Chapter 1, Article 5 of the Hong Kong Basic Law, the constitutional document of the Hong Kong Special Administrative Region, states that:
“The socialist system and policies shall not be practised in the Hong Kong Special Administrative Region, and the previous capitalist system and way of life shall remain unchanged for 50 years.”
About Hong Kong
|Official country name||Hong Kong Special Administrative Region of the People’s Republic of China (“HKSAR”).|
|Capital||Nil (HKSAR is an inalienable part of the People’s Republic of China – Article 1 of the Basic Law of the HKSAR).|
|Time zone||UTC + 8|
|Location||HKSAR is located on China’s south coast surrounding by the South China Sea on the east, south, and west, and borders the Guangdong city of Shenzhen to the north over the Shenzhen River.|
|Structure||HKSAR consists of Hong Kong Island, the Kowloon Peninsula, the New Territories, and over 200 offshore islands, of which the largest is Lantau Island.|
|Climate||HKSAR has a humid subtropical climate. Summer (May – Oct) is hot and humid with occasional showers and thunderstorms. Typhoons come occasionally during the summer causing flooding or landslides. Winters (Nov – Feb) are mild and usually start sunny, becoming cloudier towards February; the occasional cold front brings strong, cooling winds from the north. The most temperate seasons is spring (Mar – Apr), which can be changeable, and autumn (Oct – Nov), which is generally sunny and dry.|
|Religions||No official religion (Hong Kong residents shall have freedom of religious belief and freedom to preach and to conduct and participate in religious activities in public – Article 32 of the Basic Law of the HKSAR).|
|Languages||English and Chinese are official languages (Article 9 of the Basic Law of the HKSAR).|
|Median age||Male (42.4) and Female (43.2)|
|Life expectancy||Male (81 years) and Female (86 years)|
Hong Kong Government
|Form of State||The socialist system and policies shall not be practised in the HKSAR, and the previous capitalist system and way of life shall remain unchanged for 50 years. (Article 5 of the Basic Law of the HKSAR).HKSAR enjoy a high degree of autonomy and executive, legislative and independent judicial power (Article 2 of the Basic Law of the HKSAR).|
|Head of State||Chief Executive, Mr. C. Y. Leung|
|Suffrage||There is no universal suffrage for election of Chief Executive.The Chief Executive is elected by a 1200-member Election Committee, an electoral college consisting of individuals (i.e. private citizens) and bodies (i.e. special interest groups) selected or elected within 28 functional constituencies, as prescribed in Annex I to the Basic Law.As a result of enabling legislation stemming from a public consultation in 2010, and its approval by the National People’s Congress Standing Committee in Beijing, the number of representatives was increased from 800 to 1200.The functional constituencies correspond to various sectors of the economy and society, each of which hold an internal election for a set number of electors. In the first election of the Chief Executive, the Committee consisted of only 400 members Election Committee.|
|Suffrage||Since the second term, the Election Committee was enlarged to its current size. The elected Chief Executive must then be appointed by the Central People’s Government.According to Article 46 the term of office of the Chief Executive is five years who may not serve more than two consecutive terms. If a vacancy appears mid-term, the new Chief Executive finishes up the previous Chief Executive’s term, and each person can serve for not more than two consecutive terms. The method of selecting the Chief Executive is provided under Article 45 and Annex I of the Basic Law, and the Chief Executive Election Ordinance of Hong Kong.|
|National Legislature||Legislative Council|
|Elections||Election of Legislative Council (2012) (2017 election will be subject to amendment).The total number of seats in Legislative Council which consists of (1) 35 members to be returned from Geographical Constituencies and (2) 35 members to be returned from Functional Constituencies.Register elector have 2 votes, one for Geographical Constituencies and the other one for Functional Constituencies.Further Information: http://www.elections.gov.hk/legco2012/eng/facts.html#who|
|Legal System||English common law legal system, sources of law including the Basic Law of HKSAR, Local Ordinaries, Regulations, Case Laws, interpretation of Basic Law by National People’s Congress of PRC.|
|Judicial Branch||The courts of law in Hong Kong comprise the Court of Final Appeal, the High Court (which includes the Court of Appeal and the Court of First Instance), the District Courts (which includes the Family Court) and the Magistrates’ Courts (which includes the Juvenile Court), the Coroner’s Court, the Lands Tribunal, the Labour Tribunal, the Small Claims Tribunal, and the Obscene Articles Tribunal.|
