Company Registration in Hong Kong. Opening a real office

*From 1 January 2023, foreign-sourced passive income such as dividends, interest, disposal gains and IP income is taxable in Hong Kong subject to various exceptions connected with economic substance and nexus in Hong Kong.

Step-by-step description of incorporation of a Hong Kong Private Company Limited by Shares:

• can be in English, or Chinese, or both English and Chinese;
• must not be identical or similar to the name of an existing company;
• must end with a suffix denoting the type of entity (“Limited”);
• company structure (director, shareholder, beneficial owner, attorney);
• share capital and distribution of shares between the shareholders (standard share capital is HKD 1 000);
• activity and geography of business.

• copy of internal passport with address page;
• copy of international passport;
• proof of address (if there is no address stamp in the internal passport).

At the meeting, it is necessary to show the original documents for verification or produce notarized copies.

Incorporation of a new company takes from 1 to 5 business days from the date of filing in Hong Kong. An apostilled set of documents will be ready in 7 to 9 business days.

Purchasing a ready-made (shelf) company will take 1 or 2 hours after the necessary documents and information is provided.

The set of documents delivered to the client upon Hong Kong company incorporation includes:

1. Certificate of Incorporation – a simple copy. The Hong Kong Registrar of Companies issues the certificate of incorporation electronically (as a secured PDF file e-signed by the Registrar’s authorized employee);
2. Business Registration Certificate – a simple copy. The Hong Kong Inland Revenue Department issues the certificate electronically (as a secured PDF file e-signed by the Inland Revenue’s authorized employee);
3. Articles of Association – a simple copy stamped FILED, with the registration number allocated to the company. It is common practice to file these with the Registrar without subscribers’ signatures because there is no such statutory requirement. The subscribers can sign the original Articles for the company file, if necessary;
4. First Resolutions of the Founder Member(s) – original;
5. First Resolutions of Director(s) – original;
6. Share Certificate – original;
7. Company seal;
8. Apostilled set including copies certified by the Hong Kong registered agent:

• Certificate of Incorporation;
• Business Registration Certificate;
• Incorporation Form (NNC1);
• Articles of Association;
• First Resolutions of the Founder Member(s);
• First Resolutions of Director(s);
• Register of Directors;
• Register of Shareholders;
• Register of Secretaries.

If the standard apostilled set (as in 8 above) does not satisfy the bank, you can order an additional set choosing one of the options below:

1) Documents certified by the Hong Kong Registrar, with apostille (each document to be certified individually):

• Certificate of Incorporation – original, certified by the Registrar, with apostille;
• Articles of Association – original, certified by the Registrar, with apostille;
• Incorporation Form (NNC1) – original, certified by the Registrar, with apostille;
• Business Registration Certificate – original, certified by the IRD, with apostille.

Such set costs USD 3 040 (we recommend double-checking the cost with the consultant at the time of ordering the documents).

It takes 3 business days to prepare it (depending on the workload of state authorities).

2) Documents certified by a Hong Kong notary, with apostille (copies of documents certified in a single bound set):

• Certificate of Incorporation;
• Business Registration Certificate;
• Incorporation Form (NNC1);
• Articles of Association;
• First Resolutions of the Founder Member(s);
• First Resolutions of Director(s);
• Register of Directors;
• Register of Shareholders;
• Register of Secretaries.

Such set costs USD 1 250 (we recommend double-checking the cost with the consultant at the time of ordering the documents).

It takes 4 business days to prepare it.

The share capital can be denominated in any currency. There is no minimum authorized share capital prescribed by law, and a Hong Kong company must issue at least 1 share, payable immediately upon issue or at the time designated by the terms of the issue and specified in the relevant resolution. No payment deadlines are set by law for the authorized share capital. Usually the share capital is HKD (Hong Kong dollar) 1 000 which is divided into shares of HKD 1.00 each. The details of shareholders and directors are filed with the public register.

Hong Kong companies must annually submit their Annual Return, tax return and audited financial statements. Neither financial statements nor tax returns are open for public inspection.

Hong Kong has a territorial tax system, meaning that a Hong Kong company is only subject to 16.5% profits tax on its income derived from a Hong Kong source, that is to say:

Trading with Mainland China does not create tax in Hong Kong (subject to the restrictions described above). In practice Hong Kong is widely used for delivery of goods to and from China.

On 1 January 2023, new provisions in relation to the companies’ foreign-sourced passive income came into operation. Under the new regime[1], starting from 2024, the following income will be regarded as derived from Hong Kong and therefore chargeable to 16.5% profits tax:

• interest,
• dividends,
• disposal gains from the sale of equity interests in an entity (disposal gains),
• intellectual property (IP) income.

