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The annual return is a document that must be filed with the Registrar of Companies (ROC) by every company in Singapore, regardless of size or nature of business. There are different organs that will or may require annual return filing and/or similar filings like standard financial reports.

This guide will walk you through the primary annual returns that exist in Singapore and what they’re all about.

Filing with Accounting and Corporate Regulatory Authority (ACRA)

The annual return is a document that must be filed by every company in Singapore, regardless of its size or the nature of its business activities. The purpose of filing an annual return is to provide information about the company’s financial position and performance during the year. It also provides information on the directors’ remuneration, shareholdings and other matters.

Companies are required to file their annual returns within 30 days after the end of each financial year.

Companies can choose to file either:

• An unaudited consolidated annual return; or
• A consolidated audited annual return.
• Unaudited Consolidated Annual Return

Note: An unaudited consolidated annual report is prepared using the accounts of all subsidiaries of the parent company. This type of annual return does not require any audit. However, it may contain errors if there have been changes to the accounting records since the last annual return was filed.

• Audited Consolidated Annual Report

Note: A consolidated audited annual report is prepared using only those subsidiary accounts which have been audited. If there has been no change to the accounting records since last year’s annual report was filed, then this type of annual return will give you more accurate results than an unaudited consolidated annual account.

In addition to providing information about your company’s financial position and operations, the annual return also contains details about the directors’ remunerations and shareholdings.

If you are the sole director of the company, you should include details about your own remuneration as well as that of your spouse.

If you are a non-resident director, you should include details of your overseas property holdings.

You should also disclose whether you hold shares in another company.

Filing with Inland Revenue Authority of Singapore (IRAS)

The annual return forms part of the tax reporting requirements under the Income Tax Act.

It is important to note that the annual return is not a tax return.

The annual return is used to prepare the company’s tax return.

There are two types of companies that need to file an annual return – taxable companies and exempt companies.

Taxable Companies

Taxable companies are subject to income tax and capital gains tax.

Exempt companies do not pay income tax or capital gains tax.

However, they still need to file an annual report with IRAS.

For example, if you run a small retail shop, you would be classified as an exempt company.

As such, you would need to file an annual statement with IRAS.

Exempt Companies

An exempt company is one that does not pay income tax or CGT.

This means that the company does not need to file an annual income tax return.

Instead, it needs to file an annual statement form with IRAS.

Holding an Annual General Meeting (AGM)

Every company must hold an AGM at least once every three years. However the ACRA may require your business to conduct an AGM annually and not less than 4 months before the Financial Year End (FYE).

At the AGM, shareholders can vote on various issues relating to the company’s affairs.

These include:

• Approval of the annual accounts;
• Voting on the appointment of directors;
• Voting on any proposed amendments to the Articles of Association;
• Voting on resolutions passed at previous meetings; and
• Any other matter specified in the Articles of Association.

Shareholders who attend the meeting can ask questions about the company’s affairs. They can also make suggestions.

To ensure transparency, the minutes of the meeting must be published along with the notice of the meeting.

For a more thorough break-down of an Annual General Meeting in Singapore, check out this article.

Keeping Annual Financial Statements in Singapore

Once the AGM has taken place, the board of directors prepares the annual accounts.

They submit these to the registrar of companies within 30 days after the end of the financial year.

The annual accounts are then submitted to IRAS within 60 days of the end of the financial period.

The annual accounts cover all aspects of the company’s finances during the financial year.

They include:

• Balance sheet;
• Statement of comprehensive income;
• Statement of changes in equity;
• Statement of cash flows;
• Notes to the accounts; and
• Other relevant explanatory notes.

The annual accounts provide a detailed breakdown of the company’s financial performance over the past 12 months.

They show how much profit or loss each item contributed towards the overall result.

The annual accounts also contain information about the company’s assets and liabilities.

In addition, they detail the amount of dividends paid by the company during the financial year. Dividends are usually declared at the beginning of the financial year. This is when the board of directors decides whether to declare a dividend or not.

If there was no dividend declared, the board of directors will explain why.

Streamlining the Filing of Annual Returns

IRAS provides a number of online services to help streamline the filing of annual returns.

You can use these services to prepare and send your annual statements to IRAS.

There are two main types of service available. These are:

Online Services – The Online Services allow you to prepare and send your documents directly from your computer. You do not have to print them off first.

Electronic Submission – The Electronic Submission allows you to upload your documents into a secure website where they can be viewed by IRAS staff.

Both of these options are free.

However, you will still need to apply all information and documentation to these channels.

You can always use your Singapore company secretary to handle this aspect of the Annual Returns task.

Open your company in Singapore with Air Corporate and our certified accountants will help your business not only register easily in Singapore, but file all relevant finances for ACRA and IRAS.

Why Singapore

A lot of entrepreneurs choose Singapore as their base because it offers many advantages.

Singapore is one of the most developed countries in Asia. It is located on the island of Singapore.

It is a major global trading hub.

Its economy is growing rapidly.

It is well connected to other parts of the world via air, sea and road transport.

This makes it easy for businesses to expand internationally.

The list could go on for ages, but if you’re already sold, talk to one of our experts and we’ll help walk you through everything you need to know and determine if Singapore is your next big move for your business.

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It makes sense that businesses would choose Singapore as their base of operations since it has one of the most competitive economies and is regarded as an Asian Tiger nation.

Singapore has one of the most business-friendly regulatory frameworks in the world, according to the World Bank. And one reason for this is because establishing a Singapore business is relatively simple.

Here, we outline the fundamental conditions for forming a Singapore private limited company.

