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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 registering a Canadian business 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 incorporating.
It’s not going to be of much use when it comes to avoiding Canadian taxes, and as a result, it’s not particularly regulated.
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 the Canadian government going to 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.
Hong Kong Registration Requirements
Several businesses enter the Hong Kong market for historical reasons.
Because Hong Kong was partnered along 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 company 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 (IRBB2)
- Prove that your company has a valid 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.
If you have any additional questions about steps to take or who to contact, the Hong Kong Company Registry Office has a FAQ page that may help.
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 it really isn’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 something unexpected does happen, 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 venture 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.
Good luck with your future Hong Kongese endeavors, and remember the old business saying – “If I could just sell one pair of socks to every person in Hong Kong…”
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