October 30th, 2020 by Vivian Au
October 23rd, 2020 by Vivian Au
Have you been required to certify some of your company or personal documents? Look no further! This article provides a complete guide to certified true copy and other forms of notarization in Hong Kong.
When engaging in any business activity, regardless of its nature, there is a requirement to provide certified true copies of certain original documents. Certified true copies may be required on various occasion such as incorporating your company, applying for a company bank account or a specific permit.
Before we discuss how you can certify your original documents, it is vital first to understand what a certified true copy is and why you need it.
What is a certified true copy?
A certified true copy is a copy of an original document that is verified as being a complete, authentic and updated copy of the original at the date of certification. The document is stamped by a qualified professional to certify that the document is a true copy of the original.
However, it is important to note that a certified true copy does not confirm the authenticity of the original document. It only certifies that the copy in question is, in fact, a true copy of the original document. Common examples of documents that require certified true copies are birth certificates, passports and a driver’s licence.
Why is a certified true copy important?
Providing a certified true copy of original documents is a requirement when engaging in most business activities in Hong Kong as well as other jurisdictions. These activities range from applying to open a corporate account in any Hong Kong-based bank to using documents made and signed in Hong Kong for international transactions. Furthermore, the use of certified true copies goes far beyond commercial and business activity. It is often used in government proceedings or for legal purposes as well.
A significant advantage of having a certified true copy is that you do not have to risk giving up the original document. Especially in the case of identity documents as you can provide an attested copy instead. This point is extremely beneficial where the document contains confidential information or is used to confirm your identity as this avoids any risk of losing or damaging the original document.
Who can certify documents in Hong Kong?
In Hong Kong, a certified true copy will normally be accepted if it is issued by:
- A certified public accountant
- A lawyer
- A public notary
Certain documents can also be certified as a true copy by:
- An authorized officer of a court in Hong Kong
- A practicing company secretary in Hong Kong
- A consular officer of your home country (for non-Hong Kong residents)
What should your certified document look like?
The certified true copy document must be signed and dated by the appropriate certifier.
The certifier has to clearly print in capitals their name along with their position on the document. The document must also explicitly indicate that the document is a true copy of the original. Please see below for a sample of certification chop.
Lastly, the certifier usually stamps the document with a certified professional chop confirming its qualification.
The difference between certified true copy and certificate of incumbency?
Certified true copy and certificate of incumbency serve different purposes.
A certificate of incumbency is a document issued by an independent third party (usually a regulated professional). Its purpose is to independently confirm certain information about your Hong Kong company.
What is a notary public?
The Hong Kong High Court appoints a notary who must also be registered with the High Court on the Register of Notaries Public. All notary publics are regulated and governed by the Hong Kong Society of Notaries.
A notary is a certified professional who certifies and attests the authenticity of a range of different documents. These documents include contracts, passports, driver’s licenses, bank statements and other business transactions as well as documents relating to the purchase or sale of a property overseas. Notaries public are usually solicitors that have been practising for at least seven years who then get qualified and get appointed as a notary.
The primary function of a notary public is to help prevent fraud which is carried out through witnessing the signing of documents and verifying the identity of those who sign the documents. This process also involves testing their awareness regarding the subject matter of the documents and judging their willingness to sign it in the first place.
Other services that a notary is generally responsible for include witnessing the declaration as Commissioner for Oaths and preparing and witnessing Powers of Attorney for a client’s use in foreign countries.
What is a notarized copy?
Notarisation is the official term used for the process used to avoid document fraud. The method of verifying documents detects any signs of fraud or elements of the document in question that needs further investigation or further clarification.
It is a necessary process for both businesses and individuals as failing to notarize a document renders it invalid and unacceptable. Firstly, this is a huge disadvantage as it can delay many business proceedings that require notarised documents. Secondly, suppose a document incorrectly notarised the first time. In that case, correcting the notarization process can be an inconvenience and quite costly as well.
The main difference is that certified true copies are only recognized within the country of certification, whereas notarized documents are globally recognized. In addition, a notary public can only certify a notarized copy.
Other forms of legalization: Apostille by the Hong Kong High Court
An alternate form of legalizing and verifying a document is through an apostille service.
You can use the apostille service to authenticate documents drafted in Hong Kong when you are required to submit them to an organization abroad. In most cases, apostilled documents will be a requirement when a resident of Hong Kong seeks to open a foreign corporate bank account.
The Hong Kong High Court provides an apostille service. The service is responsible for legalizing documents involving incorporating a company as well as documents previously signed and dated by notary publics and CPAs. There is a distinct apostille number allocated to each document which proves that the document in question is verified and authentic.
Get your certified copy
Are you required to provide someone a certified true copy of your personal or company documents?
At Air Corporate, we can help you determine who is the right person to prepare such certified copy (CPA, lawyer, notary) depending on its intended use.
Simply contact us at [email protected].
If you register your Hong Kong company with us, or appoint us as your company secretary, our certified true copy service includes the certification of your company or personal documents by a qualified partner law firm.
Focus on your business. We take care of the rest.
October 20th, 2020 by Vivian Au
Sometimes things do not work out. If you want to stop your business, deregistering your Hong Kong company is the easiest and cheapest solution.
In this guide, we will explain everything you need to know about Hong Kong company deregistration, including eligibility for deregistration and the process involved.
What is company deregistration?
In simple terms, deregistration is the fact to put an end to the existence of a company.
