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Types of companies- What are my options?

The registration of a company in Hong Kong usually starts with the creation of the company name and ends with the issue of a business registration certificate. During the whole process, there are mainly two government departments involved, namely the Companies Registry and Business Registration Office under Inland Revenue Department.

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Further, Hong Kong’s Companies Ordinance recognizes several types of companies including – limited companies and unlimited company with a share capital.

The type of business entity that must be established will be dependant the business plans. Whether the company is a profit or non-profit as well as if it intends to raise capital via investment will all factor into the decision when choosing the mode of setting up in Hong Kong.   

Want to understand how to set up a business in Hong Kong? Read this section.

 

Offshore status of Hong Kong companies

A company in Hong Kong can be established without substance. This means that the business operation can be run in name only with no office or staff and can be operated remotely. Under the current practices, if no income is sourced from the Hong Kong, meaning that all the income is sourced from abroad, then the company will not be liable for tax in Hong Kong. Generally, there are two common types of tests to determine a company’s offshore status.

Read more about Hong Kong's offshore status for companies. 

Key considerations when opening a business

How to open a bank account

Hong Kong is a major worldwide financial hub, with a sophisticated banking network and highly transparent rules. However, many people are concerned about how to open a bank account in Hong Kong because they believe it is more difficult than in their home country.

Foreign entities may encounter some difficulties when opening bank accounts. Common issues faced are related to producing required documents, purchasing insurance or other financial products and conditions on maintaining fixed deposits.

[tips title="Important Tip"]For many banks, it is also not uncommon to impose a monthly charge for failing to maintain a balance above a certain minimum amount. It is advisable to seek guidance while starting the process.[/tips]

Intellectual Property Protection

Hong Kong offers a high level of protection for intellectual property (IP). Hong Kong ranked 9th worldwide in terms of IP protection according to the Global Competitiveness Index 2017-2018 released by World Economic Forum, and 17th according to the Intellectual Property Rights Index 2018. It is also a major global IP trading hub. Hong Kong recognizes several different classes of IP, including trademarks, patents, designs, copyright, trade secrets, plant variations, domain names and lay-out designs of integrated circuits.

To gain insights on IPR and opening a bank account, read this section.

Changing the corporate structure or closing a business

The process of deregistering a company in Hong Kong is governed by company ordinances, which state that only a local private company or a local company limited by guarantee may apply for deregistration. Other companies that may be eligible for deregistration are listed in section 749(2) of the company ordinances.

Before applying for deregistration, the company must meet certain requirements. Read our article about changing the corporate structure or closing a business to know more.

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