Setting up a company in Hong Kong, may seem like an impossible feat. You’ve heard about the different tax rates, legal requirements, and the endless paperwork. But don’t worry! This article will provide you with all of the information you need to successfully set up your company in Hong Kong, what taxes apply to foreign companies in Hong Kong, what steps are required for setting up a company in Hong Kong, and more.
You have to consider all the legal and tax issues, as well as how to fund your company. If you’re looking to set up a company in Hong Kong, here are some things you need to know about starting up a company from outside of the country.
Hong Kong has favorable tax rates for businesses. In fact, they have some of the lowest corporate tax rates in the world. In addition, there are no taxes on income from dividends or capital gains.
The government also offers generous deductions for startup costs and provides extensive support for new entrepreneurs. It’s also a more stable place than other countries that may be experiencing political trouble or economic hardship right now – which is good if your company relies heavily on foreign partnerships or trade deals.
Many foreigners want to set up a company in Hong Kong. There are several reasons for this, including the city’s booming economy, geographical location, or just to diversify their portfolio.
You can also get an insight into how the city works and what it has to offer. It is important to note that Hong Kong does not allow foreigners to register as shareholders of an incorporated company without first obtaining a Type 12 or 14 permit issued by the Immigration Department.
When starting a business, it is important to consider the location of your company. There are many different factors to take into account, such as tax rates and economic climate, but if you plan on running a company from abroad, Hong Kong might be a great place for you.
To set up a company in Hong Kong as a foreigner, there are three main steps: registering your company name with the government’s Registry of Company Names, register company with the Inland Revenue Department to get a Tax File Number (TFN) and opening a bank account. In this section, we’ll walk you through each step in detail.
How to set up a company in Hong Kong
To start a business in Hong Kong as a foreigner, follow these steps:
- Create a Hong Kong SAR company
Decide on a Business Name
Your company’s name is the simplest of tasks. If the name is similar to a trademark that has already been registered in Hong Kong or is obscene or objectionable in nature, it will not be allowed to be used.
- Select the Type of Business to Enter
It’s important to remember that while Hong Kong allows a variety of business structures to be registered, a corporation is the only one that can be created without physically entering the city. Most entrepreneurs prefer to set up a private limited company, rather than a public limited company, if they are large corporations.
- Get Your Company Registered
In accordance with the 2019 Companies Amendment Ordinance, you must appoint a Hong Kong resident as your company’s representative in order to be eligible for company registration as a foreign entrepreneur.
Officers may inspect the representative’s ‘Significant Controllers Register,’ which must be kept current at all times.
- Open a Hong Kong Business Bank Account for Your Company
To open a corporate account in Hong Kong, just as in any other country, follows the same steps. A profitable business model begins with a well-prepared company. Make it clear to the bank that you are capable, trustworthy, and a viable investment opportunity.
Besides that, you’ll have to show proof of your company’s legitimacy by way of a business license and a completed corporate account application with your bank of choice, among other requirements.
- Register with Inland Revenue Department
Fill out and submit the Notification of Company Formation form to IRD.
Register with IRD’s tax registration service provider after receiving notification from IRD.
- Register with Companies Registry
File Notice of Incorporation form at Companies Registry within 3 months of incorporation date or before first shareholders meeting, whichever comes first.
What taxes apply to foreign companies in Hong Kong?
In order to set up a company in Hong Kong as a foreigner, you will need to pay tax on your earnings. The amount of tax that you will be subject to is determined by the number of days that you spend in Hong Kong.
If you are not present in Hong Kong for more than 180 days, you will only be subject to the 15% profits tax. If you are present for more than 180 days, then your profits are subject to the 17% profits tax.
What steps are required for setting up a company in Hong Kong?
Setting up a company in Hong Kong is actually quite simple. All you have to do is fill out an online form and submit some supporting documents. If your company is doing business in Hong Kong, the same steps apply.
Here are the steps for setting up a company in Hong Kong:
- Fill out the online company formation application on the Companies Registry website
- Submit one copy of your passport, “Certificate of Incorporation” document, and “Memorandum and Articles of Association” document
- Pay HK$250 (or about $40 USD) for your certificate of incorporation
- Wait for confirmation from the Registry office that they have processed your request
- Contact an authorized corporate service provider to help you with accounting, taxation, payroll, or legal requirements.
There are numerous online options for registering your company, such as through the e-Registry. You’ll also need the following:
- Forms for the formation of your business
- Copies of directors’ and shareholders’ identification cards
- Documentation proving the company’s Hong Kong office location.
However, if you want the peace of mind that comes with using a reputable incorporation service, you should do so. This stage usually takes two weeks to complete.