How to Set Up Offshore Company in Hong Kong

Hong Kong is a special metropolitan area, as well as one of the People's Republic of China's two special administrative areas and China's sole autonomous municipality. The Hong Kong economy is a developed capitalist economy based on a market economy, with limited economic interference by the government. This is a significant financial and commercial center, as well as the location of many business headquarters in the Asia-Pacific area. As a consequence, establishing a corporate office in Hong Kong is a prudent move for businesses wishing to expand their activities here. Businesses who establish a corporation in Hong Kong will profit from several advantages, including but not limited to attractive tax policies, a stable legal system, and a competitive business climate.

1. Benefits of forming an offshore company in Hong Kong:

As mentioned above, Hong Kong has a lot of good characteristics that are suitable for setting up a company, and more specifically, you will enjoy the following benefits after setting up a company here:

Tax scheme

Hong Kong is one of the famous tax havens in the world with many tax incentives and still retains the prestige and transparency of the financial market. With a stable profit tax rate of 16.5%. Say no to VAT, dividend tax, and many other tax incentives, Hong Kong is an ideal location to set up a business

Location

The location of the establishment of the company plays a very important role. Hong Kong is conveniently located both by the sea and nearby China, one of the world's major factories. This place is suitable for businesses doing business related to China or Singapore.

Cutting-edge infrastructure

Hong Kong has long become one of the major financial centers in Asia because of its modern facilities and government support for international businesses. In 2020, Hong Kong is ranked as one of the places with the highest broadband and hotspot speeds in the world, which is one of the first regions to upgrade network infrastructure to 5G

Culture and people

Hong Kong is heavily influenced by Asian culture, specifically China. Thought that would make it difficult for international businesses due to its proximity relations with China, but in fact, besides preserving the inherent traditional cultural values of ancient China, Hong Kong itself is quite modern in the direction of westernization. Majority of Hong Kong-nese communicates in English and Cantonese, some are also able to speak Mandarin. Their polyglot capability can help you to expand your corporation into China faster.

So how many types of business are there ? Let's find out

2. Types of companies in Hong Kong:

Hong Kong has different sorts of business entities adapting to a vibrant economy. However, private limited companies are the most popular structure for offshore company formation in Hong Kong.

• Private companies
• Public companies
• Limited by shares or guarantees
• Sole Proprietorship
• Partnership
• Branch office
• Representative office

However, it is highly recommended that you should only focus on private limited companies as this is the most common and friendly type of business for foreigner to incorporate in Hong Kong

3. Requirements to form a private limited companies:

Company name:

• Can be English or Chinese
• Can Not contain English characters and Chinese character at the same time
• If it is Chinese names, characters must be found in dictionary of Kang Xi or dictionary of Ci Hai or ISO 10646 international coding standard
• Cannot contain simplified Chinese characters
• It is a duplicate of a name appearing in the Registrar's Index of Company Names
• It is a duplicate of the name of a body corporate incorporated or established under an Ordinance; the company name would constitute a criminal offense; or the company name is offensive or otherwise contrary to the public interest.

Requirements:

a. Human resources requirements:

• Directors: minimum 1, can be any nationality, at least 18 years of age
• Shareholders: can be the same person with directors, no residency requirements
• Secretary: mandatory, must reside in Hong Kong
• Ultimate beneficial owners (UBO): can be the same person with director or the person that:
• Directly or indirectly holding more than 25 percent of the shares
• Directly or indirectly holding more than 25 percent of the voting rights
• Directly or indirectly holding the right to appoint or remove a majority of directors
• Otherwise having the right to exercise, or actually exercising, significant influence or control

b. Other requirements:

• Share capital: No minimum share capital requirement, can be any major currency, bearer share are not allow
• Registered address: must be physical address in Hong Kong and cannot be PO box
• Public information: Information about company officers (directors, shareholders and company secretary) is public

4. After incorporation:

Incorporation documents

You will be received:

• Business registration certificate (BRC): a document issued by the Business Registration Office showing details of a company and is one of the main requirements for running a business in Hong Kong.
• Certificate of incorporation: The firm's certificate will serve as proof that it is a legally constituted entity and that it, like any other incorporated company, can be located in the Hong Kong Companies Registry record with its unique given number.
• NNC: for Annual return filing - a return that contains all particulars of the company such as the registered office address, shareholders, directors, secretary,etc.
• Article of incorporation: function as a charter to establish the existence of a company in a state and put forth the key identifying and operational facts about the new organization.
• Business commencement: The communication must be in writing and include the company's contact information. Details should include the company name, type and description of the business, address, and date of establishment. 

Bank account opening

In order to meet compliance, you need to open a bank account. Based on your business entity, business industry, business type,etc , we will help you to choose the best types of bank and brand. For later steps, we will guide you in detail as the procedures are different based on different banks. Physical presence is one of the critical requirements for setting up a Hong Kong bank account with a traditional bank in Hong Kong. Rest assured that offshore company without real physical presence in Hong Kong still find many flexible EMI/Fintech banking options backed by big banks such as Aspire, Airwallex and Currenxie. G.O.C will consult and assist you with the appropriate banking choices based on your business goals and histories.

Bookkeeping, Accounting, and Tax Service

Businesses’ stable development requires proper cash flow management without violating the government’s laws and regulations. Hong Kong companies require to adhere to annual accounting, audit and tax filling. Therefore, our team will accompany you with a professional bookkeeping and accounting service to maintain financial data accuracy.

The advantages when outsourcing a specialized team of compliance services:

• Bookkeeping : Provide a cost-effective solution for businesses that save more time & resources than manual bookkeeping work. And you should engage in bookkeeping to keep financial records ready for year end returns requirement,
• Accounting and Tax services : You should engage in accounting and tax with professional firms to properly handle compliances that meet standard of Hong Kong government

How Much Does It Cost to Incorporate an Offshore Hong Kong Company?

In Hong Kong, forming a business necessitates a plethora of sophisticated documentation and processes. It is also worth noting that foreigners are required by Hong Kong Company Law to engage the services of a licensed corporate service provider. CONTACT G.O.C RIGHT NOW to receive the greatest offer and save time. 

Disclaimer: This guide serves as a reference tool and should not substitute legal advice. For tailored guidance, consult G.O.C's customer services.