The company is removed from the official register of companies maintained by the Hong Kong Companies Registry.
Once a Hong Kong company is deregistered, it stands dissolved and ceases to carry on business operations.
What Hong Kong companies are eligible for deregistration?
According to the Hong Kong Companies Ordinance, only private companies or companies limited by guarantee that are defunct, and solvent can be deregistered or apply for deregistration.
A company is defunct if it is no longer functioning, and solvent, if it has no outstanding liabilities or its assets, are greater than its liabilities.
What are the reasons for deregistering a Hong Kong company?
There are various circumstances that may lead a company to be deregistered. These include:
- Inability to make a profit
- Disputes between the company’s shareholders
- The decision to stop the business
- Corporate restructuring of the company or group to which the company belongs. For instance, mergers, acquisitions, or corporate takeovers may require the deregistration
- Failure to meet up with statutory compliance requirements such as filing of annual returns or maintaining a registered office address in Hong Kong
- Inability to satisfy company’s debts or other liabilities
What conditions must be met before a Hong Kong company can apply for deregistration?
Before a Hong Kong company can be deregistered, it must satisfy certain conditions at the time of application. These conditions include:
- Its members must agree to the deregistration
- The company has not commenced operation or business or has not been in operation or carried on business during the 3 months immediately before the application
- The company has no outstanding liabilities.
- The company is not a party to any legal proceedings
- The company’s assets do not consist of any immovable property located in Hong Kong
- If the company is a holding company, none of its subsidiary’s assets consist of any immovable property located in Hong Kong.
What is the process for a Hong Kong company’s deregistration?
Hong Kong company’s deregistration may be divided into two broad stages.
The first stage is obtaining a written notice of no objection from the Commissioner of Inland Revenue Department.
The second is the actual application for deregistration to the Companies Registry.
Step 1 – Obtaining a written notice of no objection from the Inland Revenue Department
The written notice of no objection is a document that confirms that the company to be deregistered has no outstanding tax liability or obligations. It is essentially a tax clearance.
To obtain this notice of no objection, the company must apply to the Inland Revenue Department in writing, usually by filling and submitting the specified form and the company’s final audited financial statements.
Upon receipt of the application, the Inland Revenue will issue the written notice of no objection if the company is cleared of all tax obligations.
Step 2 – Actual deregistration with the HK Companies Registry
Once the notice of no objection is obtained, the company or a director/member can apply to the Companies Registry for deregistration.
The application is to be in the NDR1 form and accompanied by the notice of no objection, and any other document or information the Registrar may require.
If the application is made by the company and not a director/member, it must nominate a natural person to receive the notice of the deregistration.
Within five working days of the receipt of the application and upon confirmation that the application is in order, an approval letter for the company’s deregistration will be issued to the company.
Thereafter, the Registrar will publish a notice of the proposed deregistration in the Hong Kong Gazette requesting objections to the company’s deregistration.
If no objection is received within the specified time, the Registrar will publish a final notice declaring that the company has been deregistered and a notice of deregistration is to be given to the person who applied for the deregistration of the company or the person appointed to receive such notice.
How long does it take for a Hong Kong company to be deregistered?
The deregistration process can be completed within six months. This includes the time spent in obtaining the notice of no objection from the Inland Revenue.
What is the effect of deregistration?
Upon the publication of the notice of deregistration in the Gazette by the Registrar, the deregistered company is dissolved and ceases to exist.
Any right or asset of the company is deemed bona vacantia and will be vested in the Hong Kong Government’s Special Administrative Region.
Are there any obligations to be met during or after the deregistration process?
Before the deregistration process is completed, the company to be deregistered must continue to satisfy the statutory compliance requirements under the Companies Ordinance.
For instance, the company must continue to file annual returns, maintain a registered office, notify the Companies Registry of changes in directors or company secretary, etc.
Failure to do these will attract some penalties.
After the deregistration process is completed, the liability of the deregistered company’s directors, managers, and members survives and can still be enforced.
Also, the company’s directors are required to keep the statutory records of the deregistered company for at least six years after the deregistration.
Can a deregistered Hong Kong company be restored?
A deregistered Hong Kong company can be restored.
However, this can only be done by the Registrar where the company was deregistered (i) as a result of the mistake of the Registrar, or (ii) upon the order of a court.
In the case of restoration by order of the court, such an order can only be made if an application for restoration is brought by a relevant person within twenty years of the publication of the notice of deregistration.
Such an application can be granted by the court if it appears just for the court to do so.
The restoration process may take up to two months to be completed.
Upon restoration of a deregistered company either by the Registrar or the court, the restored company is to be treated like it was always in existence and never dissolved.
Is deregistration different from striking off?
Deregistration is not the only method for bringing a Hong Kong company’s operations to an end.
Striking off is another method for dissolving a company provided in the Companies Ordinance but it differs from deregistration.
Striking off is a statutory power usually exercised by the Registrar where the Registrar is satisfied that a Hong Kong company is no longer in operation or carrying on a business.
The Registrar can remove the name of the company from the register of companies and the company stands dissolved once its name has been struck off the register.
Deregistration on the other hand is fully voluntary as it is exercised by the members of the company.
It is not imposed by statute.
However, the Registrar plays a key role in the deregistration process.
Register with Air Corporate today and get a free business kit!
Focus on your business, we take care of the rest.
