- Choose a valid company name following Hong Kong's guidelines.
- Decide on a company structure: limited by shares (most common) or by guarantee (for non-profits).
- Submit registration documents electronically.
- Collect your Certificates of Registration after approval.
For many entrepreneurs, Hong Kong's strategic location is one of the most preferred destinations to set up a business. It offers many opportunities, including a supportive government, ideal banking environments, low tax rates, and more.
On the same token, Hong Kong law provides plenty of advantages for entrepreneurs setting up an offshore company.
This guide will help you understand what an offshore company is, its benefits, and how to easily register one in Hong Kong.
What Is a Hong Kong Offshore Company?
An offshore company refers to a type of company incorporated outside of its original location or origin country with one or more headquarters in a strategic location.
In Hong Kong, offshore companies are often set up by entrepreneurs who wish to promote or run a business in other countries while taking advantage of elements such as low Hong Kong taxes or the ease of setting up a business.
Why Set Up an Offshore Company In Hong Kong?
Before we get into the benefits of offshore companies, there are many reasons why entrepreneurs prefer to have Hong Kong companies.
- Hong Kong has a flexible economy and few to no political interruptions, and it is also supportive of more companies being formed.
- The process of setting up an offshore company is straightforward, and this benefits many entrepreneurs.
- Hong Kong has several business-friendly policies in place, in addition to being a strategic location for businesses to thrive.
Benefits of Offshore Company Formation Hong Kong
Hong Kong company setup offers many benefits for entrepreneurs on an international level. Let's explore the benefits:
1. Ease of Setting Up
There's a reason Hong Kong is ranked as the ‘number one business destination' in the world. The country has a great, business-friendly environment for entrepreneurs to operate within and beyond while having reliable tax regimes.
Whether you're setting up an offshore business or other type of business entity, Hong Kong allows for 100% foreign ownership of companies. This makes the set-up process even more appealing to entrepreneurs worldwide.
2. Tax Benefits
Hong Kong is well known for its flat-rate corporate tax. Based on Corporate Income Tax, the standard profit Tax Rate in Hong Kong is 16.5%.
However, what's even better for offshore companies in Hong Kong is that some of these taxes are exempted completely. This is known as an OTC. According to the IRD, offshore companies are exempt from any sort of income earned outside of the country.
6 Steps to Incorporate an Offshore Company in Hong Kong
It's surprisingly simple. As mentioned earlier, Mainland China is keen on attracting foreign companies, so the entire registration process is extremely streamlined.
There are really only four basic steps to Hong Kong incorporation:
- Come up with a valid name for your company. Hong Kong's Companies Registry released a pdf with naming guidelines to help.
- Decide whether or not your company will be limited by shares or guarantees.
- If your company is 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. This is a rather legal topic that is outside of the scope of registering your company. However, it's logistically fairly simple.
- If your company is limited by guarantee, there is 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. Again, this is directly from the official Hong Kong Companies Registry website.
- Register these forms electronically:
- Form NN1 – Application for Registration of a non-Hong Kong company
- A certified charter or equivalent
- A certified copy of the company's certificate of incorporation or equivalent
- A certified copy of the company's latest published accounts
- Notice to the Business Registration Office (IRBB2)
- Now just collect your Certificates of Registration upon approval.
Register Your Offshore Company With Air Corporate
Hong Kong company registration typically takes no more than a week once these steps have been completed.
There are companies in Hong Kong whose sole business is guiding foreign companies through the incorporation and/or registration process, but the process is simple enough that most companies can do it on their own.
For more information, check out the Hong Kong government's Companies Registry official website.
Need help with offshore company formation in Hong Kong?
Register with Air Corporate and get a registered offshore company approved in under 48 hours.
FAQs
No, Certificates of Registration and Business Registration Certificates (BRCs) in Hong Kong are not the same, although they both play a role in business establishment. Here's the breakdown:
- Business Registration Certificate (BRC): This is a mandatory document issued by the Inland Revenue Department (IRD) in Hong Kong. It validates your business's legitimacy and assigns a unique tax identification number. It's essential for all businesses operating in Hong Kong, regardless of structure (sole proprietorship, partnership, or company).
- Certificate of Registration: This term is broader and could refer to various registrations depending on the context. In Hong Kong, it might refer to a certificate you receive upon registering a limited company with the Companies Registry. This is a different process from business registration, though sometimes they can be done simultaneously.
Hong Kong company registration doesn't require a bank account, but opening one later might be trickier for offshore companies. For complex aspects, consider getting professional help.
Yes, appointing a company secretary is mandatory by law when registering an offshore company in Hong Kong. This requirement applies to both traditional registration and acquiring a Hong Kong shelf company. There's no way around it.