1. Choose a Company Name

The Accounting and Corporate Regulatory Authority (ACRA) requires that all company names be submitted through their online portal for registration and approval. The proposed name cannot contain any words that are forbidden or unfavorable, nor can it be identical to any company name that already exists.

The applicant must list the activities the firm plans to undertake using the appropriate Singapore Standard Industrial Classification Code at the same time as submitting the company name.

The applicant may continue with incorporating the business when the name has been approved. After the name approval date, this must take effect within 120 days.

Please take note that in some industries, other Singapore Government departments may be notified about your naming request: for instance, applications will be sent to the Council for Estate Agencies,  when incorporating a real estate agency.

Following approval, every business correspondence must include the company name and registration number in compliance with the Companies Act.

Remember that merely registering a name does not grant the right to use it as a trademark or other form of exclusive intellectual property.

2. Choose Your Directors

Directors of the company are in charge of running its affairs. All company directors must be natural persons who are at least 18 years old, have full legal ability, and have not previously been barred from serving as directors (e.g., being bankrupt or convicted of fraud or dishonesty offences).

As a result, unlike in several other countries, foreign companies cannot serve as directors of Singaporean companies.

Every Singaporean firm must also have one director who meets the following criteria:

• Is a local resident of Singapore
• Is a natural person
• Is of full legal capacity and 18 years or older
• A citizen of Singapore, a permanent resident, an EntrePass or Employment Pass (EP) holder).

What can companies do if they want to establish themselves in Singapore but don’t have any local partners with whom to incorporate? Choosing a “nominee director” is one possibility. This professional director, who has a permanent address in Singapore, is employed by you (or a firm you engage as a subcontractor) to manage the company’s affairs in accordance with your recommendations.

The nominee director is a full legal director like any other under the Singapore Companies Act. Regardless of their contracts with you, they have full compliance obligations and duties. Of course, their cost includes this risk.

3. Choose Shareholders and Share Capital

A minimum of one share, S$1 in paid-up share capital, and one shareholder are required for all Singapore companies. The maximum number of shareholders for private limited companies is fifty.

Shareholders may include only foreigners. They are permitted to convene general meetings, call them, and adopt resolutions (e.g., altering the company constitution or replacing directors, or winding up the company).

Shares can be of different classes, including:

Ordinary shares. At least one of these is required. At shareholder general meetings, holders of ordinary shares are entitled to one vote per share.

Non-voting shares. Like ordinary shares, but with no right to vote

Preference shares. When it comes to dividend payments, these shares take precedence over ordinary shareholders. In the event of insolvency, they might be given priority. They are, in general, non-voting shares.

By submitting the required paperwork to the Singapore authorities, shares may be granted at any time. They may typically be readily transmitted to other people as well.

4. Appoint a Company Secretary

A Singapore company must appoint a “company secretary” within six months after its incorporation. The company secretary must be a natural person who is a Singapore resident. Additionally, they must possess the “requisite knowledge and experience to discharge the functions of secretary of the company” (see section 171 of the Companies Act 1967).

The company secretary is responsible for filing necessary documentation on behalf of a company, serving as the company’s administrative officer, counseling directors, and ensuring that the business complies with applicable laws. There are numerous firms in Singapore that can offer professional company secretary services.

5. Set up the Company Address

A physical Singapore address, not a PO box, must be used as the company’s registered address.

6. Prepare Registration Documents and File for Company Incorporation

Following approval of the company name, the company should prepare the necessary documents for formation, such as:

A Company Constitution. Formerly known as the “Articles of Association,” lays out the essential guidelines for the business and the interactions between important parties. If businesses choose to utilize one, they can get a standard form company constitution from ACRA.

‘Consent to act’ forms, from each director, signed by those directors

A ‘consent to act’ form for the company secretary

Identification details for all shareholders, officers and beneficial owners of the company

For the authorities to be able to identify the ultimate beneficial owners, corporate shareholders must present their certificate of registration from their home jurisdiction.

7. Obtain Business Licence (Where Necessary)

Once the company gets its certificate of incorporation, it must make sure it has the appropriate licenses or registrations that are necessary for a particular industry. For instance, Singapore prohibits businesses providing financial services from operating without a license.

8. Register for GST (Where Necessary)

Similar to the “value-added tax” (VAT) in Europe, the Goods and Services Tax (GST) is an indirect tax on businesses that provide goods and services. The business must register for GST with the Inland Revenue Authority of Singapore if anticipated revenue exceeds S$1 million in order to pay these taxes.

9. Ensure Ongoing Compliance

Directors must make sure that the company is in compliance with Singapore law once it has been registered.

This comprises:

• Filing annual tax returns
• Filing GST returns where necessary
• Filing compliance returns.

Conclusion

One of the world’s simplest places to start a business from abroad is Singapore. However, any company doing so must be mindful of specific Singapore compliance obligations (such as the requirement to have a local director, and the requirement to register for GST in certain scenarios).

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Singapore, one of the “Four Asian Dragons,” offers a wealth of opportunity for growing companies.

Due to its tax exemptions for new businesses, strong economy, well-established capital markets and financial system, and advantageous geographic location, the city-state consistently ranks as the best place in the world to conduct business.

Investors and organizations are urged to incorporate their business in Singapore if they want to increase their footprint in Asia. Continue reading to find out everything there is to know about Singapore business registration. 

Singapore company registration requirements 

Several conditions must be satisfied in order to form a corporation in Singapore. Here are some of them:

Directors 

Singapore locals and foreign nationalities are both permitted to serve as directors of Singapore companies. Corporate directors are not allowed, and companies must have at least one director who is a Singapore resident. A person who is a Singaporean citizen, a permanent resident of Singapore, or who has an employment pass is referred to as a “Singapore-resident.”

