FORMATION OF A LIMITED LIABILITY COMPANY IN HONG KONG

For a new incorporation it is necessary to file the Memorandum & Articles of Association with the Registrar of Companies for formal clearance of the name and thereafter the Registrar issues a Certificate of Incorporation and from that date the Company may commence business. The complete process takes approximately 10 days. We also have a stock of clean shelf corporations available for immediate use. Where it is necessary to use particular name which cannot be approved, it can be registered as a Branch, or Business Trading as, without 'Limited'.

The Memorandum of Association must be in English and contain the company's name, the objects for which the company is to be incorporated, the fact that the liability of its members is limited and the share capital and type of shares with which it is to be registered.

The Articles of Association will reflect many of the administrative regulations of the company, in particular, the way in which the Members exercise their rights, the number of Directors, their powers and the way in which shares may be transferred.

The amount of share capital must be stated together with the par value of the shares, e.g. ordinary (common), preferred, non-voting, voting, etc. Capitalization in currencies other than Hong Kong dollars is permitted. Unless otherwise instructed, we will organize the company with 10,000 ordinary shares of HK$1.00 each, of which 1 ordinary share will be issued.

The minimum number of shareholder for a private company is one.  A corporation is permitted to act as Director and there is no residency or nationality requirements.  Corposec (Hong Kong) Limited will provide nominee shareholders if requested.  Declarations of Trust will be provided to the real owners providing beneficial ownership of company. 

Minimum of one director must be appointed and over 18 aged.  A corporation is permitted to act as Director of a private company and there is no residency or nationality requirements. It is statutory requirement that a Company Secretary be appointed who, if a natural person, must be ordinarily resident in Hong Kong or if a corporate body, must have its registered office in Hong Kong. 

Companies are required to maintain a registered office in Hong Kong and a notice of situation of registered office must be filed with the Registrar of Companies within 14 days from the date of incorporation. The original Certificate of Incorporation, Annual Business Registration Certificate, the Corporate Seal must be kept in the Registered Office. 

A company must apply for Business Registration within one month of incorporation and maintain its registration annually with the required fees of US$340.  Renewal of the Business Registration Certificate will be requested around two months before expiry and a penalty of US$40 will be levied in the event of late payment. When payment is long overdue the Inland Revenue will begin legal action against the company.

The company must compile audited accounts annually who prepared by a registered Hong Kong auditor. The first audited accounts must be prepared up to date within 18 months after incorporation. Corposec (Hong Kong ) Limited is able to arrange for filing 'Nil' Profits Tax Return and 'Nil' Employers Return if the client's company has not commenced its business in Hong Kong.

The General Meeting of a company held once a year, the ordinary business of which concerns Directors, Accounts, Auditors and dividend, then an annual return made by a company and filed at the Companies Registry, explaining details of Capital, Charges, Directors, Secretary, Members and place of statutory records. If fail to file the annual return, the maximum penalty fee is US$446.

Corposec (Hong Kong) Limited may be prepared to act as bank signatory. If bank accounts are required to be opened overseas, please arrange for your bank forward the usual account opening resolution forms and signature cards.

PROFIT TAX

With effect from April 1, 2003, the rate of taxation for company profits is presently 17.5%. Companies are liable to Profit Tax based on the profit derived from a source in Hong Kong during the actual year of assessment ending March 31 or on the results of the accounting year ending in that year of assessment. A branch of a foreign corporation is liable to Profits Tax in the same way and at the same rate as a Hong Kong Company.

If a company engaged in re-invoicing negotiate and concludes contracts outside Hong Kong but does not accept orders there, any profits which arise have an off-shore source and are not normally subject to Profits Tax. Letters of Credit will be received to the Hong Kong Company from buyers in another country and the L/C will then be transferred or back-to-back to suppliers in Hong Kong or South East Asia. The Hong Kong Company will earn a price differential.

SERVICES

Our company specializes in the formation and maintenance of Hong Kong and offshore corporations. A wide range of related services is available. Please feel free to contact us for more details.