Hong Kong (companies limited to shares or a guarantee, unlimited liability companies)

Hong Kong (companies limited to shares or a guarantee, unlimited liability companies)

Hong Kong is a low-tax jurisdiction, the most preferable to conduct trading business in Asia.

One of the significant benefits of registering an offshore company in Hong Kong's jurisdiction is obtaining a favourable tax rate, which is one of the lowest in the world, as well as simplicity and transparency of the taxation system.   In Hong Kong there is no capital gains tax, no income tax on dividends and interest, no fees for social security benefits, no turnover tax or VAT.  Income from the offshore business is also not taxed.

Taxation of Hong Kong companies is associated with the territorial principle.   According to the legislation of Hong Kong, incomes of companies that operate outside the territory of Hong Kong are not subject to tax deduction.  The decision to release the company from taxes is taken by the Hong Kong tax authorities based on an assessment of the company's activities.

Te low-tax jurisdiction of Hong Kong has the following advantages:

• The legal system is based on English Common Law;
• Advantageous geographical location;
• No currency control;
• Law tax rates and simple taxation system;
• Free informational exchange;
• World-class infrastructure.

Small and medium-sized companies, as well as individual entrepreneurs can take advantages of the company's registration in that jurisdiction, the possibility of opening bank accounts and using a low tax regime.

A company may be managed remotely and there is no need to be physically in Hong Kong.  In this connection, there is no need to hire employees or rent an office.

The Most Popular Forms of Incorporation for Companies Established in Hong Kong are:

• Private Company Limited By Shares;
• Public Company Limited By Shares;
• Limited Partnership.

Private Company Limited by Shares can be founded by one shareholder and is characterised as follows:

• minimum amount of offshore equity is 1 HK Dollar;
• maximum number of shareholders - 50 (individuals and/or legal entities of any residence);
• can be managed by one director (an individual or a legal entity of any residence);
• company must have a secretary - a resident of Hong Kong (individual or a legal entity);
• the legislation allows the existence of nominee shareholders, directors and secretary;
• has no right to issue bearer shares, and all shares must have their nominal value;
• shares cannot be offered at public sale, and the transfer of shares requires the approval of the general meeting of the company;
• company must submit the annual financial statements certified by an auditor in Hong Kong.

Public Company Limited by Shares is characterised by shares as follows:

• minimum amount of offshore equity is 1 HK Dollar;
• may have one shareholder, which may be an individual or a legal entity;
• no restrictions in number of shareholders of the company;
• may have one director - an individual or or a legal entity of any residence;
• must have a secretary - resident of Hong Kong, which may be an individual or a legal entity;
• the legislation allows the existence of nominee shareholders, directors and secretary;
• may issue bearer shares;
• shares must have nominal value;
• shares may be offered at public sale, but before distributing shares, the company is obliged to publish a prospectus on of the shares issue;
• the transfer of shares does not require an approval by a majority of directors and shareholders.

Limited Partnership may be founded by two persons without paying any charter capital, and is characterised as follows:

• maximum number of members - 20 (individuals and/or legal entities);
• at least one member, who fully liable for the debts and obligations of the partnership. other partners may be limited to liability in proportion to their shares in the company.

General Table of Requirements to the Companies in Hong Kong

Parameters	Requirements to the companies in Hong-Kong
Type of the Company	Private Limited Company
Applicable Law	Companies Ordinance
Charter Capital	Standard - 10,000 HK Dollars
Shares to Bearer	Not allowed
Shareholders	At least one, an individual or a legal entity
Directors	At least one, an individual or a legal entity
Secretary	Required, an individual or a legal entity
Residence Requirements	Shareholders, directors - no Secretary – yes
Nominal Service	Allowed
Reports Submission	Required
Audit	Required
Taxation	0% for transactions outside of Hong Kong 16.5% - profit tax from the profit received in the territory of Hong Kong
Information on Shareholders/Directors	Public

Please note that this information may be changed from time to time and shall be re-checked by experts of the relevant jurisdiction. To obtain updated information and information on the cost of registration, please contact our representatives.