October 16th, 2020 by Vivian Au
A company secretary is a key stakeholder in the corporate governance framework of a company to ensure its operations are in accordance with the law. The title of a company secretary may give one the impression that they only perform clerical duties. In reality, though, providing company secretarial services go beyond merely facilitating compliance.
Specifically, when entrepreneurs set up a corporate entity in a new country, they need a company secretary to make sure that the incorporation and day-to-day operations are as per local law. That’s why when you register a company in Hong Kong, appointing a Hong Kong company secretary is a necessity.
According to the Hong Kong Companies Ordinance, all limited liabilities companies in Hong Kong are required to have the following:
- A registration address in Hong Kong
- A minimum of one Director
- A Company Secretary
In this article, we will share the 7 things you need to know about your Hong Kong Company Secretary.
1. What is a Company Secretary?
A company secretary is a statutory position.
Company Secretaries are in charge of the managerial and administrative duties of your company.
Your company secretary is not an employee and shall not be mistaken for a clerk.
Your company secretary holds an important position.
It ensures that your company and its operations are run in compliance with the law.
- liaising with governmental authorities (e.g. Companies Registry, Inland Revenue Department)
- communicating with the directors and shareholders regarding the administration of your company
- handling administrative matters so that your company remains in good standing at all times
Your company secretary also has other essential responsibilities that extend to the decision-making, governance, and administration process.
Even though there may be a few similarities between the functions performed by company directors and a company secretary, one cannot substitute the other. A company secretary is appointed to assist company directors with the day-to-day management of the company. But the ultimate responsibility of managing the company lies with the company directors.
2. Why Company Secretaries are important
From a regulatory perspective, your company secretary is important because it is a statutory position.
The Hong Kong Companies Ordinance s.474 makes it clear that all Hong Kong companies shall appoint a company secretary.
A statutory position also involves a certain number of statutory duties and liabilities.
From a business perspective, your company secretary should advise the company to ensure sure that it stays compliant with all applicable regulations.
Appointing a company secretary in Hong Kong can help you get a better understanding of the intricacies of local fiscal and corporate regulations.
The company secretary also acts as the company’s representative for government agencies. In case the Hong Kong administration needs to contact your company, your company secretary acts as the point of contact to provide the necessary information.
Your company secretary needs to ensure that all important documents are handled and filed on time.
This will help avoid government penalties or potential prosecution.
A good company secretary should also be able to guide you regarding the best structuring for your company and the best way to restructure your company when you need it.
3. Who can be appointed as a Hong Kong Company Secretary?
You have 2 options when hiring a company secretary for your Hong Kong company.
You can appoint an individual person as company secretary.
That person must be a resident of Hong Kong.
The law does not legally require you to hire a professional, however, it is strongly recommended to do so.
The role of the company secretary involves certain responsibilities and potential liabilities for your company, as well as for the company secretary.
Appointing a friend as company secretary for your company is therefore not a good idea.
Alternatively, we recommend that you can appoint a professional corporation as company secretary.
In that case, it must be registered in Hong Kong and hold a TCSP license issued by the Registry for Trust and Company Service Providers.
Finally, if a company is listed on the Hong Kong Stock Exchange, it should appoint a Chartered Company Secretary (non-listed companies do not need to do so).
Also, please note that if a company has only one director, the sole director cannot also act as Company Secretary for the company as well.
4. What is the role of your Hong Kong Company Secretary?
The main responsibilities of a company secretary generally include:
- Assisting with the incorporation of your Hong Kong company
- Collecting and receiving company documents sent from the government
- Maintaining your company’s statutory records (Registers of members, directors, significant controllers, company secretaries, share certificates)
- Preparing and filing Annual Returns (NAR1 Form)
- Organizing and attending board meetings
- Preparing the agenda and minutes of a board meeting and general meetings (including the annual general meeting)
- Recording share transfers and issuance of new shares
- Overseeing the procedures for the deregistration or liquidation of your company
- Assisting in Hong Kong bank account opening
- Preparing certified true copies of your company documents
- Providing a registered address for your company
- Liaising with various stakeholders of the company, including agencies such as the Companies Registry and Inland Revenue Department
- Updating relevant company records to reflect any post-incorporation changes and filing them with the Companies Registry
- Staying up to date with changes in policies and legal regulations and carrying out prompt actions needed
This list is not exhaustive.
In practice, we recommend listing the tasks assigned to your company secretary in an engagement letter or service contract.
5. What makes a good company secretary?
Most importantly, your company secretary should understand company processes, context, and policies in order to ensure that your company is always compliant with Hong Kong regulations.
Directors of a company fully depend on the company secretary to highlight administrative compliance issues within the company and to provide solutions.
This is why hiring a friend or board member with no experience for the position is not recommended.
Have you already appointed such a person to provide company secretarial services? Here’s a handy guide on what you need to do when changing your company secretary
A good company secretary will keep an eye on all the deadlines and filing requirements.
This will avoid errors or delays in the submission and filing of documents and possible penalties.
The ideal company secretary is a good communicator with excellent diplomacy skills, capable of maintaining operational competence. As an officer of the company, a company secretary also has a fiduciary duty and must act in the best interests of the company.
Since your company secretary is privy to the company’s details and serves as the custodian of company records, they should be someone whose integrity cannot be doubted.
