Business China

How to Set up and Maintain a Hong Kong Company?

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Ⅰ. How to start setting up Limited Company in Hong Kong

How to Set up and Maintain a Hong Kong Company?

1. Company name: in addition to "Royal", "Bank," "Trust" and other restrictions, the Chinese name of the Hong Kong company should include "limited company(有限公司)", English name should end with "Limited", then the company can be registered without a duplicate name.

2. Registered capital: the default registered capital of the Hong Kong company is HK10,000, no capital injection is required, except 1/1000 government stamp duty. For example, HK $1 million, additional government fee of HK $1000 is required.

3. Shareholders: at least one person of any nationality above the age of 18 may be the same as a director.

4. Director: any person of any nationality, at least one of whom may be a shareholder, at least 18 years of age.

5. What to fill in: application form and trust agreement provided by Business China.

6. Time: 7-8 working days to complete company registration.

7. Bank account: China mainland banks include: China Merchants, SPDB, Bank of Communications, Bank International Ningbo (BINB), Xiamen International Bank (XIBH). Hong Kong banks include HSBC, Standard Chartered, East Asia, Netherlands, Bank of China, etc.

Guaranteed Hong Kong Bank Account

8. Hong Kong tax: Hong Kong is a low tax area, which is good for companies to gain profits. But according to the relevant Inland Revenue Department regulations, 16.5% of the profits after deducting the operating expenses is stipulated.

9. Full set of company document: original certificate of incorporation, original business registration certificate, 20 articles of association, 1 copy of meeting record, 1 copy of stock, 1 signature seal, 1 atomic seal, 1 steel stamp, 1 set of CPA verification documents.

10. Company secretarial services: registered address, registered secretary, business secretary (telephone, fax) services. Responsible for answering the telephone, sending and receiving faxes, sending and receiving letters.

11. Annual renewal service: an annual renewal is required on the first anniversary of the company. The Hong Kong company is required to submit fees to renew Business Registration Certificate and submit the annual return.

12. Accounting Services: Bookkeeping, Audit Services.

Ⅱ. The follow-up management service of a Hong Kong company (the following work can be commissioned to Business China)

After the establishment of the Hong Kong Company, the company must be properly managed every year to ensure its normal operation, according to the law. A Hong Kong company is accountable to at least two government departments each year: the Companies Registry and the Inland Revenue Department.

(a) Company Registry

1.The filing of an annual return (once a year)
An annual return is an update of all changes in your company during the previous year to the most comprehensive and correct information for public search. At the end of the year, the HKD105 registration fee must be paid at the same time as the filing of the annual return.

(B) Inland Revenue Department

1. Renewal of Business Registration Certificate (BR, once a year)

Business Registration Certificate is a legal business document issued by the Hong Kong Inland Revenue Department to business operators and is valid for one year. The inland revenue department issues a business registration certificate replacement notice to an enterprise about 1 month before the completion of the anniversary of each company. Upon receipt of the notice, the company must apply a new registration certificate and pay the business registration fee HK2450.

2. Submit of the company's employees' wage return (once a year)

As for salaries tax in Hong Kong, the inland revenue department will issue an employee's wage return to each enterprise in April of each year. The company is required to declare the salary of its employees, which is used as a basis for salaries tax collection by the Inland Revenue Department. Hong Kong companies operating offshore and earning less than HK $100,000 a year are subject to zero salaries tax. This service is free of charge.

3.Tax returns (once a year, at the option of the fiscal year)

How to Set up and Maintain a Hong Kong Company?

The tax return issued by the Inland Revenue Department 18 months after the establishment of the new company will require the company to make its first tax return. The best way to handle the tax return is to submit an accountant's audit report to the Government when it is submitted to the Government. Generally speaking, the company will choose one annual report. If the declaration is zero, it is free to submit.
According to the definition of profits tax, the following three conditions must be met in order to levy profits tax:
  • To carry on any trade, profession or business in Hong Kong.
  • To obtain profits from a trade, profession or business other than profits arising from the sale of capital assets.
  • Profits arising in or derived from Hong Kong.

The Hong Kong limited company is responsible for making annual tax returns to the inland revenue department. The directors are responsible for the company s failure to submit auditors' reports, tax returns and company employees' salary returns within a specified time, after which the Inland Revenue Department will assess the tax on the company. To avoid overpaying unnecessary taxes, directors should take the initiative and deal with the problem as soon as possible. The company's accounts are submitted to the auditor for examination. The first audit period is within 18 months of the establishment of the company (the general closing date for a company is scheduled to be 31 March / 31 December). 80% the Hong Kong companies will choose 31 March as the time for the company to carry out the audit. When the company operator receives the relevant letter or tax return from the Inland Revenue Department, it should arrange for the auditor concerned to conduct the audit as soon as possible.

A. Business inactive audit report

This is the simplest tax arrangement. In short, if a Hong Kong company does not have any operation, it does not use a Hong Kong company to carry out any actual business. In this case, the company will not have a profit without operating, so of course no tax. Qualified: 1. not buying any property in Hong Kong; 2. no record of monthly statements of any bank; 3, not carrying on any business. (this is quite common in domestic companies to use a Hong Kong to do the brand promotion.)

B. The accountant audit reports

This is a tax arrangement required by a Hong Kong company with normal trade in general. In accordance with the provisions of the Hong Kong Inland Revenue Ordinance, Hong Kong companies engaged in trade (except for Hong Kong companies which can file tax returns within 18 months of the establishment of a new company) are required to report to the Inland Revenue Department at least once a year. The report submitted to the Government must be an audit opinion issued by a local certified public accountant in Hong Kong on the company's overall financial situation throughout the year, which is a legally valid report for the government to clearly understand the company's financial information for the whole year and for government's assessor to decide whether the company needs to pay taxes.

Attention: First of all, whether the Hong Kong company is a loss or a profit or whether the source of profits is overseas, whether it needs to be taxed, or whether there is a need to pay taxes, under the laws of Hong Kong, an auditor's report is required for normal trade transactions as long as they are operational. In other words, trading companies in Hong Kong can pay no taxes, but they have to file tax returns.

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