Shareholders 

In Singapore, businesses must have one shareholder at the very least and no more than 50. Shareholders may be Singaporeans, foreigners, or lawful permanent residents. Shareholders may also be corporate entities, and 100% foreign ownership is permitted. 

Company Secretary

In Singapore, a company secretary is in charge of making sure that a business abides with the appropriate rules and laws. Within six months of incorporation, businesses must name a company secretary, who must be a resident of Singapore. While maintaining statutory registers like the register of substantial shareholders, the company secretary also ensures that board members uphold their obligations to the firm.

Share Capital 

The minimum paid-up capital required to form a corporation in Singapore is S$1. The share capital may be increased at any time following registration.  

Company Name 

Singapore’s Accounting and Corporate Regulatory Authority must authorize a company’s name (ACRA). Companies are not allowed to commence business before their company name has been approved.

Registered Address 

A local registered address in Singapore, which cannot be a PO Box, is required for all companies. The local registered address should house all of a company’s official paperwork.

What are the types of companies in Singapore? 

In Singapore, there are three different kinds of businesses. Each business has unique requirements that set it apart from the competition. The following are these:

Private Limited Companies (Pte Ltd)

The most typical business structure in Singapore is a private limited company (Pte Ltd).

 A private limited company is the most advanced company structure in Singapore when compared to other business structures. In comparison to other company forms, it is also more adaptable and scalable.

Less than 50 shareholders and an inaccessible share registry are two characteristics of a private limited business.

Shareholders of this kind of business might be both individuals and organizations.

Sole Proprietorships 

Although this form of company is simple, there is more risk involved. This is because they are personally responsible for their company.

A sole proprietorship is not a separate legal entity in Singapore. As a result, the owner and the company are seen as one.

The owner may be an individual or a legal entity, but they must be either Singaporeans, residents in good standing, or EntrePass holders.

The personal assets of an owner are not shielded from a company’s business hazards under this type of structure. As a result, it is advised that potential business owners refrain from filing their organization as a sole proprietorship.

A sole proprietorship is not eligible for tax breaks and is subject to personal income tax rates.

Limited Liability Partnership (LLP)

The characteristics of partnerships and companies are combined in a limited liability partnership (LLP). An individual partner’s own liability is often constrained in this type of company. 

A limited liability partnership is held by a minimum of two partners, persons, or body corporate members and is a separate legal entity from its partners. It is customary to carry a profession, such as architects or lawyers, who seek to collaborate and build a practice in a similar industry.

 If a partner in a limited liability partnership is an individual, profits are taxed at that partner’s personal income tax rates. If the partner is a body corporate, however, profits are taxed at the corporate tax rate.

Only Singapore citizens, permanent residents, or owners of an EntrePass are eligible to form a limited liability partnership. It works best for legal entities with two to 20 partners (those above 20 partners need to register as a Pte Ltd).

Steps to establishing a new company in Singapore 

In Singapore, establishing a new business is not only quick and affordable, but it may also be completed fully online.

The three main procedures are obtaining ACRA approval for a company name, putting together the required company registration paperwork, and registering the firm with ACRA.

The only costs are a S$15 application charge for the company name with ACRA and a S$300 government fee for the firm’s registration with ACRA. 

Step 1. Approval of company name 

Companies in Singapore must have ACRA approve their name prior to registration. The following rules must be followed during this simple online process:

A company name MUST NOT:

Infringe on any trademarks 

Be identical to any existing business in Singapore 

Be classified as vulgar 

Be reserved by another business 

The approval procedure typically takes less than an hour, provided that a company name complies with ACRA rules. However, if the name is sent to another government agency for additional clearance (which may occur if the name contains regulated business words like “legal” and “financial”), this procedure could be delayed.

A company may reserve a name for up to 120 days after it has been authorized. The name gets freed and open to other parties if it is not incorporated within that time frame.

Step 2. Preparation of company registration documents 

The following step is to make sure the documents listed below are ready after a company name has been approved. ACRA stipulates that the following papers be submitted, and they must be in English or duly translated into English:

Company Constitution (formerly known as the Article of Association). The ACRA can provide you with the standard Singapore Company Constitution, which includes provisions that are thought to be fair for all parties engaged in the formation.

 Signed Consent to Act as Company Secretary by the company secretary.  

Signed Consent to Act as Company Director by each director of the company. 

Identification and residential address details that apply to each director and company shareholder. 

Corporate Service Providers of businesses are required to carry out Know Your Customer (KYC) due diligence in compliance with AML requirements. The following supporting documentation will likely be needed in order to perform this:

Verification of ID and address proof documents 

Professional background pertaining to officers and stakeholders of the proposed company

Step 3. Registration with the Singapore Company Registrar, ACRA 

A company can now register with ACRA once all of the incorporation documents have been created.

It typically takes less than an hour to complete this online process. The process could take several weeks to complete if the company registration needs to be forwarded to another government body for additional approval.

What happens after company incorporation? 

Certificate of Incorporation – ACRA will email companies a certificate of incorporation confirming their company’s registration. This is their legitimate Singapore Company Incorporation Certificate, which also has a unique business registration number for a company.

Business Profile (Bizfile) – Companies may also acquire a free business profile (Bizfile) from ACRA. This profile effectively serves as the company’s internet business card.

Business License Application – Companies could also need to submit an application for a business license after registering and before opening for business. Depending on the kind of transaction being done, this will vary.