Hong Kong Economic Overview
|Total GDP||HK$1,889.8 billion (2012)|
|GDP per capita||HK$285,146 (2012)|
|Real GDP Growth||+1.4% (2012)|
|GDP Composition by sector||+4.1 (2012)|
|Economic Sectors||The four pillar economic sectors of Hong Kong are: trading and logistics (25.5% of GDP in terms of value-added in 2011), tourism (4.5%), financial services (16.1%), and professional services and other producer services (12.4%).|
|Top five trading partners|
|Current Account Balance||33.5 billion|
|Labour Force||3.8 million (2012) (61.2%)|
|Currency||Hong Kong Dollar|
|Trade||USD977 billion (2013)|
|Exports||USD456.4 billion (2013)|
|Imports||USD520.6 billion (2013)|
|No. of tourists departure||54 million|
|Fiscal year||1 April – 31 March|
Hong Kong Business Hours
|Office hours||The usual office hour for private companies is Monday to Friday, from 9:00 a.m. to 6:00 p.m.|
|Government offices||Most of Government Offices for civil services adopts the 5 day week arrangement. Different government offices may adopt different office hour arrangement.(a) Companies Registry: Monday to Friday 8:45 a.m. – 12:30 p.m.; 2:00 p.m. – 5:00 p.m.(b) Inland Revenue: Monday to Friday 8:15 a.m. – 12:30 p.m.; 1:30 p.m. – 5:30 p.m.|
|Banks||(a) The Hongkong and Shanghai Corporation Limited:|
Mon – Thu: 9:00 a.m. – 16:30 p.m.
Fri: 9:00 a.m. – 17:00 p.m.
Sat: 9:00 a.m. – 13:00 p.m.
(b) Bank of China (Hong Kong)
Mon – Fri: 9:00 a.m. – 17:00 p.m.
Sat: 9:00 a.m. – 13:00 p.m.
(c) Hang Seng Bank
Mon – Fri: 9:00 a.m. – 17:00 p.m.
Sat: 9:00 a.m. – 13:00 p.m.
|Shops||Business hours of major chain stores usually start from 10:00 a.m. to 10:00 p.m. 7 days a week|
|Public holidays of 2014 in Hong Kong|
The advantages of investing in Hong Kong benefited from the adoption of one country with two systems:
- Level playing field for all – no foreign ownership restrictions;
- Clean government and rule of law upheld by an independent judiciary;
- Free movement of capital, talent, goods and information;
- Fully convertible Hong Kong dollar separate from the Renminbi (RMB);
- Autonomous executive and legislative powers;
- Independent participation in international forums including the World Trade Organisation; and
- English and Chinese as official languages, with English the usual language of business and contracts.
Free Trade Port
Excise duties are levied only on four types of dutiable commodities, namely:
Advantages of incorporating a Hong Kong Offshore Company
Modern Corporate Law
Hong Kong has recently adopted a new Companies Ordinance (March 2014), meaning it now has possibly the most modern corporate legislation in the world. The new legislation retains the flexibility and stability associated with English common law.
Companies registered in Hong Kong are fully compliant with the strict OECD requirements on transparency.
Any profits derived from outside Hong Kong are exempt from taxation in Hong Kong.
Disadvantages of the Hong Kong jurisdiction
“Hong Kong is one of the world’s most expensive cities.”
Despite of the steady increase in supply of commercial units and the double stamp duty measure, the office rental still remain high. Colliers – Hong Kong Office Research and Forecast Report
The cost of human resources has risen due to the implementation of the Statutory Minimum Wage which is HK$ 30 per hour.
How much does it cost to open an offshore company in Hong Kong?
SPECIAL OFFER HERE:
|HONG KONG SHELF COMPANY PACKAGE|
NEW COMPANIES WITH NOMINEES IN HONG KONG
|Formation fees including annual fees for the first year |
Ready-made Hong Kong company with nominee shareholder, nominee director, and notarized Power of Attorney
instead of 3790 USD
|Fees payable from the second year|
Registered office and registered agent, nominee shareholder, nominee director and notarized Power of Attorney, Due diligence checking fee
instead of 3136 USD
(payable prior to registration)
|Incorporation fee:||239 USD|
|International authentication:||160 USD|
|Legal expenses, filing fees and stamp duties:||70 USD|
|Issuing of share certificates and initial minutes and forms:||50 USD|
|Corporate seal:||50 USD|
|Courier fees:||85 USD|
|ANNUAL FEES *|
|Registered office and local company secretary:||900 USD|
|Annual business registration and filing:||416 USD|
|Annual return filing fee:||150 USD|
|Due diligence checking fee:||100 USD|
The annual fees for the first year of existence of the company are payable prior to registration. Subsequently, the amount of 1566 USD is payable annually, beginning from the second year of existence of the company. Non-payment of the annual fees results in the company being struck off the Company Register.
