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Company Registration in Hong Kong. Opening a real office

Having Economic Substance in Hong Kong is a condition for opening a bank account. However, it may make a Hong Kong company a tax resident of Hong Kong. At any rate, the demand for this service brings to life the package for setting up a fully-fledged Hong Kong office.

Major advantages of doing business in Hong Kong:

World’s largest financial centre;

Developed and stable economy;

Quick company formation without visit to Hong Kong;

No exchange control;

No tax on Hong Kong companies that operate outside the country of registration (not applicable to companies with an office in Hong Kong);

No tax on Hong Kong companies, which source of income is outside the Hong Kong territory;

Not ‘blacklisted’ by most countries, including Russia (since 2017).

Budget for setting up business in Hong Kong with substance

Services
Fees (USD)
Total cost of incorporation (including preparation and provision of original constitutive documents and their apostilled copies)
2500
Supporting the Hong Kong bank account opening[1]
from 3030
Office rent in Hong Kong for 1 year
see the details below
Total:
from 5530

Time frame for setting up business in Hong Kong:

Company registration from 1 business day;

Bank account opening from 1 month (depending on the bank).

COMPANY INCORPORATION

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

1) You need to choose

company name to be checked for its availability (at least two names), such name:
  • 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 1000);
  • activity and geography of business.

2) Payment of fees

3) You need to provide documents for directors / shareholders / beneficial owners / attorneys

  • 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.

4) Preparing a package of documents for company incorporation, having the documents signed by directors and shareholders

5) Filing an application for incorporation of the company

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.
Copies of documents in the apostilled set are certified by an authorized employee of the Hong Kong registered agent, with his signature certified by the Commissioner for Oaths

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 910. 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 1020. It takes 4 business days to prepare it.

COMPANY STRUCTURE

DIRECTORS

- minimum number:
- one
- individual / corporate:
- at least 1 director must be individual
- residence:
- no requirements

SHAREHOLDERS

- minimum number:
- one
- individual / corporate:
- individual / corporate
- residence:
- no requirements

SECRETARY

- minimum number:
- one
- individual / corporate:
- individual / corporate
- residence:
- must be a Hong Kong resident, in our case the secretarial services provided by our company are included in the incorporation and/or annual renewal package

SHARES & SHARE CAPITAL

- minimum authorized share capital:
- none
- standard share capital:
- HKD 1000
- minimum issued / paid up share capital:
- HKD 1

The share capital can be denominated in any currency. There is no minimum authorized share capital, 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 for the authorized share capital. Usually the share capital is HKD 1000 which is divided into shares of HKD 1.00 each. The details of shareholders and directors are filed with the public register.

Subsequent administration of the company

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:

from operations with local, Hong Kong companies; or

if it has a place of business in Hong Kong (i.e. an office and employees and/or Hong Kong resident directors).

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.

To assess the company’s tax burden, we recommend seeking tax advice (which 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 request comes in within 12 to 18 months after incorporation of the company

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:

USD 365 – if the company has no employees, a zero return is filed once.

USD 500 – if the company does have employees (directors without salary or contract are not regarded as such) and if the time to file takes up to 1 hour; any further work + USD 150 / hour. A return for a company with employees is filed annually.

USD 280 – fee for notifying the IRD of hiring an employee, such notification must be submitted within 3 months of the date of signing the employment agreement.

The penalty for failure to submit 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 5000 (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.

On 1 March 2018 the amendments to Hong Kong Companies Ordinance came into effect, introducing the Significant Controllers Registers. The Significant Controllers Register is NOT public and is NOT filed with any authorities, but is kept at the company’s registered office; it is available for inspection only to the company’s Significant Controllers and Hong Kong law enforcement officers during an inspection (the list of those authorized to inspect the register is given in the law and is exhaustive).

PHYSICAL PRESENCE IN THE COUNTRY OF INCORPORATION (SUBSTANCE)

Postal service

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 1 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) - USD10/page.

Phone number

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), plus courier delivery.

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 a year in advance. Per-minute billing is paid quarterly based on itemized phone bills. If payment of per-minute billing is more than 1 month late, the service is terminated. This is why a deposit of USD 330 is required, which is used to cover additional invoices issued in accordance with per-minute billing. After the three months, a deposit is charged for the remaining nine months based on the average per-minute billing.

The fee for having an individual telephone line is USD 1575 / year.

Renting office at the registered office address

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 1280 / month. A large bright office with Internet and amenities is located in one of the central areas. Details of equipment and office use should be agreed individually.

Renting a separate office

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 1200 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.

Recruiting

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 2000 / month.

Fees[2]

Services
Fees (USD)
Company incorporation and subsequent administration
Total cost of incorporation (including preparation and provision of the company’s original constitutive documents and their apostilled copies, share issue documents, compliance fee and common seal)
2500
Further annual maintenance (starting from the second year), including provision of registered office, not including preparation of financial statements
1740
Nominee Director (for 1 year, including one apostilled POA)
1140
Nominee shareholder (for 1 year)
435
Certificate of Continuing Registration
340 (original) / 680 (apostilled original)
Business Registration Certificate
340 (original) / 680 (apostilled original)
Certificate of Incumbency
310 (original) / 650 (apostilled original)
Company Particulars Report
340 (original) / 680 (apostilled original)
Apostille of any document (without additional certification by notary)
340
Additional Apostilled set of constitutive documents: certified by Commissioner for Oaths/certified by authorities (Registrar / IRD)/certified by notary
675/950/1125
Amending the company’s Articles of Association (filing only, not including the lawyer’s fees for drafting amendments)
from 915
Preparing documents for changing shareholder/ beneficial owner
980
Preparing documents for changing director
840
Courier delivery of documents from Hong Kong to Russia
125
Courier delivery (urgent) of documents from Hong Kong to Russia
215
Preparing and filing dormant accounts
900
Preparing and filing non-dormant accounts
100 – 400 / hour (depending on time spent)
Compliance fee. Payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of directorshareholderbeneficial owner, except the change to a nominee directorshareholder)
250 (standard rate – includes the check of 1 individual) + 50 for each additional individual (director, shareholder, or beneficial owner) or legal entity (director or shareholder) if such legal entity is administered by GSL; + 100 for each additional legal entity (director or shareholder) if such legal entity is not administered by GSL. 350 (check for High Risk companies, including the check of 1 individual)
Creating substance in Hong Kong
Postal service for 1 year, includes 1 shipment per month to the Moscow office of GSL Law & Consulting
880
SIM card
610
Individual telephone line with 24-hour call forwarding to a foreign number, for 1 year
1575
Deposit (refundable, depends on the scope of services)
from 330
Renting office at the registered office address
Office rent agreement without physically placing there an employee, per month
675
Office rent agreement with physically placing there an employee (terms to be agreed), per month
1280
Renting a separate office
Searching for office space
200 / hour
GSL services of searching for office space, agreeing the terms of and arranging the signing of the office rent agreement are charged on an hourly basis, with a report on the work done
Minimum deposit – 800
GSL agency fee, if the rent agreement is signed (payable once)
10% of annual sum
The HK realtor’s fee, if any, is paid additionally as invoiced by the realtor (the fees of local realtors can equal a monthly or two monthly rents). Monthly rent (a deposit is payable to the landlord for two months in advance)
from 1200 / month (small office without amenities); from 2000 / month (with amenities for employees)
Recruiting services
from 25-35% of annual salary
Minimum wage per month
from 2000

[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 September 2021.

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5530 USD
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