There are certain exceptions applicable to companies that have adequate economic substance in Hong Kong (in relation to dividends, interest, disposal gains, and IP assets) and nexus in Hong Kong (for IP assets) or meet participation requirement (for dividends and disposal gains).

[1] Foreign-sourced Income Exemption Regime / FSIE Regime.

To assess the company’s tax burden, we recommend seeking advice from a tax specialist (which advice can be arranged upon request).

All Hong Kong companies are required to file an Employer's Return Of Remuneration And Pensions upon request from the Hong Kong Inland Revenue Department.

The Employer's Return Of Remuneration And Pensions must be submitted within a month from the date of its receipt from the IRD.

The fee for submitting this return is:

[1] For a company that has employees, the return is submitted annually.

The penalty for failure to submit the Employer’s Return Of Remuneration And Pensions is HKD 2 400 (approximately USD 310). Failure to submit this return may subsequently lead to deregistration of the company by court order.

Every company must file a special notice with the Hong Kong IRD within 30 days from the date of commencement of business, otherwise the company may be fined HKD 5 000 (approximately USD 640) and its officers may be liable to imprisonment of up to 1 year. The business commencement date is the date of company signing its first contract or issuing its first invoice, or the date of the first transaction in the company’s account.

The postal service includes:

• provision of postal address (same as the company’s registered office; it can be publicly stated as postal address);
• receiving mail, sending notifications of receipt (during the first three business days of each month);
• scanning up to 5 pages per month;
• one monthly shipment of mail to the Moscow office of GSL Law & Consulting.

The postal service fee is USD 880 per year, including one monthly shipment to the Moscow office of GSL Law & Consulting. Additional courier shipments of documents from the Hong Kong office are payable in accordance with the invoices.

The postal service includes scanning up to 5 pages of the received mail per month. Scanning any more documents than that and sending them by email is subject to separate charges (if necessary) - USD 10 / page.

SIM card

The SmarTone SIM card with a local Hong Kong number allows receiving and making calls from/to other countries under international roaming & IDD (rates). A positive balance of account is required, and even if there were no calls / expenses in the SIM card, it is necessary to top up every 180 days (minimum USD 7) in order to retain your phone number with the carrier.

The cost of getting a local SIM card without your company’s representative visiting Hong Kong is USD 610 (anonymous SIM card, no corporate contract), the courier shipment costs are payable additionally.

Individual telephone line

Personal telephone line service includes:

• installation of a telephone line with an individual phone number;
• annual maintenance;
• payable separately: per-minute billing (call forwarding to Russia is approximately USD 1.73 / min);
• secretary taking phone calls with a customized greeting, or 24/7 call forwarding;
• sending a summary of the phone call by email (when using secretary’s services);
• forwarding phone calls to a local phone number in Hong Kong;
• forwarding phone calls from Hong Kong to other countries (payable per minute based on monthly bills).

Payment is made for 2 years in advance. Under the terms of the local telephone company, the contract cannot be terminated before the expiry of two years, although in the event of a change of address it can be transferred to a new location. If it is necessary to forward calls to foreign telephone numbers, the cost of per-minute billing is paid quarterly based on the details of telephone bills. When arranging call forwarding, a deposit of 500 USD is required, which is spent on additional invoices in accordance with the per-minute billing.

The fee for having an individual telephone line is USD 2 800 for 2 years.

The fee for making an office rent agreement without physically placing there an employee is USD 675 / month. The rented address is the same as the company’s registered office.

The fee for sub-renting an office with physically placing there an employee is from USD 1 280 / month. A large bright office with the Internet and amenities is located in one of the central areas. Details of equipment and office use should be agreed individually.

The cost of renting your own office with a separate address depends on the size and location of the premises. The minimum rent is from USD 1 280 per month for an office of 12-13 sq. m. (rare offers in the rental market, office room in a remote area without amenities).

The minimum rent period is 2 years. The landlord requires a deposit equal to 2-3 monthly rents. The agency fee ranges from 0.5 to 2 monthly rents.

The services of recruiting staff are provided upon request based on business needs, employee’s duties, and work schedule. The fee for such services is 25-35% of the employee’s annual salary. The minimum wage of an employee in Hong Kong is from USD 2 500 / month.

[1] Please check with your GSL Law & Consulting consultant whether your company can open a Hong Kong bank account.

[2] The fees are valid as of March 2023.