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Set Up Your Company & Business Account in Hong Kong

Set Up Company Business Account Hong Kong

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How to Set Up Your Company & Business Account in Hong Kong?

To establish your company and business account in Hong Kong, begin by incorporating your company with the Companies Registry and appointing a company secretary and director(s). Obtain a Business Registration Certificate from the Inland Revenue Department and select a bank to open a business bank account, providing the necessary documentation. Ensure compliance with tax and regulatory requirements, maintain corporate records, and stay updated on legal obligations to operate smoothly in Hong Kong's business environment.

Make your business idea in Hong Kong come true by following a simple, step-by-step plan. Easily handle tasks like registering your company, meeting legal obligations, and setting up a bank account with confidence.

This detailed guide will provide you with the information and tools needed for a smooth Hong Kong company formation with bank account. It will also give you the confidence to start your business in the lively financial hub of Asia.

Hong Kong Company Registration

Hong Kong, a lively financial center and entry point to mainland China, provides exceptional business prospects. If you're prepared to enter this active market, establishing a company in Hong Kong is a vital move. This overview simplifies the process, leading you through the essential steps and factors for a successful Hong Kong company registration.

Types of Hong Kong Companies

Selecting the appropriate legal and organizational structure for your Hong Kong company is essential for its success.

1. Limited Liability Company (LLC): The preferred Hong Kong company option for foreign investors, providing corporate shareholders with limited liability, separating personal assets from the company's debts. This shields personal wealth in case of challenges. Choose between:

  • Public Company: Can raise capital through stock exchange shares, subject to strict regulations and higher compliance costs.
  • Private Company: Suitable for smaller businesses, with non-publicly traded shares.

2. Private Enterprise: A solo venture offering complete control but also unlimited liability, risking personal assets for company debts. Ideal for small, low-risk businesses.

3. Partnership: Involves two or more partners sharing profits and losses. There are two types:

  • General Partnership: All partners have unlimited liability.
  • Limited Liability Partnership: Allows certain partners limited liability while others retain unlimited liability, safeguarding personal assets for specific partners.

If you already own a foreign company, you have the option to establish:

1. Subsidiary: A new Hong Kong-based company owned by an existing foreign company, enjoying benefits and risks of local business. Offers flexibility and liability protection.

2. Branch: Not a separate legal entity, with the existing foreign company directly responsible for all Hong Kong activities. Simplifies administration but exposes the parent company to full liability.

3. Representative Office: Not a legal entity, primarily for market research, establishing contacts, and promoting the parent company. A way to test the waters before full company registration.

Hong Kong Companies Requirements

Starting a Hong Kong company offers exciting possibilities, but the registration process may appear overwhelming. Here, we'll simplify the minimum requirements of offshore company registration into straightforward, manageable lists!

1. Director(s)

At least one director from any country, no age restriction. Legal entities can also serve as company directors. The names and addresses of directors are recorded in the public register of directors. Take note that you can be both a director and shareholder.

2. Shareholder(s)

Hong Kong companies can have one or more shareholders, and individuals or legal entities from any country can fulfill this role. If there's only one shareholder, that person can also be assigned as the company director. Information about the shareholders is given to the local agent and recorded in the public register.

company secretary in hong kong

3. Company Secretary

This crucial role must be filled by a Hong Kong-licensed secretary. A local company secretary ensures that a business runs smoothly and follows all legal and regulatory rules. The company secretary serves as a link between the company and different government agencies, with a wide range of responsibilities.

4. Company Name

Choose between an English name or a traditional Chinese name (not simplified Chinese characters), and check the legality of your proposed company name by ensuring that it is not the same or too similar to existing registered companies. Use the e-Services Portal or e-Services Centre for a thorough company name search. Also, avoid names that could be offensive, misleading, or suggest government connections. Keep in mind that some names might need approval from the Registrar of Companies.

5. Registered Address

In Hong Kong, a registered company address is vital for businesses. According to the Companies Ordinance, it must be a physical address within the territory, serving as the official point of contact for the government and legal authorities. All crucial documents are sent there to ensure the company receives essential information. The registered address is also publicly accessible through the Hong Kong Companies Registry, allowing customers, partners, and potential investors to verify the company's legitimacy.