6. Can your company secretary help with tax matters?
Your company secretary can help ensure that your company meets its tax obligations and deadlines. This includes:
- Registering the company with Inland Revenue Department (IRD) as part of the incorporation process
- Soliciting additional authorizations that your business might require on tax matters. However, your company secretary should not be mistaken with a tax advisor
- At the end of each financial year, your company secretary will help you ensure that your company files the tax returns correctly and on time
7. Appoint Air Corporate as your Hong Kong Company Secretary
Given how critical the role of a company secretary is for ensuring operations as per the legal and regulatory requirements of a country, appointing the wrong person can result in unpleasant consequences.
But gone are the days of hiring a local company secretary, who operates out of a brick-and-mortar office. Choosing a digital company secretarial service for your Hong Kong company is a smarter and more convenient way of staying on track with compliance obligations.
To ease your burden, you can appoint Air Corporate as your Hong Kong company secretary. We perform the full suite of company secretarial duties and take care of all obligations in a timely manner.
Company secretary services are provided as part of most incorporation packages Air Corporate offers. Additionally, Air Corporate provides various services to Hong Kong companies, including opening a Hong Kong company, getting a business account in 48 hours, accounting and tax services. Using our online platform, you can also get instant access to all the relevant company documents.
Even if you don’t incorporate your Hong Kong company with Air Corporate, you still can appoint us as the company secretary and enjoy our services (including the opening of a bank account in 48 hours and online).
Register your company with Air Corporate and get a free business kit!
Focus on your business, we take care of the rest.
October 9th, 2020 by Vivian Au
It is really easy to do business in Hong Kong.
The regulatory environment promotes free enterprise, as is evident from offshore company registration in Hong Kong.
Hong Kong is simply the best choice for entrepreneurs and investors when it comes to setting up an offshore company to run a business.
This article will tell you everything you should know about offshore company registration in Hong Kong.
What is a Hong Kong offshore company?
There is no legal definition for offshore companies in Hong Kong.
Generally speaking, it can be described as a company:
- taking the form of a limited liability company
- registered in Hong Kong but with no business in Hong Kong or profits derived from Kong Kong
- and therefore not subject to corporate income tax in Hong Kong
Why setting up an offshore company in Hong Kong?
Compared to most offshore jurisdictions, many investors prefer setting up an offshore company in Hong Kong because of several reasons:
1. Favourable tax regime
Hong Kong offers one of the world’s most attractive tax systems.
There are no sales taxes, VAT, GST, estate duty, or capital gains tax payable.
Offshore companies registered in Hong Kong are not subject to corporate income tax on their revenue generated outside of Hong Kong.
Onshore companies in Hong Kong are subject to a corporate income tax of a maximum of 16.5%.
Moreover, interests and dividends do not attract any withholding taxes.
Hong Kong follows global standards when it comes to tax and information transparency.
Hong Kong is not a tax haven. In fact, OECD recognizes Hong Kong as a low tax jurisdiction.
Operating a business via an offshore company registered in Hong Kong is better perceived than using a company in the BVI, Seychelles, or the likes.
3. Easy to set up a company in Hong Kong
Setting up a new company in Hong Kong is absolutely straightforward.
One does not have to deal with any red tape or bureaucratic setup.
A Hong Kong company does not require any domestic shareholder or director.
From a cost perspective, it is cheaper to register and operate a company in Hong Kong than in the BVI or the Cayman Islands.
4. No foreign exchange control
There is no foreign exchange control in Hong Kong.
Money can be moved or converted very easily.
5. No economic substance test
There is no regulation on economic substance or economic substance tests for offshore companies registered in Hong Kong.
On the contrary, companies in the BVI and other offshore jurisdictions are now subject to a yearly economic substance test.
Regulations on economic substance are difficult to navigate, with risks of high penalties in case of failure to comply.
6. Market friendly economy
For the past several years, Hong Kong has been ranked as the world’s freest economy.
The policies and legislations are based on the principles of free trade.
As a result, it is a leading financial hub for entities across the world.
The steps to register a Hong Kong Offshore Company
There are three critical steps to register an offshore company in Hong Kong:
1. Registering the company name
You must apply to the Companies Registry to obtain approval for the name of the company.
Start by looking up the availability of the proposed name.
For more information, check out our guide to selecting the right name for your company.
2. Preparing the relevant documents for incorporation
The following documents should be prepared for submission to the Companies Registry:
- Application forms for incorporation
- A copy of the articles of association of the Hong Kong offshore company
- Copies of the identity documents for the shareholders and directors of the company
- Copies of parent company registration documents for corporate shareholders or directors.
3. Undertaking the necessary compliances
Filing the incorporation documents with the Companies Registry
These documents should be submitted within 14 days of incorporating the offshore company:
- Appointment notification of directors and secretary
- A copy of the signed Letter of Consent to act as a director of the company
- any other document that the Companies Registry may request.
Setting up a Business Account
Most banks require a standard set of documents for opening a business account.
- account opening form signed by the authorized signatory of the company
- certified to be true copies of the articles of association and certificate of incorporation
- a copy of the board resolution authorizing the opening of a bank account
Hong Kong Offshore Company Corporate Structure
|Form of entity
||Private company limited by shares
|Minimum Capitalization Requirements
|| 1 HK$
|Minimum number of shareholders
|Maximum number of shareholders
|Nationality/residency of shareholders
- Natural person or corporates can be shareholders
- Can be wholly foreign-owned (WOFE)
- Not mandatory to be a national or resident of Hong Kong
- At least one director needed
- Natural person or corporates can be appointed
- Not mandatory to be a resident or a Hong Kong national
|Company Secretary Requirements
- Local company secretary needed
- Natural person or corporate residents can be appointed
- Legally exempted from taxes on income derived from business outside of Hong Kong
|Annual and ongoing compliances
- Company accounts should be audited annually
- Changes affecting the company, its shareholders, or directors should be reported to the Hong Kong Companies Registry
- Annual Returns to be filed with the Companies Registry
- Tax returns should be filed with the Inland Revenue Department’
- Business Registration Certificate to be renewed each year
- One Annual General Meeting to be held each year
Register your offshore business in Hong Kong today!