Corporate bank account – Following successful registration, businesses can open a corporate bank account. Any of Singapore’s main banks will allow you to open this account.

Goods and Services Tax – Companies must register for the Goods and Services Tax if they anticipate having an annual revenue of more than S$1 million (GST).

Summary

There is very little red tape involved in establishing a company in Singapore, one of Asia’s top marketplaces for doing business. Singapore is one of the most alluring commercial hubs in the world due to its robust trade and investment prospects as well as its low corporate tax rate.

There is very little red tape involved in establishing a company in Singapore, one of Asia’s top marketplaces for doing business. Singapore is one of the most alluring commercial hubs in the world due to its robust trade and investment prospects as well as its low corporate tax rate.

Choosing a suitable company name, completing the necessary paperwork, and registering the business with ACRA are all steps in the registration procedure for a company in Singapore. Online completion of this procedure makes it quick, easy, and affordable.

Companies in Singapore are required to have a resident company secretary, a shareholder, and a director. Additionally, they must have a Singaporean registered address and start-up capital of at least S$1.

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Hong Kong is frequently voted the world’s freest economy due to its strategic location in the heart of Asia, as well as essential characteristics such as its low-rate tax system, developed infrastructure, and sizable foreign exchange reserves. In addition, the city remains Asia’s second-largest and the world’s third-largest recipient of Foreign Direct Investment.

Individuals and organizations who want to establish a company in Hong Kong must first meet a number of conditions, one of which is the appointment of a company secretary.

This guide explains why you need a company secretary in Hong Kong and the responsibilities that come with the role.

What is a company secretary in Hong Kong?

In Hong Kong, a company secretary serves as a company’s representative in the territory, ensuring that the firm’s operations are conducted in accordance with local legislation. A company secretary also plays an important role in a business’s administration, direction, and corporate governance in Hong Kong.

It’s crucial to distinguish between the role of a company secretary in Hong Kong and the role of a conventional “secretary” in a firm. Rather, under the Hong Kong Companies Ordinance, a company secretary guarantees that a business’s operations are compliant with all regulations and statutory laws.

A company secretary’s responsibilities also include essential engagement with the company’s shareholders and directors, as well as governmental organizations such as the Inland Revenue Department and the Registrar of Companies. 

Why is a company secretary in Hong Kong so important?

A Hong Kong company secretary is essential for a foreign business to be incorporated in Hong Kong since he or she is one of the company’s most important representatives.

This is a legal requirement; thus a foreign business can’t register in Hong Kong unless it has a company secretary. As a result, business owners who try to operate without a company secretary risk being prosecuted.

A company secretary is also the main point of contact between a firm and the Hong Kong government. A company secretary’s responsibility is to provide clarification to the administration or regulatory agencies if they have any queries or issues about the company.

There are a number of policies and regulations that must be followed by any foreign business operating in Hong Kong. By keeping up with these requirements, a company secretary may help guarantee that business owners stay on track with their financial, fiscal, and corporate obligations. As a result, business owners are better able to negotiate Hong Kong’s corporate regulations and are less prone to break them.

Who can be appointed a company secretary?

In Hong Kong, a company secretary can be either an individual or a corporation. However, there are some requirements that must be completed, including the following:

• An individual company secretary must be a Hong Kong resident.
• If a corporation is appointed as a company secretary, it must be a licensed Hong Kong Trust and Corporate Service Provider (TCSP) with a Hong Kong business address. Where a Company has a sole director, the sole director cannot be the company secretary of the Company.
• Furthermore, if a Limited Hong Kong company has a sole director, it cannot appoint another company who has the same director to act as its company secretary.

What are the responsibilities of a company secretary?

As stated previously, a company secretary’s principal responsibility in Hong Kong is to ensure that a company follows all applicable rules and regulations.

Although the Hong Kong Companies Ordinance does not spell out a company secretary’s specific responsibilities, the articles of association should lay out what is expected of this role.

In Hong Kong, a company secretary is typically expected to undertake the following duties:

Facilitate tax compliance

Facilitating tax compliance is one of the key tasks of a company secretary in Hong Kong, and it is critical to the successful operation of any company.

This can be deconstructed into the following elements:

• Inland Revenue Department (IRD) registration – After the corporate entity has been authorized to operate in Hong Kong, the company secretary must register the company with the IRD. The company secretary must also guarantee that the company’s information is on record with government.
• When dealing with advanced tax-related issues, obtain clarification or authorization from the appropriate authorities. — The company secretary is responsible for communicating with Hong Kong government authorities, notably the IRD.
• Annual tax return filing — The company secretary is required to file tax returns at the end of each year in order to avoid tax-related penalties from the Hong Kong government.

Maintain and update statutory books

In Hong Kong, a company secretary is expected to maintain all of the company’s statutory documents secured. They are also responsible for ensuring that such records are available to the Hong Kong government upon request.

 This role is described in further detail below:

Maintenance and custody of all company statutory documents

The company secretary is in charge of keeping all statutory documents and providing direct access to these when they are needed. 

Making any updates or changes to records

In the event that the company’s information change, the company secretary must ensure that the change is properly recorded. Changes in company directors, the number of shareholders, or the number of shares held by a shareholder are instances of this.

Production, publication, and distribution of company reports

The company secretary is responsible for creating and publishing a company’s account reports on a monthly and annual basis. This guarantees that shareholders are continuously informed about financial trends that affect the company’s performance.