6. Share Capital

Share capital in a Hong Kong business is the overall money or assets that shareholders contribute in exchange for company shares. It acts as the initial financial support for the business and reflects the ownership percentage of shareholders. Unlike some countries that require a minimum share capital, Hong Kong doesn't have a legal minimum. In theory, you can start a company in Hong Kong with just one share capital valued at HKD 1, making it more accessible for startups and small businesses to begin operations without a substantial upfront capital.

7. License

Although not always required, specific activities in Hong Kong such as banking or construction may demand particular licenses. Getting these licenses indicates that your business operates within the legal guidelines established by the Hong Kong government. Make sure to research the requirements specific to your industry.

Required Documents for Hong Kong Company Registration

Registering your company in Hong Kong is an exciting move toward business success, and having the correct documents is essential. Let's go through the necessary documents for directors and shareholders (remember, you can be both):

  1. Copy of International Passport Copy: Notarized to confirm your legal identity. Ensure your passport is valid and has enough blank pages for entry stamps.
  2. Proof of Residential Address: Demonstrate your overseas physical address using valid documents like utility bills, bank statements, or credit card statements dated within the past three months.
  3. Notarized Corporate Documents: Proof of your Hong Kong company's legal existence in your home country, such as incorporation documents, articles of association, or a certificate of good standing.
  4. Passport of Representative: If not registering in person, provide a copy of the passport of the person authorized to represent your company's interests during the registration process.

Tax Compliance

Although Hong Kong typically doesn't impose capital gains tax from selling assets, there are instances where these gains could be regarded as profits and become subject to taxation under the profits tax return. After successfully registering your business in Hong Kong, ensure smooth operation and compliance with regulations by considering the following:

1. Profits Tax: This is the main tax on business profits earned in or derived from Hong Kong, income tax is currently set at a standard rate of 16.5%. There's a two-tiered system, providing a lower corporate income tax rate of 8.25% for the first HK$2 million of assessable profits.

2. Salaries Tax: This is a progressive tax applied to individual salaries earned in Hong Kong, with rates ranging from 2% to 15%. As a business owner, it's your responsibility to deduct and remit this tax on behalf of your employees.

3. Property Tax: This is an annual tax based on the assessable value of owned property in Hong Kong, typically around 15%.

4. Goods and Services Tax (GST): This is a 5% consumption tax on most goods and services supplied in Hong Kong. Note that certain transactions and businesses are exempt, so check your eligibility.

Steps on How to Register a Company in Hong Kong

1. Check Company Name

Before proceeding, make sure your chosen Hong Kong company name (English name or Chinese name) is unique and available. Use the Registrar of Companies' online search tool to prevent delays and legal issues.

2. Choose a Legal Structure

After naming your company, the next step in the company registration process is to determine the best legal form for your business. Decide whether your business will be a Hong Kong limited company, sole proprietorship, or partnership. This choice significantly influences various aspects of offshore companies, including business operations and tax filing.

3. Hire a Company Secretary

Every company in Hong Kong must have one company secretary. The company secretary is responsible for ensuring that your newly registered company maintains good standing.

4. Have a Registered Company Address

The registered address of your company is where governmental departments will send correspondence. It is common and recommended to use your company secretary's address so he or she can notify you of any new mail sent to your company.

5. Submit Documents

Collect necessary documents, including passport copies, address proof, and corporate documents (if applicable). Ensure they are notarized and translated if necessary. Submit the complete set electronically through e-Filing Services or in person at the Companies Registry.

6. Automatic Tax Registration

Upon registration, your company in Hong Kong is automatically registered with the Hong Kong Inland Revenue Department (IRD) for tax purposes, simplifying the process and ensuring compliance.

7. Receive Post-Registration Documents

After successful registration of your Hong Kong company, receive crucial documents such as the NNC1 incorporation form, Certificate of Incorporation, Business Registration Certificate, and Articles of Association. These are essential for further business activities.

8. Produce Seals and Documents

Create company seals and necessary corporate documents like share certificates. These physical representations hold legal weight and are required for various transactions. However, following the implementation of the new Companies Ordinance in 2014, having a Common Seal is no longer a requirement, and it is now up to each company to decide whether or not to have one.

9. Business License (If Needed)

Depending on your Hong Kong company industry, you may need a specific business license to operate legally. Research industry requirements and obtain the necessary license from relevant authorities.

10. Certification and Apostille

If you plan to use your company documents abroad, certify and apostille them at the Hong Kong consulate to ensure their legal validity in other countries.

11. Receive Original Documents

Once all formalities are complete, receive the original company registration documents. These are crucial for opening bank accounts, entering contracts, and managing your business affairs.