The amount of 2220 USD includes the following services: formation of the company, duties payable to the local authorities for the registration of the company, registration-related administration, provision of registered office and local company secretary for one year, fixed annual tax and duty for the first year, delivery of the company documents to the relevant office of the MouxtiBay Group, a luxury handmade leather corporate kit containing the following documents:
2 x Certificate of Incorporation (one of which is certified by Apostille), Memorandum and Articles of Association with Apostille, fresh Company Particulars Report with Apostille, the appointment of first directors, minutes of the meeting of directors founding the company, minutes of shareholders’ meetings, share certificates, registers of directors and shareholders, company seal and company stamp. The price contains no hidden costs.
|Nominee Director||790 USD|
|Nominee Shareholder||290 USD|
|Extract of Public Registry + Apostille||590 USD|
|Notarial Certification||325 USD|
|Notarial Certification with Apostille||395 USD|
|Power of Attorney with Apostille Certification||490 USD|
|Certificate of Good Standing + Apostille||590 USD|
|In cases where the total number of attorneys, shareholders and beneficiaries in a company is more than 5, a supplement of 100 USD will be payable for each additional person.|
MouxtiBay is pleased to offer its clients shelf companies in Hong Kong, which are available at the same cost. In the case of purchase of a shelf company, the paperwork and documentation involved can be completed in 2-3 working days. Contact our office for details and a list of shelf companies!
Shelf companies – Hong Kong
What is a shelf company?
A shelf company is a legally established company which a law office in the jurisdiction involved has already set up at an earlier date, but which has neither carried out any activity, nor opened a bank account.
Such a company is set up with the non-concealed intention that at some point somebody will buy and operate it.
The legislation of a number of tax haven locations allows for the foundation of companies of this nature.
The only drawback of a shelf company is that it is not possible to select a name in advance (it can only be modified subsequently) since companies of this kind were registered under the names made up by the founder.
The deeds (documents) of foundation do not usually differ from those of a newly set up company, and the fee of establishment is usually the same, too.
Shelf company package in Hong Kong:
|Formation fees including annual fees for the first year|
Ready-made Hong Kong company with nominee shareholder, nominee director and notarized Power of Attorney
instead of 3790 USD
|Fees payable from the second year|
Registered office and registered agent, nominee shareholder, nominee director and notarized Power of Attorney
instead of 3136 USD
Hong Kong Company Directors, Shareholders
DIRECTORS, SHAREHOLDERS, COMPANY SECRETARY/REGISTERED AGENT, MEETINGS
|Number of Directors||Minimum 1 director, there must be at least one director who is a natural person.|
|Local Directors Required||It is not required.|
|Corporate Directors||Corporate Director is allowed.|
|Number of Shareholders||Minimum 1 shareholder and maximum 50 shareholders|
|Corporate Shareholders||Corporate shareholder is allowed.|
|Annual Meeting||The Company must hold an annual general meeting in accordance with the Companies Ordinance.|
|Locality of the Meeting||It is not restricted in Hong Kong.|
CAPITALIZATION AND SHARES
|Capitalization||Minimum HK$1 per share, there is no maximum restriction on the share capitals.|
|Paid Up Capital||There is no requirement on the minimum amount of a company’s paid-up capital under the Companies Ordinance.|
|Bearer Shares||It is not allowed.|
|Registered Shares||It is permitted.|
|Par Value Shares||No Par Value Shares.|
|Shareless Company||Company limited by guarantee; limited partnership; partnership; sole proprietorship; club/societies.|
PUBLICLY AVAILABLE INFORMATION
|Disclosure of Beneficiaries||It is not required to be disclosed.|
|Disclosure of Shareholders||Name, Address, Class of Shares and Number of current holding.|
|Disclosure of Directors||Name, Passport Number (Company Registration Number in case of corporate director), Issuing Country, and Residential Address (Registered Address in case of corporate director)|
|Disclosure of Secretary/Registered Agent||Name, Passport Number (Company Registration Number in case of Corporate Secretary), issuing Country and Residential Address (Registered Address in case of corporate secretary)|
|Disclosure of Registered Address||Corporate director and corporate company secretary are required to disclose registered address.|
Hong Kong Company Accounting & Auditing
ANNUAL RETURN, ACCOUNTING AND AUDITING, FINANCIAL STATEMENT
|Annual Return||The company must file an annual return every year within 42 days after the anniversary of the date of the company’s incorporation.|
|Accounts Required||A company’s directors must prepare for each financial year financial statements in compliance with the Companies Ordinance.|
