Hong Kong Company Formations

Hong Kong business establishement, comparable to Panama company formation, is one of the most attractive features for investors seeking to do business in Asia. Besides a modernized fiscal system, Hong Kong company formation is available for the creation of Hong Kong companies that are intended for use as on shore or offshore companies.

Hong Kong does not impose withholding and capital gains tax, goods and services tax or VAT, which makes company formation in Hong Kong very beneficial for both locals and foreign nationals that intend to incorporate Hong Kong companies for international use.

The PLC (private limited liability company) is the most common form of Hong Kong company incorporated in Hong Kong. This Hong Kong company is ideal for raising capital, has legal personality that enables it to operate independently of its owners, transfer shares easily and gain public confidence as a corporate structure. Hong Kong company formation of this entity is efficient and regulated by the Companies Ordinance.

Hong Kong company formation is not restricted to local residents and is accessible by nonresident foreign nationals as well. Important information about company formation can be obtained from professional firms that are authorized to provide company formation services in Hong Kong and are knowledgeable about the relevant tax and corporate provisions for foreign nationals.

Hong Kong formation rules require companies to be established with at least one director. Directors may be both natural and or legal persons.

There are no prohibitions on nationality, as both residents and non residents are able to incorporate Hong companies. Hong Kong formation, however, requires that the members of a Hong Kong company are 18 years old or over. Members must also be of sound mind, not convicted for any illegal activity and not be bankrupt.

For greater privacy, upon Hong Kong company formation can be done with the use of a nominee director. The directors have the option to be shareholders or not. Being a director and shareholder at the same time is not compulsory. There is no maximum number of directors required for Hong Kong company formation.

Upon Hong Company formation, there must be at least one shareholder. While no maximum number of directors is stipulated, Hong Kong companies can have only up to fifty shareholders. Upon and after company incorporation in Hong Kong, the shareholders of Hong Kong companies are not required to be residents of Hong Kong. Shareholders can opt to be directors if they wish. Upon company formation Hong shareholders can be foreign nationals that do not live in Hong Kong. Shareholders can have their meetings at any location of their choosing.

Generally, Hong Kong companies have a standard authorized capital of HKD10, 000, which is divided into 10,000 valued at HKD1.00. Any increase in this capital amount is subject to a 0.1% tax. There is however a cap of HKD30,000 on the amount paid at any one time from this tax. Upon Hong Kong company formation, companies are required to issue at least one share of valued at HKD 1.00. No maximum limit is imposed on the amount of shares that a company can issue or have paid-in upon Hong Kong company formation. Hong Kong companies are not allowed to issue shares to the bearer.

Upon Hong Kong company formation, shares can be issued in any currency that is internationally accepted and does not have to be in HKD. The Hong Kong company is free to transfer shares, although a stamp duty is applied for transfers.

Hong Kong companies are exempt from corporate and other taxes provided that all income and profits are generated outside of Hong Kong. Hong Kong fiscal regime is based on territoriality and taxes are thus applied on a territorial basis. Upon company formation, Hong Kong companies are exempt from capital gains, VAT and withholding tax, which in any case are not imposed in Hong Kong. Read about Dominica company as an alternative to Hong Kong company.

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