12. Open a Corporate Account

Lastly, approach a bank to open a corporate account for your business. This account will be used for financial transactions and support your business operations.

Accounting and Auditing

Keeping accurate financial records and meeting auditing requirements are crucial for any business in Hong Kong. Below are the reporting requirements:

  • Tax Returns: Every registered company in Hong Kong must submit annual tax returns to the IRD.
  • First Return: You will receive your initial tax return form from the IRD 18 months after registering your company, and it must be filed within 3 months of receipt.
  • Subsequent Returns: Subsequent tax returns are due every 12 months.

To properly prepare your Hong Kong company financial statements and successfully undergo an audit, make sure you have the following readily available:

1. Account Statements: Statements from all banks and financial institutions reflecting your company's transactions.

2. Contracts: Signed agreements with your customers and suppliers.

3. Invoices: All issued and received invoices documenting transactions.

4. Transport Documents: Any documentation related to the movement of goods (shipping bills, customs declarations, etc.).

Your accounting team or chosen provider will compile financial statements based on provided documents and accounting records. These statements undergo a thorough review and verification by a qualified Hong Kong-based auditor.

After completing the audit, the auditor issues a report assessing the accuracy and fairness of your financial statements. Finally, the audited accounts, along with the audit report, are filed with the IRD to fulfill tax and legal obligations.

Opening a Business Bank Account in Hong Kong

Using a personal bank account for business operations blurs the distinction between personal and business finances, which can raise concerns for potential partners, investors, and Hong Kong authorities. On the other hand, having a dedicated business bank account showcases professionalism and transparency. It establishes a clear separation, making accounting and record-keeping more straightforward. With a business bank account, you can easily track income and expenses, manage payroll seamlessly, and efficiently monitor cash flow.

Having a business bank account significantly simplifies the process of dealing with Hong Kong's tax regulations. All transactions go through a dedicated channel, creating a clear audit trail for tax authorities. Additionally, a well-maintained bank account with a positive transaction history contributes to building your credit profile, opening doors to future financial opportunities.

Challenges of a Business Bank Account in Hong Kong

1. To ensure the security of the banking sector, prevent illegal activities like money laundering, and comply with regulations such as anti-money laundering (AML), Hong Kong banks follow strict policies.

2. Due to the higher costs of compliance and the limited profitability in dealing with small and medium-sized enterprises (SMEs), some banks may not find serving SMEs, like a small business, with low or irregular turnovers as lucrative. Consequently, they might not be eager to provide banking services to such businesses.

3. For foreign entrepreneurs, opening business bank accounts in Hong Kong poses a practical challenge. Many Hong Kong banks require at least one company director or authorized signatory to visit the bank branch in person, incurring inconvenience and expenses.

Choosing the Right Bank

Selecting the appropriate business bank account in Hong Kong is essential for a smooth and successful operation. Choose an account that offers a user-friendly online platform and mobile app, enabling convenient financial management while on the move. Be aware that some accounts may require maintaining a minimum balance to avoid fees.

With over 100 licensed online and traditional banks in Hong Kong, you have numerous options for opening a corporate bank account. Here are some well-known and reputable banks in Hong Kong for business accounts:

  • HSBC Hong Kong - One of the largest and most established banks in Hong Kong, offering global services that encompass personal, commercial, and corporate banking.
  • DBS Bank (Hong Kong) - A prominent Asian financial services group operating in 19 markets. They provide various account types, including commercial accounts.
  • Standard Chartered - A subsidiary of Standard Chartered PLC, is one of the three banks authorized to issue Hong Kong dollar banknotes. They offer personal and business banking services.
  • Hang Seng Bank - Hang Seng Bank is a leading local bank providing comprehensive services for both personal and commercial banking.
  • Bank of China (Hong Kong) - Also known as BOCHK, it is a top-ranking bank in The Asian Banker's Asia Pacific list. It is one of the banks authorized to issue Hong Kong dollar banknotes and offers various services, including business accounts and corporate banking.
  • Citibank - Citibank Hong Kong has a significant presence in the region, serving as a key hub. It provides a wide range of banking services, including consumer, commercial, corporate, investment, private banking, and more.

Requirements for Bank Account Opening (Non-Resident)

Opening a business bank account in Hong Kong as a non-resident involves several steps and requires various documents. Here's a detailed breakdown of the requirements.