Schedule and attend board meetings

In Hong Kong, a company secretary is responsible for scheduling and attending shareholder and board of director meetings. This includes formulating  a meeting’s agenda, preparing meeting minutes, and ensuring that proper procedures are followed and final decisions are in compliance with Hong Kong regulations.

Collaborate with stakeholders

Collaboration with numerous stakeholders, including shareholders, directors, and other officials, is an important part of every company secretary’s job. This guarantees that the company secretary is informed about new legislation and policies and is aware of when affirmative action is needed.

The company secretary must work closely with agencies whose mandates may have an impact on a company’s day-to-day operations. The Companies Registry, the Inland Revenue Department, and the Hong Kong Stock Exchange are examples of such organizations.

Post incorporation filing

Almost all companies will need to make changes to their Hong Kong incorporation at some point. A change in the company name, a change in the registered address, or the addition or removal of directors or shareholders are all examples of this.

The company secretary is responsible for preparing and filing the relevant documents that detail such changes with the registry.

What skills does a company secretary require?

From March 2018, a company secretary must have a TCSP License in addition to being a Hong Kong resident or a Hong Kong-registered corporation.

In Hong Kong, a corporate secretary should also have the following skills and characteristics:

Operational expertise

A corporate secretary’s responsibilities include counselling directors on compliance and scheduling, as well as attending board meetings. These responsibilities are critical to a company’s performance, so a company secretary must be operationally competent and have strong planning skills.

Experience in corporate government

A company secretary’s responsibilities are mostly focused on corporate governance. As a result, a company secretary should have some formal training in the field of corporate secretarial services. They should also be familiar with an organization’s regulatory framework and corporate governance.

High-level communication skills

Because most company secretary tasks entail a great deal of communication, the person or people you select for the position should be able to communicate at a high level. They must be able to communicate with managers, directors, and other stakeholders, which necessitates both communication and negotiation abilities, as well as teamwork and emotional intelligence.

Summary

When establishing a foreign company in Hong Kong, you are required by law to appoint a company secretary.

The person or organization you choose to this position guarantees that your company follows Hong Kong corporate and tax requirements. They also play an important role in the administration, direction, and corporate governance of your company’s Hong Kong activities.

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Hong Kong is an attractive market for investors and entrepreneurs from all over the world, with China and the Asia-Pacific region right on its doorstep.

The city consistently ranks as the world’s freest economy as an international economic centre with excellent technology infrastructure. The administration’s pro-business attitude, tax incentives for startups, a productive legal system, and world-class tech infrastructure have all contributed to this.

The first step in taking use of Hong Kong’s potential is to establish a company in Hong Kong. Continue reading to learn everything you need to know about business registration in Hong Kong.

Benefits of business registration in Hong Kong

Before we go into the requirements of business registration in Hong Kong, it’s crucial to understand the advantages of forming a company in the territory. These advantages are listed below:

• The procedure of forming a business in Hong Kong is quick, easy, and inexpensive. After an application is approved, the Certificates of Incorporation and Business Registration (“the Certificates”) are usually accessible within four working days.
• Hong Kong, along with Singapore, has earned a reputation as the world’s most open jurisdiction.
• According to the findings of the World Economic Forum’s Global Competitiveness Report 2019, Hong Kong is the best financial system in the world.
• In Baker McKenzie & Oxford Economics’ Global Transactions Forecast 2019, Hong Kong is ranked first in Asia-Pacific for IPO and M&A activity.
• Foreign investors can manage their Hong Kong-based company from anywhere in the world. They only require a local holding address rather than a physical address.
• Profits earned outside of Hong Kong are tax-free, but money earned in Hong Kong is subject to a 17 percent income tax rate on earnings exceeding 120,000HKD.
• Hong Kong is strategically placed in Asia, alongside many of the region’s most advanced business markets, such as China, Singapore, and South Korea.
• The city’s legal system is separate from that of Mainland China and is based on English common law. Hong Kong’s two main languages are English and Cantonese.

Types of business entity in Hong Kong

It’s critical to choose the right company type when starting a business in Hong Kong. The following are the main business types:

Limited company

• Limited businesses are one of the most common options for companies forming in Hong Kong, , as  limited companies are unrestricted in the activities that they perform.  
• Tax exemptions on income derived from overseas operations are available to limited companies in Hong Kong. Hong Kong is therefore an ideal place for establishing a holding company or a corporate headquarters.
• In Hong Kong, there are only a few prerequisites for forming a company, including only one director and one shareholder (who can be of any nationality). The presence of a resident company secretary is also required.
• Limited companies are legal entities that can conduct business independently of their owners.
• Although corporate shareholders are popular, Hong Kong company law prohibits corporate directors.
• At their annual general meetings, limited companies must present audited accounts and tax returns.
• There are no limitations for minimum share capital. In Hong Kong, incorporating a limited company does not require government approval.
• The share capital of a company can be in any currency, including the USD, EUR, GBP, and HKD.

Branch office

• Because branch offices are considered extensions of their parent corporation, they lack their own legal identity.
• A branch office is suitable for organizations who need to start doing business right away or for businesses that only sell in Hong Kong.
• The parent business bears both positive and negative financial consequences for a branch company.
• Hong Kong branch offices are allowed to conduct business within the parent company’s guidelines. They can only do business in Hong Kong if they have the necessary licenses.
• A Hong Kong branch office can open for business up to one month before registering with the Hong Kong Companies Registry.
• Within a month of opening a branch office in Hong Kong, overseas enterprises must register as a “Registered Non-Hong Kong Company.”
• In Hong Kong, branch offices are allowed to sign local sales contracts, invoice local consumers, and collect revenue from local customers.
• A Hong Kong branch office is not required to provide audited financial statements with its yearly returns and tax filings.

