How long does it take to set up a Hong Kong company

Hong Kong Company can be incorporated within one day. We also have ready-made (shelf) companies available for immediate use.

How are companies taxed in Hong Kong?

Hong Kong has a very simple low tax regime with profits tax capped at 16.5%. HK employs a territorial based system of taxation, which means only those profits that are sourced within HK are subject to tax. Profits derived elsewhere are not taxed in HK. Furthermore, Hong Kong does not levy any tax on sales tax or on goods and services.

Do I have to come to Hong Kong to incorporate a company?

No, you can incorporate a Hong Kong company from outside Hong Kong. Hong Kong companies do not require a Hong Kong-resident director.

Can I change my company name after it is incorporated?

Yes, changing the name of the company is a simple procedure and can generally be completed within two days.

Can I act as company secretary to my company?

Yes, it is possible to act as the secretary of your company provided you are a Hong Kong resident and are not the sole director of the company. However Sovereign will provide a professional company secretary as part of its domiciliary services package

What do I need to do to maintain my company on an annual basis?

Sovereign is able to take care of all administrative tasks, leaving you to focus on running your business. Sovereign can provide professional third party directors, a company secretary, a registered office, payroll services, preparation of accounts and tax compliance services.

Can Sovereign assist me with opening a company bank account?

Yes, we can assist you to open a company bank account, either in Hong Kong or offshore. Sovereign has strong relationships of long standing with a number of financial institutions worldwide and is able to arrange introductions and account openings on behalf of the company. We are also familiar with their account opening processes and customer identification and due diligence procedures.

Can I use a Hong Kong company to do business in China?

Hong Kong offers easy access, both geographically and commercially, to Mainland China. In addition, the Cooperation of Economic Partnership Arrangement (CEPA) between Hong Kong and China offers further concessions to Chinese imports from Hong Kong. Hong Kong serves as the ideal base to set up a WFOE (Wholly Foreign-Owned Enterprise) or Representative Office in China. The former can serve as a subsidiary company through which to invoice for goods and services rendered. The latter is typically designed to carry out marketing, quality control and market investigation services but is not permitted to invoice. Sovereign can assist clients with setting up both types of entities

Corporate Services in Hong Kong

About business set-up and company formation in Hong Kong

As one of the most open economies in the world, the Hong Kong Special Administrative Region (SAR) is the ideal location for business set-up and company formation. Hong Kong is specifically geared to enable free enterprise to flourish with a minimum of bureaucracy and restriction.

Hong Kong combines a simple low-rate tax regime with free market principles. There are no restrictions on inbound or outbound investment and there are no nationality restrictions on ownership. Foreigners can invest in almost any business and own up to 100% of the equity.

Territiorial tax system

The Hong Kong tax system is territorial. Profits from a Hong Kong business are subject to profits tax (currently at a rate of 16.5%) but foreign-source income is not taxable even if remitted to Hong Kong. There is no capital gains tax, no sales tax, no withholding tax on dividends or interest and no inheritance tax.

Intellectual Property

The government of Hong Kong SAR has specific policies and legal protection in place for intellectual property rights. The city’s intellectual property laws have been developed to reach the highest international standards to create a free and fair business environment.

Regional headquarters and business hub

In addition to being a major financial and commercial centre in its own right, Hong Kong serves as a regional headquarters and business hub for the Asia Pacific region. It also acts as a gateway for companies looking to do business in Mainland China and mainland enterprises seeking access to global markets.

With all of Asia’s key markets less than four hours’ away, it is easy to see why over 9,000 businesses and companies have made Hong Kong their home. Many have placed their strategic functions, including sales, operations, research and development (R&D), distribution, regional headquarters and corporate treasury centres in the city.

As an international finance centre, Hong Kong’s independent legal system, rule of law, free flow of information and capital, and sound regulatory regime, put it in a prime position to help businesses make the most out of China’s ‘Belt and Road’ Initiative, which is set to link Mainland China with countries across Asia, Europe and the Middle East.

Favourable business environment

Hong Kong’s appeal is built on its political stability, the rule of law, the free flow of information and the use of English as the language of business. It offers a strong pool of local well-qualified talent, while business-friendly immigration policies make it simple to recruit professionals from overseas.

Guangdong-Hong Kong-Macao Bay Area (GBA) city cluster

Another opportunity arises from the , which will combine the resources of more than ten cities throughout the region. Hong Kong is to play a key role in ensuring the cluster is internationally competitive, making it the ideal location for businesses and companies to enjoy the benefits.

Free Trade

Another advantage of setting up business in Hong Kong is its free trade policy. The city’s free port status and easy customs procedures makes it easier for businesses and companies to operate.

Hong Kong has eight Hong Kong’s Free Trade Agreements, respectively with Mainland China, New Zealand, the Member States of the European Free Trade Association (EFTA), Chile, Macao, the Association of Southeast Asia Nations (ASEAN), Georgia and Australia.

Sovereign Hong Kong also provides Trust administration to help you protect your assets and family wealth. Click through to our Private Client section for more information.

Hong Kong Company Formation – why incorporate with us?