Focus on your business, we take care of the rest.
October 2nd, 2020 by Vivian Au
A company limited by guarantee in Hong Kong is the entity of choice if you want to set up a non-profit organization or a charity.
What is a Company Limited by Guarantee?
A company limited by guarantee in Hong Kong is a company without a share capital or shareholders.
Instead, it has members whose liability is restricted to the amount they agree to contribute if the company is being wound up.
What is a company limited by guarantee suitable for?
A company limited by guarantee is the right vehicle to engage in non-profit or charitable activities.
This covers companies that have the objective of promoting art, science, sports, culture, religion, education, research, or other similar objects.
All of the income and properties of a company limited by guarantee are to be applied solely towards the promotion of its object.
A company limited by guarantee can also be used as a subsidiary company set up to carry out the Corporate Social Responsibility obligations of a parent company.
What is the difference between a company limited by guarantee and a company limited by shares?
The principal difference between a company limited by guarantee and one limited by shares is that the former does not have a share capital while the latter does.
Another difference between both entities is that profits made cannot be distributed to the members in a company limited by guarantee. On the contrary, profits in the form of dividends are issued regularly to members of a company limited by shares.
Also, upon the winding of a company limited by shares, its assets are normally distributed to its shareholders. It is not the case for a company limited by guarantee.
What are the advantages of setting up a company limited by guarantee in Hong Kong?
A company limited by guarantee has a separate legal identity from its members. As such, it can sue or be sued own property, obtain loans, enter into contracts, and more in its own name.
It also enjoys perpetual succession meaning that changes in its members or directors will not affect its existence.
Finally, the liability of members of a company limited by guarantee is limited only to the amount they have undertaken to pay. This liability will only arise when the company is wound up.
What laws govern a company limited by guarantee in Hong Kong?
The principal laws which have an effect on the creation, existence, control, management, and dissolution of a company limited by guarantee are the Companies Ordinance (Cap. 622), the Inland Revenue Ordinance (Cap. 112), and common law.
What is the structure of a company limited by guarantee?
A company limited by guarantee must have at least one member.
Its member(s) can be natural persons or companies.
There are no restrictions on the nationality or residence of the members.
At any point when the company’s membership is increased, the company is required to notify the Companies Registry of this change. Members of the company may appoint proxies.
A company limited by guarantee must have at least two Directors at any given time.
A company cannot be appointed a director of a company limited by guarantee. There are no restrictions on the nationality or residence of the directors.
The directors of a company limited by guarantee in Hong Kong are bound by the general director’s duties applicable to any company registered in Hong Kong.
A company limited by guarantee must have a company secretary.
Such a company secretary can be a natural person resident in Hong Kong or a company having a registered office or a place of business in Hong Kong.
A limited liability company in Hong Kong is required to maintain a registered office address within Hong Kong.
A company limited by guarantee must have and is governed by its Articles of Association.
The Articles should notably specify the amount guaranteed by members, the object of the company, how the company assets and income are to be applied in the event of winding up, etc.
How to set up a company limited by guarantee?
In setting up a company limited by guarantee in Hong Kong, you may require the services of professionals such as us Air Corporate to initiate and conduct the registration process. Certain documents must be prepared and certain steps are to be followed.
To commence the setting up of a company limited by guarantee in Hong Kong, you need:
- Copies of the passport or ID card for each non-resident or resident member respectively plus proof of residential address. In the case of a body corporate, the certificate of incorporation and proof of the registered office address
- Copies of the passport or ID card for each non-resident or resident director respectively plus proof of residential address
- Articles of Association
- Standard incorporation Form NNC1G is available from the Hong Kong Companies Registry.
The setting up process for a Hong Kong company limited by guarantee is the same as the one applicable to any company. It is generally fast and straightforward.
Please refer to our step-by-step guide to setting up a company in Hong Kong for detailed information on the incorporation process.
What are the obligations of a company limited by guarantee in Hong Kong?
Once a company limited by guarantee is incorporated in Hong Kong, it has to consistently meet up with certain obligations including:
- Maintaining records of members, directors, debenture holders, and company secretaries
- Keeping account books and records to be audited on an annual basis
- Having annual general meetings, the first of which is to be held within nine months after the first anniversary of the company’s incorporation
- Filing annual returns and paying relevant fees
- Reporting changes to members, directors, company secretaries, and registered office addresses to the Companies Registry
Is a company limited by guarantee automatically a charity?
A company limited by guarantee in Hong Kong is not automatically treated as a charity.
For a company limited by guarantee in Hong Kong to qualify as a charity, it must follow a charitable purpose, such as:
- The relief of poverty
- The advancement of education
- The advancement of religion
- Purposes beneficial to the community
Whether a Hong Kong company limited by guarantee qualifies as a charity is to be determined by the Inland Revenue Department.
What is the benefit of a company limited by guarantee being recognized as a charity?
By the provisions of the Inland Revenue Ordinance, a company that is a charity is exempt from taxation and will be deemed to have always been exempted from tax.