|Audit Required||Audit of financial statements is required for all companies, including companies falling within the reporting exemption, except dormant companies.|
|Financial Statement to the Inland Reveune||For corporation, tax return together with Financial statements, Auditor’s Report and the tax computation shall be submitted to Inland Reveune.|
|Concession for Small Corporations and Businesses||A concession has been granted to small corporations and businesses to allow them not to submit the supporting documents above when lodging their returns. However, these documents must still be prepared before completion of the return and may be called for by the Inland Revenue.|
|Note:What is Small Corporation?||A SMALL corporation/business is a company which satisfies ALL the following conditions in the relevant year:(i) Its gross income does not exceed HK$2,000,000;|
(ii) It has not paid or accrued to a non-resident person any sum for the use of intellectual property specified in section 15(1)(a), (b) or (ba) of the Inland Revenue Ordinance (“IRO”);
(iii) It does not have any deemed assessable profits pursuant to section 20AE of the IRO;
(iv) Its Assessable Profits/Adjusted Loss does not include any interest, profits/loss arising from “short term debt instruments” or “medium term debt instruments” as defined in section 14A(4) of the IRO;
(v) It does not claim any tax relief pursuant to an arrangement for avoidance of double taxation specified under section 49(1) or 49(1A) of the IRO; and
(vi) It has not obtained an advance ruling on any of its tax matter in relation to that year of assessment.
|Keeping Trade Record||Section 51C of the Inland Revenue Ordinance requires every person carrying on a trade, profession or business in Hong Kong to keep sufficient records in the English or Chinese language of his income and expenditure to enable the assessable profits to be readily ascertained. Such records shall be retained for a period of not less than 7 years.|
|Financial Statement to the Company Registry||Not required for private limited companies.|
Hong Kong Company Taxation
|Annual Tax and duties||Corporations:|
16.5% on local profit
0% on profits derived from outside Hong Kong
|Ordinary Tax Base: World-wide, Local||Persons, including corporations, partnerships, trustees and bodies of persons carrying on any trade, profession or business in Hong Kong are chargeable to tax on all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong from such trade, profession or business. There is therefore no distinction made between residents and non-residents. A resident may therefore derive profits from abroad without suffering tax; conversely, a non-resident may suffer tax on profits arising in Hong Kong.Hong Kong adopts a territorial basis for taxing profits derived from a trade, profession, or business carried on in Hong Kong. Profits Tax is only charged on profits which arise in or are derived from Hong Kong. In simple terms this means that a person who carries on a business in Hong Kong but derives profits from another place is not required to pay tax in Hong Kong on those profits.Many places levy tax on a different basis. Unlike Hong Kong, they tax the world-wide profits of a business, including profits derived from an offshore source.|
|Withholding tax on interest||No withhold tax on interest|
|Withholding tax on dividends||Dividends received from a corporation are excluded from the assessable profits.|
|Withholding tax on royalties||(1.) Taxable if the licence or right of use is acquired and granted in Hong Kong.(2.) Taxable if the intellectual property is used in Hong Kong.(3.) For royalties received or accrued on or after 25 June 2004, if the intellectual property is used outside Hong Kong, taxable if the royalty payment is deductible in ascertaining the assessable profits of the payer under profits tax|
|Tax Residence Certificate||Certificate of Resident Status:A Certificate of Resident Status is a document issued by the Inland Revenue Department to a Hong Kong resident who requires proof of resident status for the purposes of claiming tax relief under the Comprehensive Double Taxation Agreements / Arrangement (DTAs).The Certificate of Resident Status should constitute a sufficient proof of the resident status of a Hong Kong resident. Generally, forms related to DTAs which are not issued by the Inland Revenue Department would not be signed / stamped except forms of Austria, Belgium and Luxembourg.In general, the following persons can apply for a Certificate of Resident Status:(1.) Individual who ordinarily resides in Hong Kong;|
(2.) Individual who stays in Hong Kong for more than 180 days during a year of assessment or for more than 300 days in two consecutive years of assessment one of which is the relevant year of assessment;
(3.) Company / partnership / trust / other body of persons incorporated or constituted in Hong Kong;
(4.) Company / partnership / trust / other body of persons incorporated or constituted outside Hong Kong but managed or controlled in Hong Kong.