Company Account Applicant (HK registered company)

  • Certificate of Incorporation (CI): Official proof of your company's legal existence in Hong Kong.
  • Memorandum and Articles of Association (M&A) or Articles of Association (A&A): Documents outlining your company's structure, governance, and share capital.
  • Business Registration Certificate (BR): Confirmation of your company's registration for business operations in Hong Kong.
  • Bought and Sold Note and Instrument of Transfer (if applicable): Documents evidencing share purchase, relevant only if registered in Hong Kong.
  • Certificate of change of name (if any): Official documentation for name changes.
  • Organizational Chart (if multi-layered corporate structure): A diagram illustrating the company's hierarchy and ownership structure.

Corporate Shareholder (if any)

  • Certificate of Incumbency (COI): Issued within the latest 3 months, proving officers and directors of the shareholder company (if not registered in Hong Kong).
  • Certificate of Incorporation (CI), Memorandum & Articles of Association (M&A): Similar to those for the Company Account Applicant.
  • Certificate of change of name (if any): Similar to Company Account Applicant.
  • If corporate shareholder is HK registered company: Follow the same document requirements as stated above (Company Account Applicant).

Shareholders, Directors, and/or Authorized Signors

  • ID cards and Passports: Official identification documents for all individuals involved in the company.
  • Residential address proof: Recent utility bills or tax demand notes, translated into English if in another language.

Company Business Proofs

  • Business plan and product catalogue: Clear outline of business strategy and offerings.
  • Latest audited financial reports: Financial statements reflecting the company's financial health.
  • Latest tax demand notes and 3 months of bank statements: Demonstrating tax compliance and financial activity.
  • Top 3 buyers and suppliers list with documents: Listing key business partners with supporting documentation like contracts, invoices, and bills of lading.
  • Tenancy agreement and MPF records: Proof of physical office location and employee contributions to the Mandatory Provident Fund (MPF).
  • Evidence of "Business address" and/or "Principal Place of Business" (if different): Relevant proof if operational address differs from registered business address.

Director, Shareholder, and/or Ultimate Beneficial Owner's Proof of Source of Wealth:

  • Personal resume (CV): Professional background information.
  • Employment contracts and salary records: Showing income sources.
  • 3 months of personal bank statements and tax demand notes: Demonstrating financial standing and tax compliance.
  • Documents proving source of wealth: Any documents like property ownership, investment accounts, or inheritances demonstrating the origin of funds used for establishing the business.
  • Director / shareholder / Ultimate Beneficial Owner other owning company details (if applicable): Providing similar documentation for other companies owned by these individuals.

Need Help with Hong Kong Company Formation with Bank Account Opening?

Are you in need of assistance with Hong Kong company formation and business account opening? Look no further. At Air Corporate, we simplify the process for you, guiding you through each step with ease. Our services cover everything from Hong kong incorporation and getting a business registration certifcate to meeting legal requirements and setting up a bank account. With our support, you can confidently establish your business in the vibrant financial hub of Asia. Let Air Corporate be your partner in realizing your Hong Kong business ambitions.

FAQs

  1. Check Company Name
  2. Choose a Legal Structure
  3. Hire a Company Secretary
  4. Have a Registered Company Address
  5. Submit Documents
  6. Automatic Tax Registration
  7. Receive Post-Registration Documents
  8. Produce Seals and Documents
  9. Business License (If Needed)
  10. Certification and Apostille
  11. Receive Original Documents
  12. Open a Corporate Account

Yes, foreigners can set up 100% foreign-owned companies in Hong Kong. Residency is not required, but it is necessary to appoint a local resident as the company secretary.

Yes, foreigners can open bank accounts in Hong Kong, although the procedure may vary slightly from that of residents. Be prepared to submit extra documents such as your passport and proof of address. It's advisable to directly contact your selected bank for specific requirements for non-residents.

The duration to open a business bank account in Hong Kong depends on the selected bank and the complexity of your business setup. Typically, approval and account setup take about 2-4 weeks. Certain traditional banks may require all directors and/or shareholders to visit in person.

Yes, all businesses operating in Hong Kong must complete registration with the Companies Registry and Inland Revenue Department. This requirement is applicable to all business structures, such as sole proprietorships, partnerships, and limited companies.

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Vivian Au

For many years, I worked at big accounting and company secretary firms in Hong Kong. I started Air Corporate to make the life of entrepreneurs and SMEs easy.

Vivian Au

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