Hong Kong is a business powerhouse.
Its free economy and limited regulations combined with its proximity to the Asian market make it a hotbed for some of the most productive, and profitable, businesses in the world.
Hong Kong’s economic keystone is its limited government intervention.
For example, incorporating in Hong Kong – the most Western-like economic region of Hong Kong – involves a corporate tax rate of around 16%, which is a fraction of the rate companies typically pay in Western nations.
In today’s economic climate where many companies are struggling to simply stay afloat, paying 5% less in taxes could mean the difference between weathering the storm and being forced into liquidation.
Either way, there are plenty of good reasons to register your company in Hong Kong, but how does it work?
What are the requirements, how long does it take, and is there anything that you should be aware of?
Will you be able to afford it, given that registration is a requirement of doing business in the world’s second-largest economy?
Australia’s Legal Perspective
Australia’s government is happy to see its corporate citizens registering in other countries.
This is because such registration is essential to operate legally in other countries, and this leads to Australian prestige and prosperity (and tax revenue).
Note that registration is not the same as incorporation – if you’re looking to dodge Australian taxes, consider incorporating your company in Hong Kong instead of merely registering.
Registering your Australian company in Hong Kong is essentially saying, “Hi, Hong Kong.
I’m an Australian company, I’m here, and I’d like to legally operate a business, pay taxes, obey the laws, et cetera.”
This is not the same as incorporating.
When you incorporate your Australian company in Hong Kong, you are creating a new entity (or changing the “citizenship” of an old one).
In effect, you are making a Hong Kong company – even though it may not be owned or even operated by any Hong Kong citizen.
This allows you to take advantage of cheaper corporate taxes in Hong Kong, but again this is very different from registration.
Hong Kong Registration Requirements
Hong Kong has made no secret of its desire for foreign investment and trade, and the Hong Kong financial system is a perfect example of how far Hong Kong is willing to go to get investments.
Hong Kong enjoys a variety of regulatory and tax advantages that make it an attractive location to register your company in Hong Kong, and registering in Hong Kong has very few requirements.
The Hong Kong Company Registry Office explains registration requirements here, but in general, companies registering in Hong Kong must:
- Have a valid name (this should be simple, but as Apple discovered with its iPads in Hong Kong, you never know). Hong Kong’s Company Register Office released a pdf with naming guidelines to help.
- Decide whether or not your company will be limited by shares or guarantees. The difference is explained on the Hong Kong Company Registry website as the following:
undefinedundefined - Register the following forms electronically (or deliver them in person):
undefinedundefinedundefinedundefinedundefined - Collect their Certificates of Registration if their registration is approved. This can be done electronically or in person.
Once all of these requirements are met, registration typically occurs within a week.
Logistics and Conclusion
Now you know the basic requirements and reasoning behind registering in Hong Kong.
Technically, you can undertake all these tasks on your own, but many companies in Hong Kong specialize in helping foreign companies register or incorporate there.
These companies are highly specialized, and they can guide you through registration, incorporation, and a wide variety of other legal loopholes.
They often offer additional services such as providing a legally permissible building for a corporate office, providing corporate secretaries, etcetera.
This guidance can be invaluable because registration in Hong Kong can be logistically challenging as you might have guessed.
Additionally, their expertise and experience can guide you through any unexpected you encounter along the way.
Registering in another country is a major legal action necessary to grow into a multinational.
You should always consult a lawyer or legal team before making any major legal decisions on your own.
In Hong Kong all businesses will require a company secretary that will help facilitate incorporation.
Register with Air Corporate today and get your business registration approved in less than 48 hours.