Sovereign is a leading worldwide corporate services provider with over two decades of experience in the Hong Kong market. Sovereign Trust (Hong Kong) can assist with your Hong Kong company formation. We will select the most effective and efficient legal entity to suit your requirements, and will then form and register the new company with the Companies Registry (Hong Kong) in line with local laws and regulations.
For Hong Kong company registration, Sovereign will assist you to choose the type of company that best suits your business:
- Company limited by shares – the liability of members is limited by the articles of association to the amount unpaid on the shares respectively held by them.
- Company limited by guarantee – no share capital and the liability of members is limited by the articles of association to the amount that the members respectively undertake to contribute to the assets of the company in the event of its being wound up. Non-profit-making organisations are usually registered as guarantee companies.
Choosing a company name
Sovereign will then assist you to choose a name for the company registration. A proposed company name can either be in English or Chinese, or both (but cannot be a combination of English and Chinese). A company name will not be registered if it is the duplication of a name appearing in the Registrar’s Index of Company Names or a name of a body corporate incorporated or established under an Hong Kong Companies Ordinance. There are also restrictions on the use of certain words in relation to government bodies or licensed activities.
The application documents for company registration must include:
- Incorporation Form
- A copy of the company’s articles of association
- A Notice to Business Registration Office
There is no requirement on the minimum amount of a new company’s paid-up capital under the Companies Ordinance.
Certificate of Incorporation and Business Registration Certificate
Generally, for applications delivered in hard copy form, the Certificate of Incorporation and Business Registration Certificate of a company limited by shares will be issued within four working days after the date of delivery. For applications delivered in electronic form, the certificates will normally be issued within one hour after delivery of the documents at the e-Registry for a private company limited by shares. For a company limited by guarantee, the certificates will generally be issued in about three weeks.
A private company must have a company secretary and at least one director who is a natural person (i.e. an individual). The sole director of a private company must not also be the company secretary. A private company having only one director must not have a body corporate as its company secretary if the sole director of that body corporate is also the sole director of the private company.
A public company or a company limited by guarantee must have a company secretary and at least two directors, one of whom may be the company secretary. It must not have a body corporate as its director.
If the company secretary is a natural person, he or she must ordinarily reside in Hong Kong. If the company secretary is a body corporate, the address of its registered or principal office should be in Hong Kong. There is no requirement under the Companies Ordinance that a director must be a Hong Kong resident.
The particulars of the first director(s) and company secretary and the registered office address must be provided in the incorporation form. The registered office must be situated in Hong Kong.
A company will be required to maintain a minimum presence in its place of incorporation – a registered office and a resident company secretary and/or a resident agent. We generally provide these services for all of our clients and describe them as ‘domiciliary services’
We also provide the necessary expertise in administering and managing companies, including company secretarial services, company law, board procedures, director responsibilities and shareholder relations, and financial and corporate compliance requirements. This will enable the company’s owners to focus on their primary business.

Choosing the right company set up

Private Limited Company Registration

The new Hong Kong Companies Ordinance, which came into effect on 3 March 2014, streamlined the eight different types of companies that could be formed under the old Hong Kong Companies Ordinance into five types:

Private companies limited by shares
Public companies limited by shares
Companies limited by guarantee without a share capital
Private unlimited companies with a share capital
Public unlimited companies with a share capital

Incorporating a Public Limited Company

Companies incorporated in Hong Kong can be public or private, and can be limited by guarantee or by shares. Under the Hong Kong Companies Ordinance, a company that is neither a private company nor a company limited by guarantee is a public company.

A Hong Kong Public Limited Company (PLC) is limited by shares but, unlike a Hong Kong Private Limited Company, its shares and debentures may be offered to the public and it can have more than 50 shareholders.

Hong Kong Company Limited by Guarantee

Companies limited by guarantee without a share capital are typically used for non-profit organisations and clubs that require legal personality. This kind of company is limited by guarantee rather than capital, meaning that the parties involved are guarantee members and are not shareholders.

Instead of investing capital, the members guarantee to contribute a predetermined sum to the company to cover its liabilities in the event of the winding up of the company.

Registration of a Foreign Company

Registering a foreign company in Hong Kong can offer significant advantages to incorporating a new Hong Kong company in certain circumstances. It must be registered with the Hong Kong Companies Registry as a non-Hong Kong company that has established a place of business in Hong Kong under Part 16 of the Companies Ordinance. This must be done within one month of establishing the place of business in Hong Kong…

Branch, Subsidiary or Representative Office

The most frequently used types of business vehicle for foreign companies wishing to carry on business in Hong Kong are:

Hong Kong-incorporated Subsidiary Company
Branch Office of a Foreign Company
Representative Office

Every business in Hong Kong is required under the Hong Kong Business Registration Ordinance to obtain a Business Registration Certificate within one month of commencing business for its principal office address and also for any other business address in Hong Kong.

Setting Up Partnerships

Partnerships are businesses that are established and co-owned by two or more people who join together to carry on the business with a view of sharing profits. Generally, all partners have equal rights in the management of the partnership. There is no requirement to have any written documentation, although a Partnership Agreement is advisable. Partnerships may have between two and 20 partners. Once there are more than 20 partners, the business must be registered as a company.

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