- Choose Your Business Structure
- Desired Business Name Approval
- Prepare Registration Documents
- Submit the Application
In the last three decades, there has been a major influx of foreign investment in Hong Kong.
Every multinational wants its feet on the ground so that it can benefit from Hong Kong's growth.
Hong Kong is a sovereign nation like any other, but there tend to be fewer regulations when it comes to business formation.
The process of Canadian company registration in Hong Kong is fast, requiring only a few steps.
It seems simple enough, but how do you do it? What's the first step, where should you register, is it expensive, and what's the catch?
Canada's Legal Perspective
First, registration is not the same as the incorporation process.
It's not particularly regulated and will not be of much use when it comes to avoiding Canadian taxes.
If you're trying to avoid paying taxes, you'll want to incorporate your business in Hong Kong, which is different.
Canada has very strict rules that penalize you for doing this.
To make a long story short, Copthorne Holdings Ltd. vs. Canada was a tax ruling in which the Canadian Supreme Court determined that, subjectively, if it seems like you did something just to avoid paying taxes, it's illegal.
The result was that the Canadian government took extreme measures to pursue charges.
At any rate, registration to do business abroad is not the same as incorporation to avoid taxes, so there's no reason for Canada to regulate it.
Guide to Canadian Company Registration in Hong Kong
Registering a Canadian company in Hong Kong can be a relatively straightforward process, but it involves some specific steps and requirements. Here's a basic breakdown:
1. Choose Your Business Structure:
- Decide what type of business entity you want in Hong Kong. This could be a branch office, a subsidiary company, a representative office, or even a sole proprietorship. Business entities have their own advantages and regulations.
2. Desired Business Name Approval:
- Pick a unique company name that complies with Hong Kong regulations. Conduct a name check beforehand to ensure availability.
3. Prepare Registration Documents:
- Gather the necessary legal documents, which typically include:
- Completed company registration application form
- Certified copies of your Canadian company's incorporation documents
- Company's articles of association
- Passport copies and proof of address for directors and shareholders
- Certified copy of your company's latest financial statements
4. Submit the Application:
- Electronically submit the filled forms and documents to the Companies Registry of Hong Kong.
Additional Tips:
- Consider using a registered agent service in Hong Kong to help navigate the process.
- Be aware of potential tax implications for your Canadian company operating in Hong Kong.
Hong Kong Registration Requirements
Several small businesses enter the Hong Kong market for historical reasons.
Because Hong Kong was partnered with the U.K. for several years, it gained many benefits and freedoms that other cities may not have.
The bustling city is the most Western-like when it comes to economy and values.
The regulatory tax incentives make it an attractive place to register, even for Canadian business owners.
If you have a small business in Canada that you'd like to register in Hong Kong, there are certain rules and regulations to follow.
They are as follows:
- Register five important forms electronically or in person:
- Form NN1 – Application for Registration of a non-Hong Kong company
- A certified charter or similar documentation
- A certified copy of the company's certificate of incorporation
- A certified copy of the company's newest published accounts
- A notice to the Business Registration Office (IRBR2)
- Prove that your company has a valid business name. There are certain guidelines to follow when it comes to naming businesses in Hong Kong. Hong Kong's Company Register Office lists them here.
- Figure out if your company will be limited by any shares or guarantees. If you're not aware of the differences between the two, the Hong Kong Company Registry website is as follows:
- Company limited by shares – “The liability of members is limited by the articles of association to the amount unpaid on the shares respectively held by them.”
- Company limited by guarantee – “No share capital and the liability of members is limited by the articles of association to the amount that the members respectively undertake to contribute to the assets of the company in the event of its being wound up. Non-profit-making organizations are usually registered as guarantee companies.”
- Get a Certificate of Registration if your company is approved. You can do this online or in person.
It's important to note that registration takes around one week to process.
One Last Thing
Now you know the basics of registering in Hong Kong.
As you might imagine, the specific nuances of these steps can be somewhat complex in execution, but they aren't that complicated, and the costs are extremely reasonable.
Still, you may want to consider hiring a company that specializes in foreign company registration, incorporation, etcetera.
As a business expense, their prices are usually quite reasonable and they have the expertise to help you avoid any unexpected hiccups.
If the unexpected happens, it's always nice to have boots on the ground working in your favor.
The caveat to this is that you should always do your homework before choosing a corporate partner; most of your interactions will undoubtedly be online, and this comes with inherent security issues.
Starting any business activities in Hong Kong begins with the right company secretary.
Register your business in Hong Kong today, and you'll get approved in under 48 hours.
FAQs
No, you cannot directly convert a sole proprietorship to a corporation in Canada. A sole proprietorship and a corporation are separate legal entities.
In Canada, a federal corporation is a business entity incorporated under the Canada Business Corporations Act (CBCA). Here's what that means:
- National Presence: Federal corporations have the right to carry on business anywhere in Canada under their registered name. This is different from provincial corporations, which can only operate within the province they're incorporated in.
- Wider Name Protection: A federally approved corporate name offers greater protection against other businesses using a similar name across Canada.
- Federal Oversight: Federal corporations are overseen by the federal government's Corporations Canada agency.
Registering a Federal Corporation in Hong Kong:
Yes, you can register your Canadian federal corporation in Hong Kong. Here's what you'll need to do:
- Choose Your Business Structure
- Prepare Registration Documents
- Submit the Application
In Canada, the use of the word "Canada" in business names can be allowed, but with some limitations. Here's a breakdown:
- Generally Allowed: You can generally use "Canada" in your business name, but it depends on the context and how it's used.
- Restrictions: You cannot use "Canada" in a way that suggests a government affiliation or implies a level of authority it doesn't possess.
- Federal vs. Provincial: Registration requirements might differ slightly between federal and provincial incorporation. It's always best to check with the relevant authority (Corporations Canada or provincial registry) for specific guidelines.