Representative office

• In Hong Kong, a representative office is exempt from making direct sales.
• Representative offices in Hong Kong are only allowed to conduct market research and promote the parent company’s products.
• Companies with simply a representative office in Hong Kong must hire a local distributor or agent to offer their products and services to local customers.
• Due to the limitations in business activity, a representative office is excellent for enterprises intending to enter Hong Kong to conduct market research and investigate potential opportunities.

Understanding Hong Kong business registration

The Companies Ordinance of Hong Kong can help anyone who want to register a business in Hong Kong. This is an official document that outlines the legal parameters within which businesses can operate in Hong Kong.

Here are some other facts concerning Hong Kong company registration that individuals and corporations should be aware of:

Directors

There must be at least one individual director, with no limitations or restrictions on the director’s location or country. The maximum number of directors is also uncapped.

Shareholders

In Hong Kong, a limited liability company must have at least one shareholder and a maximum of 50. Shareholders are not subject to any residence requirements.

Share Capital

In Hong Kong, there is no minimum share capital requirement for registration. With this in mind, the most frequent approach is to establish a company with HKD 10,000 share capital. Because one share in Hong Kong has a minimum paid-up capital of HKD 1.00, this capital is represented by 10,000 ordinary shares of HKD 1.00.

Tax

Hong Kong levies taxes on a territorial basis. That is, registered companies only pay corporate tax on Hong Kong-based transactions. Furthermore, there is no withholding tax on earnings and interest, nor is there any collection of tax on social security benefits, nor is there any VAT sales tax.

In Hong Kong, there are two alternatives for profit tax rates. The first is the Single-Tier Corporate Tax System, which levies a 16.5 percent tax on assessable profits on corporations and a 15% tax on unincorporated businesses. The second alternative is the Two-Tier Profits Tax Regime, which lowers the tax rate to 8.5 percent for the first $2 million in assessable profits for both companies and unincorporated businesses.

Company Secretary

A company secretary who lives in Hong Kong is required for any limited liability company. A company secretary serves as a company’s representative in Hong Kong, ensuring that the firm’s operations are conducted in accordance with local regulations. A company secretary is also responsible for keeping the firm’s statutory books and records.

Compliance

After a company has been officially registered in Hong Kong, the owners, directors, and company secretary are responsible for ensuring that accounts are properly prepared and maintained. In Hong Kong, accounts must be audited by a certified public accountant every year. Audited accounts must then be submitted to Hong Kong’s Inland Revenue Department.

Opening a Corporate Bank Account 

Companies that want to use reliable payment gateway providers like Stripe and PayPal should normally use banks in the same territory. The following documents are necessary to open an account in Hong Kong:

• Account application forms
• Corporate registration documents
• Copies of passports of major members
• Personal resume
• A bank reference letter of each major member
• A bank statement of each major member, or any related corporates
• Proof of business such as agreements, invoices, and contracts of the current company or any related one.

Documents needed for business registration in Hong Kong

Several documents must be prepared when registering a company in Hong Kong. These are outlined below:

Articles of Association

These are a set of rules that govern how a board of directors can run a business.  It’s often viewed as a contract between employees members of the company and the company.

A company registration form must also be completed with the following information:

• The company name
• The company’s registered address
• An accurate description of the company’s main activities 
• Details relating to the company’s shareholders, directors, and company secretary 
• Copies of passports and proof of residence in their respective countries are required for firms having non-Hong Kong shareholders and directors.
• Copies of local shareholders’ and directors’ identity documents should be submitted if a company has local shareholders and directors.
• A copy of the parent company’s company registration documents is required in the event of corporate shareholders.
• Company directors’ responsibilities
• Total share capital 

If any documents are provided in a language other than English, an English-translated document must be provided as well.

Summary

For any company trying to join the Asia-Pacific market, Hong Kong is one of the most important investment destinations in the world. The region’s advantageous tax system, world-class financial and technological infrastructure, and ease of company formation all contribute to this.

It is possible to form a company in Hong Kong in a few of days. There are simple rules to follow, including the presence of at least one director, shareholder, and resident company secretary. A corporate bank account is also essential for businesses.

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Learn why you need to pay attention to this particular registry when it comes to your newly registered Hong Kong company.

Governments throughout the world have been pursuing enhanced openness regarding corporate ownership following the emergence of the Panama Papers in 2016 (as depicted in the 2019 film “the Laundromat”).

There has been concern that various business structures (including companies and trusts, and usually a combination of the two) have been used to conceal who controls a company. This raises questions about whether those structures are being utilized to launder money.

The Companies (Amendment) Ordinance 2018 (“the Amendment Ordinance”), which came into effect in March 2018, created new transparency regulations for company ownership, including the development of a “Significant Controllers Register.”

We’ll explain you how to comply with the legislation in this section.

Which businesses are required to comply with the new requirements?

The new legislative requirements apply to all Hong Kong-based private limited companies.

Note that these restrictions do not apply to public limited corporations (i.e., large companies that are listed on a stock exchange) or companies formed in other jurisdictions (even if that company is registered as a business in Hong Kong).

What are the new legal requirements relating to the Significant Controllers Register? 