Also, donations to such companies can be used to obtain tax relief.
How to be recognized as a charity?
In addition to the requirements stated above for setting up a company limited by guarantee, a charity is required to have a constitution or governing instrument that:
- Specifies its purpose
- Restricts the sharing of the income and assets of the company to its members
- Expresses how the company’s assets and income should be applied after the dissolution
- Forbids directors and other persons with powers of control over the company from receiving remuneration
- Makes the keeping of operating records compulsory
How long does it take to apply for qualification as a charity?
After a company limited by guarantee is set up in Hong Kong, the application process to qualify as a charity normally takes 3 to 6 months.
Contact our team of experts if you have questions or need assistance setting up a company limited by guarantee in Hong Kong.
With Air Corporate, focus on your business while we take care of the rest.
October 2nd, 2020 by Vivian Au
If you are a foreign company planning to explore future business opportunities in Hong Kong, registering a Representative Office (also known as RO) is a good idea.
Representative Offices are especially suitable for small to mid-sized companies to establish their presence in Hong Kong and gather valuable information about the target market before making significant investments.
However, it is important to know that such entities are prohibited from undertaking any profit-making activities or generating revenue on behalf of their foreign parent company.
While a Hong Kong Representative Office does not have an independent legal status and is exempted from registering with the Companies Registry, it is still required to obtain a Business Registration Certificate.
Registering a Representative Office is a straightforward process. This guide will tell you everything you need to know about Hong Kong Representative Office Registration.
The Basics of Hong Kong Representative Offices
Before detailing the registration procedures, it is important to take a look at several key facts about Hong Kong representative offices.
What are the permitted activities of a Hong Kong Representative Office?
An RO is like a liaison office of its parent company that is permitted to hire local staff, conduct market research to know about the market opportunities, and coordinate other activities on behalf of the parent company.
It can only operate as a cost center. It cannot conduct any business, undertake any profit-making activities, or enter into contracts in its name or on behalf of the parent company for such activities. An RO cannot create any commercial legal obligations or incurring any debt or liabilities.
However, an RO can enter into agreements with a landlord for office space, hire employees locally, or contract with utility providers for day-to-day operations.
Is there a minimum capital requirement for setting up an RO?
An RO does not have a legal personality. It does not have a capital. There is therefore no capital requirement for the registration of an RO.
Who can register an RO?
Only companies incorporated outside Hong Kong can register a Hong Kong Representative Office. A company incorporated in Hong Kong cannot open an RO.
Is it possible to choose a name for an RO?
The name should be the same as the foreign parent company. In case there is an existing Hong Kong company with the same name as the foreign parent company, the RO can have a different name.
What is the procedure for Hong Kong Representative Office Registration?
You must submit the registration application for the Business Registration Certificate to the Business Registration Office of the Inland Revenue Department. The application must be made within one month of starting the operations and state that the business carried on in Hong Kong will be of representative or liaison office.
You need to submit a duly filled Form 1 (b) along with the true certified copies of the following documents :
- Name of the foreign parent company as per its certificate of incorporation. If the name is not in English or Chinese, you also need to enclose a certified translation in English or Chinese. If there have been any changes to the name of the company, submit all the names along with the supporting documents;
- The registered office address of the foreign parent company;
- Names and signatures of the directors, managers, company secretary of the foreign parent company; and
- Certificate of incorporation issued by the appropriate authority within whose jurisdiction the foreign parent company has been incorporated.
Additionally, you should also provide proof of the identity of the chief officer of the RO.
Currently, the fee for a one-year certificate is HKD 2,250.
How long does it take to receive the registration certificate?
Usually, the certificate is issued on the next working day. Please note that you should collect it in person.
In case you are unable to collect it in person, you can authorize your representative in writing to collect it on your behalf.
Here is a sample of the Business Registration Certificate provided by the Hong Kong Inland Revenue Department.
Is the registration certificate valid for a lifetime?
The validity is for 12 months from the date of commencement as set out in the certificate. However, it is possible to request a three-year certificate by filling out appropriate forms and paying additional fees, which is currently HKD 5,950.
When should you renew the certificate?
You should renew it one month before its expiry date, whether the certificate is for one year or three years. You can renew it through post or by going in person.
Do you need to display the certificate in the office?
Yes, the Business Registration Certificate should be displayed on the premises at all times and must be clearly visible.
What are the tax filing requirements of an RO?
Since ROs are prohibited from engaging in profit-generating activities, they can either file a ‘NIL’ annual profits tax return or seek an exemption from the Inland Revenue Department from filing tax returns in the future.
Can an RO open a business bank account for its operations in Hong Kong?
You can open a bank account only once the Business Registration Certificate is issued. Banks in Hong Kong would normally request certified true copies of your Hong Kong Representative Office registration documents or a certificate of incumbency.
Our team can assist you and arrange certification by a law firm or a CPA firm.
Do ROs need to maintain any filings or statutory documents/registers?
Since ROs function as unincorporated entities, they are exempt from filing or maintaining any statutory documents with the Hong Kong Companies Registry. However, in case the RO hires any local staff, a record of such staff’s wage and employment history should be maintained.
What happens if the operations of an RO are shut down?
You must deregister the RO by notifying the Business Registration Office within one month of ceasing the operations. Please note that a Representative Office cannot be converted into a limited liability company.
Several foreign investors use ROs to test the waters in an unknown market before making a hard commitment. But managing the registration process from a foreign location can be overwhelming, which is where we can help.