|Period of Taxation||12 months, from 1 April to the 31 March of the following year.|
|Deadline of Payment of Corporate Tax||Normally the demand for the provisional tax for the current tax year will be issued together with the notice of assessment for the tax year just ended. The due dates for the payment of final tax and the provisional tax are specified on the combined notice issued by the Inland Revenue.The month in which the accounting period ends generally determines the deadline by which the company must file its tax return and financial statements for each year of assessment. Typical filing deadlines are:|
|Advance Payments||Provisional Tax|
Profits tax is chargeable on the assessable profits for each year of assessment. As the assessable profits for any particular year cannot be known until after the end of the year concerned, a provisional tax charge has to be raised. When the assessable profits for the year of assessment are subsequently ascertained, an assessment will be made and the provisional profits tax paid will be utilized to offset the tax liability under the assessment. Notice of assessment will be issued after the tax return has been filed with the tax authority.
|VAT Rate||There is no VAT in Hong Kong|
|Double Tax Treaties||Double taxation relief is available only for territories which the HKSAR has arrangements for avoidance of double taxation.|
More about Hong Kong Company
MORE ABOUT HONG KONG COMPANY
|Bank Account Opening Possibility||Directors must come to Hong Kong for opening bank account, traveling record has to be shown to the bank staff.Certified Copy of Identification document and residence information for all beneficial owners of the company are required for opening bank account.|
|Exchange Control||There are no barriers of access to the market by foreign businesses and no restrictions on capital flows into and out of Hong Kong. There are also no exchange controls.|
|Redomiliciation Procedures||Non-Hong Kong Companies RegistrationA foreign company having a place of business in Hong Kong must within one month after establishing a place of business in Hong Kong register as a non-Hong Kong Company under Part 16 of the Companies Ordinance.NN1, IRBR 2, the memorandum of articles of association of the company together with prescribed registration fee shall be lodged with the Companies Registry.|
|Legalization of Documents with Apostille||The following documents are acceptable for apostille:(1) Public documents bearing the true signature of an official party such as a Hong Kong SAR Government recognized officer;|
(2) Documents signed by a notary public or a Commissioner for Oaths in Hong Kong
|Strike off and Winding Up Procedures||Grounds for Winding up a limited company:(1) the company is unable to pay a debt of $10,000 or above;|
(2) the Court is of the opinion that it is just and equitable that the company should be wound up; or
(3) the company has by special resolution resolved that the company be wound up by the Court.A creditor, a shareholder or the company itself can file a winding-up petition against the company. A solicitor is normally instructed by the petitioner to prepare and file the winding-up petition.Overview of Compulsory Winding up Procedures (Creditor’s Petition)(1) Issuing a written demand for debt repayment to the target company(2) Presenting a winding-up petition to the Court and the company (Note)(3) Court hearing for the petition(4) Granting of winding-up order by the Court(5) Meeting of creditors and other relevant parties(6) Appointment of liquidator(7) Realization and distribution of company’s assets to the creditors(8) Release of duties for liquidator
(9) Dissolution of the company
|Strike off and Winding Up Procedures||Deregistration of a company:A company which meets the following conditions may be dissolved by applying for deregistration under section 750 of the Companies Ordinance.(1) The company must be a defunct solvent company;|
(2) all the members of the company agree to the deregistration;
(3) the company has not commenced operation or business, or has not been in operation or carried on business during the 3 months immediately before the application;
(4) the company has no outstanding liabilities;
(5) the company is not a party to any legal proceedings;
(6) the company’s assets do not consist of any immovable property situate in Hong Kong;
(7) if the company is a holding company, none of its subsidiary’s assets consist of any immovable property situate in Hong Kong; and
(8) the company has obtained a “Notice of No Objection to a Company being Deregistered” (“Notice of No Objection”) from the Commissioner of Inland Revenue.
An application for deregistration in a Form NDR1 should be delivered to the Registrar of Companies, within 3 months from the date of issue of the Notice of No Objection, together with the required fee and the Notice of No Objection.