Private companies incorporated in Hong Kong must comply with the following requirements under the Amendment Ordinance:

• Take reasonable steps to identify and verify persons and legal bodies with significant control over the company (referred to as the “Significant Controller”).
• Keep a register of “Significant Controllers.” Law enforcement officers must be able to access this register at any time.
• Keep a copy of the Significant Controllers Register at their registered corporate office or another location in Hong Kong. The company must notify the Hong Kong Companies Registry where the register is kept within 15 days if it is not kept at the registered office.
• Maintain an up-to-date Significant Controllers Register. Any changes in ownership structures that result in a transfer of control must be documented.
• If law enforcement or other authorized entities request access, make the Significant Controllers Register available for inspection.
• Name a ‘Designated Representative,’ who will be in charge of the Significant Controllers Register in an official responsibility.

Who is the ‘Designated Representative’?

At least one person must be designated as the company’s representative (‘Designated Representative’) under the amendment ordinance. When it comes to the Significant Controller Register, this is the natural person who interacts with authorities and law enforcement. This person must be able to:

• A company member (typically a registered shareholder), director, or employee, and
• A Hong Kong resident who is a natural person, and
• A legal professional or, an accounting professional, or a Trust and Company Service Provider (TCSP) licensee. 

Who counts as a Significant Controller?

For the purposes of the register, who controls the company?

• The significant controller can be a company member who is a natural person or a registrable legal entity. This refers to a shareholder in most Hong Kong private limited companies.
• That person or entity must have ‘significant control’ over the company. 

‘Significant control,’ according to the amended ordinance, means that a person or entity either:

• Directly or indirectly, holds more than 25 percent of the shares issued for the company, or, 
• In companies registered without share capital, has the direct or indirect right to share in more than 25 percent of the capital or profits of the company
• Holds directly or indirectly more than 25% of the voting rights in the company
• Holds directly or indirectly the right to appoint or remove the majority of the directors of the company
• Has the right to exercise, or actually does exercise, significant influence or control over the company
• Has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or entity that is not a legal person, but whose trustees or members satisfy one of the other conditions listed above. 

How do I identify the Significant Controller?

As stated previously, the company must take reasonable steps to identify and determine who has considerable control over it. This covers, but is not limited to, the following items:

• Reviewing all official documents of the company, such as the register of members/shareholders, the articles of association, any shareholder agreements and company constitutions or memoranda.
• Investigating into the company’s interests. If a holding company appears to be a corporate trustee, for example, check to determine if the trust deed is publicly available and who the beneficiaries are.
• Examining into any evidence of joint agreements or rights that could lead to ‘ownership’ of the company.

Following this assessment, the company must take the following actions:

• If a company has cause to believe that a person or entity is a significant controller of the company, it must notify that person or entity within seven days after knowing or believing;
• Where a company has reason to believe that a person knows the identity of another person who has significant control over the company, give notice to that person within seven days. 

The individual or entity who receives the notice has one month to comply after receiving it.

Which particulars must be entered into the Significant Controllers Register?

The information regarding significant controllers must be entered into the register after it has been obtained.

For a registrable person, the company must enter the following information into the Significant Controllers Register:

• The person’s full legal name
• A correspondence address
• Their Hong Kong Identity card number, or in the event of someone from another country, their passport number and the nation to which it relates
• The date when the person became a ‘registrable person’ with respect to the company
• The nature of the person’s control over the company. 

It is important to document the facts in the Significant Controllers Register if the company is unable to identify or determine who the significant controllers are, or if the company does not have any significant controllers.

Inspecting the Significant Controllers Register

The company may be required to make the Significant Controllers Register available for inspection at any reasonable time.

The Police, Inland Revenue, Customs and Excise, Immigration, the Securities and Futures Commission, and the Hong Kong Monetary Authority are a few of the governmental bodies that have the authority to review the register.

Law enforcement has the right to make copies of the register in addition to inspecting it.

The right to inspect the register is not limited to law enforcement. Anyone whose name appears on it has the right to inspect it and receive a copy of it.

Failure to comply with the right of inspection is an offence that can result in penalties for the company, its employees, or its directors.

Furthermore, anyone who intentionally or recklessly makes a false, misleading, or deceptive statement in regard to the Register may face a substantial fine and up to two years in prison.

Conclusion

The Significant Controllers Register regulations must be understood by all companies incorporating in Hong Kong. Failure to comply with legal requirements can result in serious consequences.

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Singapore is one of the most attractive marketplaces in the world for investors and business owners wishing to expand their brand globally.

The city-state offers a regulatory climate that is conducive to business, a local workforce that is highly skilled, and the enforcement of intellectual property rights. Singapore’s GDP growth has been among the highest in the world, averaging 7.7 percent, thanks to these and many other factors.

Singapore has earned a reputation as one of the “Four Little Dragons of Asia” due to its strong economy, appealing tax structure, and simplicity of incorporation and operation:

The numerous advantages Singapore provides to both new and established enterprises are described in this guide. Here are some benefits of forming a business in Singapore.

1. Strategic location

Singapore is tucked away in the center of South-East Asia, adjacent to rising markets like Indonesia as well as economic titans like China and Japan.

The Changi International Airport, located in Changi, the capital of the city-state, connects to more than 330 destinations worldwide and services more than 80 international airlines. Travelers may quickly and conveniently access the majority of Asia-Pacific countries in a matter of hours. The airline industry serves about 20 million passengers annually.

In addition to having a significant number of domestic flights, Changi International Airport is home to many of the top logistics companies in the world, including FedEx and UPS. It’s also important to note that Singapore was ranked as Asia’s top location for logistics performance in the World Bank’s Logistics Performance Index, which is a global assessment of express carriers and international freight forwarders.

Additionally, Singapore’s maritime infrastructure has more than 200 shipping lines that connect to 600 ports in 123 different countries. The Port of Singapore, one of the biggest container ports in the world, sees 1.15 billion gross tonnes, or 20% of global transshipment trade, travel through its docks annually.