Whether you are an entrepreneur, SME, or digital nomad, our team of experts at Air Corporate can guide you with Hong Kong Representative Office Registration or if you decide to set up a company in Hong Kong. You can get unlimited access to advice from our professionals about all your queries regarding incorporating a Hong Kong company.
With Air Corporate, you can focus on your business while we take care of the rest.
1. What is a Hong Kong Representative Office, and what are its primary functions?
A Hong Kong Representative Office is a non-legal entity set up by foreign companies to engage in promotional and liaison activities on behalf of the parent company. It is not allowed to carry out any profit-generating activities, sign contracts, or engage in direct sales.
The primary functions of a representative office include market research, brand promotion, and networking.
2. What are the requirements and documents needed to register a Hong Kong Representative Office?
To register a Hong Kong Representative Office, you need to provide the following documents and information:
- A completed registration application form;
- A certified copy of the parent company’s Certificate of Incorporation or its equivalent;
- A certified copy of the parent company’s Articles of Association or its equivalent;
- A valid Business Registration Certificate for the representative office;
- Proof of the parent company’s registered office address;
- Details of the authorized representative in Hong Kong, including their name, address, and identification documents.
3. What are the ongoing compliance requirements for a Hong Kong Representative Office?
Although a Hong Kong Representative Office is not permitted to engage in profit-generating activities, it still has certain ongoing compliance requirements, including:
- Renewing the Business Registration Certificate annually;
- Notifying the Companies Registry of any changes in the representative office’s information, such as the name, address, or authorized representative;
- Ensuring that the representative office’s name is displayed at the registered office address and on all official communication materials, including letterheads and business cards.
If you want to do business in Asia or with Asia, Hong Kong is simply the best place.
Fast and inexpensive
Setting up a company in Hong Kong is easy and inexpensive.
There is very limited bureaucracy, no foreign exchange control system.
It takes a few hours only to set up a new company.
Business owners enjoy maximum freedom (no minimum share capital, no mandatory local director, no restrictions for foreigners, no need to visit Hong Kong).
Attractive tax system
Hong Kong has a very competitive tax regime, with no VAT or consumption tax.
There is a 0% profit tax for offshore companies registered in Hong Kong, and a maximum of 16.5% profit tax for local companies.
Competitive business environment
Almost 1,400,000 companies have set up in Hong Kong at the end of 2019 (which is almost three times more than Singapore).
Hong Kong is also home to 340,000 local startups and SMEs.
The government is also doing a lot to support entrepreneurs and startups.
It will invest HKD 100 billion in innovation and technology in 2020.
It is, therefore, no surprise that Hong Kong is the 3rd most competitive economy according to the World Economic Forum’s Competitiveness Index 2019 and 5th according to IMD World Competitiveness Center.
In this guide, we take you through the main steps of setting up a company in Hong Kong.
Step 1: Your main contacts
When you set up your company, and after it is set up, your main contacts will be:
- Your company secretary: this will be your main contact for all issues regarding setting up a Hong Kong company, its maintenance, and its closure. Your company secretary is the point of contact and your representative to deal with the Hong Kong authorities.
- The Hong Kong Companies Registry: the Companies Registry (CR) is the government department in charge of the setting up of your company and annual filings in Hong Kong.
- The Hong Kong Inland Revenue Department: the Inland Revenue Department (IRD) is the government department in charge of taxes and duties in Hong Kong. To put it simply, every year you must file your company tax return with IRD, in order to determine with and how much tax your company needs to pay.
Step 2: Choosing a Company Secretary
What is a Company Secretary?
It is mandatory for any company in Hong Kong to appoint a Company Secretary.
The main roles of your Company Secretary are:
- Acting as the contact point between your company and the Hong Kong authorities
- Taking care of administrative formalities to ensure that your company remains in good standing with the Hong Kong authorities (preparing and submitting your company annual return in time)
- Maintaining your company statutory records (register of members, register of directors, register of significant controllers, preparing and issuing share certificates)
- Organizing and documenting the meetings of the board of directors and the general meeting
- Preparing your tax filings
- Monitoring and reporting about regulatory changes that may affect your company
Who can be appointed as your Company Secretary?
If your Company Secretary is an individual, they must reside in Hong Kong.
This means that you can appoint a friend in Hong Kong as your Company Secretary.
But you should make sure this friend is familiar with the regulatory obligations of Company Secretaries.
In order to save time and avoid problems, we recommend that you select a professional services firm as your Company Secretary.
You can find a list of qualified professional services firms from the Registry for Trust and Company Service Providers.
Step 3: Choose A Legal Form for Your Business
The next step is to decide the legal structure for your business.
The main types of entities available in Hong Kong are:
- Branch Office
- Sole proprietorship
- Company limited by guarantee
- Company limited by shares
To keep things simple, we recommend that you set up a company limited by shares, also known as a “limited liability company“.
Step 4: Pick your Company Name
You enjoy maximum freedom for your company name when setting up a company in Hong Kong.
You can select a name in Chinese (simplified characters), in English, or both.
Here are a few practical tips regarding the name of your company:
- There is no obligation to include a reference to Hong Kong in your company name
- Your company name must simply include “Limited” at the end if you set up a limited liability company
- You cannot select a name that is already used by another company. You can check by yourself if a proposed company name is available or already used. Just visit the website of the Companies Registry for an online, free and easy company name search
- If you use your company name as a brand, we strongly recommend that you register it as a trademark in Hong Kong and possibly also as a trademark in China
If you have difficulties finding a name for your business, our friends at Shopify have created this easy-to-use name generator. Give it a try!
