As a record holder of the coveted title of the world’s freest economy over the last about two decades, Hong Kong is an excellent choice for incorporating a company. The island has become a magnet for foreign investments, with close to 1.4 million companies registered there by the end of 2020. The lovely thing is that most of these companies grow rapidly, reaching the neighboring markets to become revered multinationals.
Now, this is your turn to grow your company, and Hong Kong will be an excellent springboard. So, how exactly do you go about it? This post is a comprehensive guide to forming a company in Hong Kong.
A Brief about Hong Kong
Before looking at the process of company registration in Hong Kong, let’s start by understanding some important facts about this jurisdiction.
- Hong Kong is a highly developed free-market economy that is governed by positive non-interventionism.
- Some of Hong Kong’s economic strengths include a strong legal system and a sound banking system.
- Hong Kong GDP in 2021 was estimated at USD368.633 billion, about 180 times bigger compared to what was reported in the 1960s.
- GDP per capita also shot up by about 87 times between the 1960s and 2020s.
- The country’s population is 7.5 million, according to the 2021 estimates.
- Services contribute about 93.4% of the GDP, followed by industry (6.5%) and agriculture (0.1%).
Hong Kong Company Formation: What is the Process
Every fact you look at concerning Hong Kong reveals one thing: it is a jurisdiction ready for investors targeting rapid growth. So, a decision to form a company in Hong Kong will be an awesome one because you will be following in the footsteps of other successful brands on the island. Here are the main steps that you need to follow:
- Determine the Company Name
The first step in setting up a company in Hong Kong is determining the name of the business. The name can be in Chinese, English, or both. Make sure to be careful when selecting the name because it is prohibited to use a name that has already been used by another business. Once you have found a suitable name, have it reserved for your enterprise before making an application for company incorporation.
- Choose a Legal Structure
This is another crucial component when registering a company in Hong Kong, but what are the options? The business structure you select will determine how the company operates. The most preferred option is a limited liability company because it acts as a shield for personal property from seizure in the event that the business becomes bankrupt. Other options include partnerships and branch offices.
- Get a Company Secretary and Office in Hong Kong
According to the Companies Ordinance, every company in Hong Kong should have a business address and a company secretary. Note that the address has to be a physical location where all the official documents of the company can be found. In the case of a company secretary, he/she must be a resident on the island.
- Prepare all the Documents for Incorporation
Once you have the company structure and all the requirements, it is time to prepare the main documents. These include the articles of association, memorandum of understanding, and details of shareholders & directors. Make sure to also include a duly filled form for incorporation when submitting the documents for company registration in Hong Kong.
- Open a Bank Account
Getting the certificate of incorporation is not the last step in the company formation journey. In addition, you need to open a bank account to be able to pay and get paid. Also, you should apply for additional permits, where necessary.
Although the Hong Kong government has simplified the process of company registration in Hong Kong so much, it is still lengthy. For example, preparing the required long list of documents and getting a committed company secretary can be an uphill task. Instead of trying to register a company alone, the best alternative is to work with an agency of experts. Visit GMHK, one of the best agencies, for all the assistance you need with company registration and other executive functions like accounting and payroll management for success in Hong Kong.