Hong Kong Business Formation – Tips For Opening a Business in Hong Kong
Business formation in Hong Kong is an attractive option for foreign investors wishing to establish a business here. There are several financial benefits to developing a Hong Kong company: tax benefits, minimal regulation requirements, a relatively fast start-up time, excellent business location, and a low cost of entry. There are also many available opportunities for foreign entrepreneurs to open a small company. The corporate tax rates are low. There are only a few strict regulations that govern local business affairs, and it’s pretty easy to obtain bank loans for your business undertakings. But before you open a business in Hong Kong, you need to know some basic information about the rules of the country and the requirements of the Companies Registry.
The Companies Registry is the central repository of information on all registered businesses in Hong Kong. It is the “white pages” of business records. All the information that is required for Hong Kong business formation can be found in the Companies Registry. However, starting a business demands much more than just submitting a list of your company’s name and contact details. You also have to comply with other legal requirements such as licensing, registering the business, and even paying the Registry’s annual administrative fees. Thus, you cannot just go into a Hong Kong business formation without preparing the necessary documents and records.
The first step in completing the start-up’s formalities is to obtain a business number from the Companies Registry. You will then be able to open a company account in the banks. Your business number should be at least 15 characters long, and your name should not be the same as another company or a person. You can hire a trademark attorney or an expert in company registration to help you obtain your business registration. If you cannot afford this fee, you can get a short-term company charter from the Companies Registry. There are certain hoops to jump through to get this service, but it still is much cheaper than applying for a business permit in Hong Kong.
If you are self-employed and have no employees, you have to pay income tax on your business’s earnings. You need to submit the income tax returns or receipts you have interaction with anyone. Hong Kong company formation allows you to pay the income tax without any difficulty. You do not need to pay tax on the profits because they are already declared to the tax authorities.
Tax benefits provided by the Companies Registry can be of great help for you during your business expansion. You do not need to apply for corporate tax registration if you have no employees. You have to provide relevant information like your address and contact numbers when you file your annual information form. Your yearly information form is forwarded to the Companies Registry for review and approval. Once the permission is obtained, you have to pay the necessary corporate tax at the end of the year.
Another advantage of Hong Kong business formation is that you do not need a business license. Companies Registry does not charge for business registration. You must pay a nominal fee which is payable at the time of registration. It would help if you delivered the corporate tax at the end of the year unless you have already started trading. You also do not have to pay additional corporate tax if you have already registered your company.
Hong Kong company formation statistics show that the people prefer to open a new branch office in the local area rather than travelling a long distance. Therefore, you will enjoy many other benefits such as reduced corporate tax rates, increased productivity, etc. When you select a location, you must take into consideration the availability of resources. If you are unable to locate resources in the area of your choice, you can always look for a partner. Various business partners can help you in getting resources and in running your business. If you have more than one branch office, it is advisable to maintain separate accounts.
A significant advantage of having a Limited Liability Company is that you can make essential decisions without involving your principal directors. One of the company directors’ most critical decisions is determining whether to include an executive’s services in the company. There are certain benefits of an executive director in the Limited Liability Company. One of the significant benefits is that they have access to the management of the company. The benefits of the other non-executive directors are that they have limited management authority.
Hong Kong business formation