For more information on company names, you may also check our guide to selecting a company name in Hong Kong.
Step 5: Select your registered address
You do not need to rent an actual office in order to set up your company.
Instead, you may just use a registered address provided by your Company Secretary.
If you prefer to have your own office, please note that you may not be able to use your apartment as a registered address for your company.
You can only set up a company at an office building, a commercial building, or a mixed building (both residential and office).
All correspondence from the Hong Kong government authorities will be sent to your registered address.
It is therefore important to make sure that someone (usually your Company Secretary) will receive an email you any correspondence.
Please check our post on the registered address for more information.
Step 6: Organize your company
There is no minimum amount of share capital required.
You are free to decide the currency and amount for your share capital of your company.
The general practice is to have at least one shareholder with one ordinary share issued at the formation of the company.
A Hong Kong private limited company can have from one (1) to fifty (50) shareholders.
Shareholders do not need to reside in Hong Kong.
Shareholders can consist of natural persons or companies.
Local or foreign shareholding is allowed.
Appointment of nominee shareholders is permitted.
Shareholders meetings can be held anywhere in the world.
A minimum of one individual director is required.
The other directors can be persons or companies, local or foreigners.
There is no need for the directors to reside in Hong Kong.
Directors Board meetings can be held anywhere in the world.
Board meetings can be held anywhere in the world.
Step 7: Prepare your incorporation documents
If you set up a limited liability company, the documents that you need to prepare and present are as follows:
- Form NNC1 (see attached sample)
- Form IRBR1 (see attached sample)
- Articles of Association for your company (see attached sample). You are free to create tailor-made articles of association for your Hong Kong company. However, we recommend that you use the sample because (i) its provisions are very general and standard, (ii) the Companies Registry is familiar with it, meaning that it will speed up the incorporation process.
After the incorporation is complete, you will receive the following documents confirming that your company is ready for business:
Step 8: File the incorporation documents
Setting up a company in Hong Kong is straightforward.
The application must be filed with the Companies Registry.
It can be done:
Upon successful incorporation of your company, the Companies Registry will issue the following documents:
The Certificate of Incorporation is issued by the Companies Registry.
Its purpose is to confirm the name and date of incorporation of your company.
This document does not expire.
The Business Registration Certificate is issued by the Inland Revenue Department and confirms that your company is enrolled with the tax authorities in Hong Kong.
The unique number indicated in this document is also known as the Tax Identification Number of your company.
This document is normally valid for 12 months (unless you have opted for and paid for 3 years at the time of incorporation).
It must be renewed in time in order to allow your company to remain in good standing.
If you incorporate with Air Corporate, we guarantee that you will get your Hong Kong company and Statrys business account within 24 hours.
Step 9: Obtain licenses and permits
Hong Kong is a very open and free economy.
Most companies do not require a license or permit to conduct their business.
Certain companies still need to apply for a license or permit before they can start their business.
Such an application is done after your company is set up.
Examples of sectors where a license or permit is required include banking, insurance, medical services, dealing with securities, operating a food and beverage outlet.
Please refer to the HK government website or contact us in case you need guidance about the permits and licenses required to conduct your business.
Step 10: Open your company bank account
Your company will need a company bank account to start doing business.
You can apply with traditional banks such as HSBC, DBS, or Bank of China.
But the process will be difficult if your company directors and shareholders live outside of Hong Kong.
If you are a young start-up, SME, or entrepreneur with no proof of existing business, the traditional banks will most likely reject your application.
If you want are looking for an alternative, Statrys is offering SMEs and entrepreneurs banking services without dealing with a bank.
- You can apply entirely online.
- You do not need to visit Hong Kong.
- The application process is smooth.
All you need to onboard is your company’s Business Registration and a copy of your passport, even if you are a foreigner and do not reside in Hong Kong.
Step 11: Get familiar with the onshore and offshore tax systems
Your company is automatically registered with Hong Kong’s Inland Revenue Department when it is incorporated.
Hong Kong offers a very attractive territorial tax regime.
Let’s keep it simple.
If your company does business outside Hong Kong (offshore limited liability company), it is not subject to profit tax in Hong Kong.
This is commonly known as the offshore tax system.
If your company conducts business in Hong Kong (onshore limited liability company), the profit tax rate is 8.25% on the first HK$2 million of profits, and 16.5% on everything thereafter.
In addition, your business can enjoy many tax deductions that will reduce your profit tax.
There is no VAT or capital gains tax in Hong Kong.
For more information on Hong Kong taxes, you may refer to our Complete Guide to Hong Kong Profits Tax for more information.
Step 12: Understand your annual filing obligations
You need to be aware that your company has some ongoing reporting and filing obligations during the course of its business life.
It essential that you comply with the obligations to ensure that your company remains in good standing.
Some of the annual filing obligations include:
- The filing of an annual return FORM NAR1 with the Companies Registry each year on your company’s anniversary date
- The filing of a profit tax return BIR51 with the Inland Revenue Department each year. The filing date depends on the financial year-end of your company.
You must also report to the Companies Registry certain changes regarding your company as soon as they occur.
This includes changes of directors, registered address, amount of share capital.
Register with Air Corporate today and we’ll handle all this greasy paperwork for you in less than 48 hours.