Setting Up a Company in Hong Kong

Taxation of a Hong Kong Company

Business income. The taxation of Hong Kong companies depends on whether income derives from sources and activities in Hong Kong or from sources and activities outside it. Income is regarded as Hong Kong-sourced where the company’s directors are based in Hong Kong. Income from sources and activities outside Hong Kong is not taxed, i.e. a 0% tax rate applies. Income from sources and activities in Hong Kong is subject to tax at 16.5%.

Double taxation treaties – withholding tax. Some countries have not concluded a double taxation treaty with Hong Kong, so it is always necessary to check whether withholding tax applies to a transaction between Hong Kong and a foreign entity. Even where a country does have such a treaty with Hong Kong, it is still advisable to check the withholding tax position, since licence fees, for example, may be subject to 10% withholding tax under the treaty.

Tax on the sale of a company and on dividends. Shareholders’ income, capital gains on the sale of shares and dividends from a company incorporated in Hong Kong are not taxed in Hong Kong, i.e. a 0% tax rate applies.

Anonymity of Shareholders and Directors

The shareholders and directors of Hong Kong Ltd companies are entered in publicly accessible company registers, so their identity is a matter of public record.

Share Capital

A Hong Kong company needs only $1 in share capital. Unless you instruct us otherwise, we will set up your company with share capital of $100.

Limited Liability

Neither the shareholders nor the board members of a Ltd are liable for the company’s debts or bankruptcy, meaning that personal and company assets are kept separate.

Name

The name of a Ltd company must include the word Limited or the abbreviation Ltd.

Corporate Secretary

A Hong Kong company must have at least one director and one company secretary. The secretary (an individual or a legal entity) must be resident or have its registered office in Hong Kong, whereas the director need not be resident there. A Hong Kong company may have one or more shareholders, who need not be Hong Kong residents.

Address

Every Ltd company must have a registered office and a service address in Hong Kong. Registered office and service address services, as well as mail forwarding, can be ordered when the Ltd is set up or afterwards via the contact form.

Annual obligations for a Hong Kong Ltd in subsequent years – annual registered office, – annual local company secretary, – filings with the Companies Registry / Annual Return and e-Certificate, – business registration renewal fee, including administrative fees, – filing of the business registration certificate, – annual general meeting – for an active company, accounting can be added according to the number of accounting entries – tax return according to the number of accounting entries – audit according to the number of accounting entries