Company in Hong Kong
The main reason why many investors go for company formation in Hong Kong is its low tax regime. Note that while other islands are battling the tag of tax havens, Hong Kong is getting praise all over the globe for its low and straightforward tax regime. Here is a demonstration of how it works.
Hong Kong uses a two-tiered tax rate system that is designed to help spur growth for businesses that come to the island. Once you open a business in Hong Kong, the first two million HKD in assessable profit is taxed 8.25%. However, anything beyond the two million is taxed 16.5%.
To make the jurisdiction even more attractive, Hong Kong does not charge dividend tax, capital gains tax, withholding tax, and hotel accommodation tax. Other special benefits of opening a company in Hong Kong include:
- Hong Kong has a well-developed infrastructure.
- It serves as a gateway to Mainland China.
- You have access to a well-educated workforce.
- Hong Kong has a very supportive regime.
Company Formation in Hong Kong: The Three Main Steps
Now that you know the main benefits of opening a business in Hong Kong, here are the three main steps of incorporation.
Step One: Pick the Preferred Type of Company and Get a Name
In Hong Kong, there are four main types of businesses that you can form. Here, it is important to be careful because the company format will determine a lot of things, such as protection for personal assets, the possibility of sharing profits, and even limitations on the activities that you can do. Here are the commonest types of businesses that you can form:
- Limited liability company.
- Branch office.
- Representative office.
Step Two: Prepare the Required Documents
After selecting the preferred business format, the next thing is preparing all the required documents, which include the following:
- A dully filled company incorporation form.
- The company’s articles of association.
- Copies of proof of residence and passports of the non-resident directors and shareholders.
- If you have resident directors, provide copies of their ID cards.
- A copy of the passport or ID card of the resident company secretary.
- Company address.
- A duly approved company name.
Step Three: Submit the Documents to the Companies Registry
The last step in the process of company formation in Hong Kong is submitting the documents to the registry. So, make sure to pay the required fees, submit the documents, and wait for five-seven days. Does the process look lengthy and tedious?
Most investors find it challenging to prepare all the documents, and make several trips to Hong Kong to register companies. Instead of following that route, a better and simpler method is using a firm of experts to register your company. These are professionals in company registration and will also hold your hand for a smooth entry into the Hong Kong market.
If you are looking forward to investing offshore, one of the best places is in Hong Kong. The best way to incorporate your company is to work with a firm of experts because they have a lot of experience and can help you craft strategies that work.