2. Established infrastructure 

Anyone who has been to Singapore can attest to the infrastructure’s astounding quality. This applies to all of its public parks, commercial structures, internet infrastructure, airport, highway systems, and airport.

Additionally, Singapore has seen notable improvements in its business agility and technical infrastructure. In addition, it has steadily improved in terms of financial accessibility and support for regulatory frameworks that foster technology advancement as a regional digital hub.

Singapore is Asia’s top destination for infrastructure, according to data from Mercer Human Resources’ 2012 Quality of Living Survey. Singapore is ranked as the second-most digitally competitive economy in the world according to the IMD: World Digital Competitiveness Ranking 2019. 

Since most of Singapore’s infrastructure was built over the past ten years, it has a contemporary design that can accommodate the expanding needs of enterprises. It offers cutting-edge port infrastructure, the second busiest port in the world, and first-rate aviation connection to international locations, particularly the developing Asia-Pacific markets.

3. Robust economy 

Trade, industry, and finance all contribute to Singapore’s well-established free-market economy. Singapore’s city-state has a very low unemployment rate and low inflation since services make up about 80% of its GDP.

Singapore is regarded as having one of the most stable economies in the world, despite having a limited domestic market. Singapore has a high government revenue, no foreign debt, and an ongoing positive surplus mainly due to exports of the manufacturing of machinery and electronics as well as financial services. 

Singapore now boasts the most open economy in the world, according to the World Economic Forum. With exports of over S$500 billion annually, Singapore’s trade to GDP ratio is among the highest in the world. The country’s gross national savings are close to 50% of its GDP. Singapore has developed into a hub for innovation, entrepreneurship, and wealth management as a result of these reasons.

4. Favorable tax system 

The highest corporate tax rate on taxable revenue in Singapore is 17 percent, making it one of the countries with the most competitive tax systems worldwide. Singapore also has one of the lowest rates of value-added tax in the entire globe.

Capital gains are exempt from taxation, and income derived locally is subject to income tax. These firms’ foreign subsidies’ income is tax-free as well, which draws many organizations looking to establish holding corporations.

All Singapore resident corporations are qualified for partial tax exemption under the tier-based tax system for personal and company taxes. On taxable income up to S$300,000 per year, this amounts to an average tax rate of 8.5 percent.

In addition, Singapore has a vast network of investment protection agreements with the majority of nations in the world as well as Avoidance of Double Taxation Agreements (DTAs) with 62 other nations. DTAs guarantee that double taxation won’t be applied to commercial transactions between Singapore and a treaty country.

5. Support for startups 

For both domestic and foreign entrepreneurs, the Singaporean government offers a wide range of grants, funding, and subsidies. These encompass programs like Startup SG Tech, the Enterprise Development Grant, and EDB Singapore’s Innovation, R&D, and Capability Development — which aid in reducing labor costs and expanding the reach of commercial operations.

The Global Trader Programme (GTP), International Headquarters Programme (IHP), and Regional Headquarters Programme (RHP) are just a few of the business development-promoting initiatives that Singapore has put in place.

Singapore’s corporate infrastructure is cutting edge and startup-friendly, and there is a burgeoning culture of entrepreneurship there. Additionally, the nation ranks second in Asia for startup investments, and its internationally renowned tech scene rivals Silicon Valley in terms of startup talent. 

6. Easy to conduct business 

Singapore is renowned as a triple-A rated economy and a reliable site for global expansion, consistently ranking first in the World Bank’s Ease of Doing Business Report. International trade, investor protection, issuance of building licenses, and insolvency resolution are four areas where this is particularly clear.

With 128 commercial banks, 31 merchant banks, and more than 600 capital market service license holders nationwide, investors and business owners can easily access capital.

Equal chances are provided to both domestic and foreign businesses, and clear economic and regulatory policies are supported by a pro-business administration.

Due to its low regulatory burden, openness to foreign capital and technology, encouragement of free-market competition, and investment-friendly policies, Singapore has experienced steady prosperity. These elements not only contribute to Singapore’s status as a global commercial hub but also to its vibrant modern and multicultural society.

7. Fast & simple incorporation 

In Singapore, one of the marketplaces with the least amount of red tape, a company can be established with just one shareholder, one director, one local company secretary, a local address, and $1 in share capital.

Singapore’s Accounting and Corporate Regulatory Authority, which is fully automated, typically takes less than three days to incorporate a business (subject to compliance approval) (ACRA).

Choosing a business entity, establishing a company (which involves a Company Constitution and signed Consent to Act as Director and Consent to Act as Company Secretary), and creating a bank account are the three procedures necessary to incorporate a new business in Singapore. 

Although there are several possibilities, due to its marketability, “private limited companies” are the most common type of new business that registers with ACRA. Shareholders are then not responsible for losses or debts above their share capital and the corporation is recognized as a taxable entity.

ACRA offers business profiles to newly incorporated Singaporean enterprises. This computerized report, which is necessary to create a corporate bank account and apply for permits and licenses, includes information including a business’ registration number and registration date.

Summary

Singapore draws thousands of investors and businesspeople to its shores every year as a center for financial and technology innovation worldwide.

It makes sense that many are opting to incorporate their businesses in Singapore given its advantageous geographic position, robust economy, and extensive assistance for startups, including generous tax advantages.

For companies of all sizes and in all industry sectors, we offer international financial services. This covers business accounts with non-banks, accounts in the currency of the country in question, and forex services, including spot and forward contracts.

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