Hong Kong incorporation services

Introduction

Large multi-national corporations set up overseas companies to reinforce the competitive edge of the as a whole, and hence maximize profitability. For example, they can reduce taxation expenses legally by booking some incomes to lower taxation regions, such as Hong Kong.

TBA assists small and medium size corporations and individuals to set up their companies and bank accounts in Hong Kong, through which they can enjoy the privilege as large corporations.

After you set up your company in Hong Kong, it is not a must for you to stay here while you can remote control your Hong Kong company by making use of our all-round office back up services selectively to meet your business requirement. You do not need to employ any staff or rent an office. It is just like our staff is your staff and our office is your office. As such, your operating costs are reduced substantially while you can enjoy the benefits brought to you by your Hong Kong company.

One example of such benefits is Hong Kong taxes are among the lowest in the world, and the tax system is simple. There is no capital gains tax, no withholding tax on dividends and interest, no collection of social security benefit, no sales tax or VAT and estate duty will be abolished this year. Profit derived from offshore business is exempted from tax. For a trading company, offshore business refers to goods sourced outside Hong Kong, such as China, Korea, Japan, Taiwan, etc. and shipped directly to overseas countries such as USA, Europe, Australia, Middle East, Africa, other Asian countries, etc. and vice versa. Under these circumstances, you can easily obtain tax benefits by booking such transactions in your Hong Kong company.

Freest economy in the world, no foreign exchange control, low taxes and simple tax system, major financial center, English common law legal system, prime geographic location, gateway to China, business orientated culture, free flow of information and world class infrastructure on the whole make Hong Kong a business platform that you cannot miss. If you are engaged in trading business connected with Asia, it is already worth for you to consider forming a company in Hong Kong.

Our company was founded in 1998 and has been providing six major lines of services in Hong Kong and China, namely:
  • Formation of company services
  • Company secretarial services
  • Accounting and taxation services
  • Trade supporting services
  • Application for visa and other certificates services
  • Financial consulting services

Services include but not limited to the following: company secretary; nominee shareholder/nominee director; registered office address; temporary virtual office; opening of bank account; accounting and statutory audit; preparation of management account; tax advice; filing of tax return.

Please feel free to contact us for any query you may have and we can discuss in more details how our services can assist you to maximize profitability.

Why Hong Kong?

Reliable banking system

HK, being an International Finance Centre & a Tax Haven, has a lot of branches of major international banks which are trustworthy and have a lot of branches all over the world. HK banks will only need a passport copy and the address of the client to comply with the HK law, which also requires that no HK banks can disclose their clients’ details to any one without their permission. We always assist our clients to open bank accounts with a major international bank in HK.

HK-established legal system

HK has a well-established legal system, which is based on the English legal system.

Genuine trading

HK has a lot of genuine trading activities. Therefore an offshore company with a HK correspondence address will have an advantage over those without a HK correspondence address.

No exchange control

HK has no exchange control. Money can be deposited, withdrawn or transferred out of a HK bank account freely without paying any taxes, including withholding taxes.

Confidentiality

All banks in HK are under the HK law, not to disclose any customer’s information to any one without the customer’s prior consent, except if the customer is suspected for money laundry or criminal offence, or the HK Inland Revenue Department suspects that he/she has evaded HK taxes (not taxes in other countries). Further the HK Inland Revenue Department is not allowed by the HK law to disclose any information to any one, including local or overseas governments.

Better communication

We provide mail forwarding service & telephone/fax service (with or without dedicated telephone line & answering in your company name) with all voice/fax messages sent to you by email.

A HK company provides a HK telephone number for tape recording of telephone messages and receiving fax at reasonable fees (please see attached sheet). All voice and fax messages will be automatically forwarded to your designated email address.

Simple procedures

Formation procedures for offshore companies are simple. There is no need to come to HK for company formation or opening of HK bank accounts, and the bank accounts can be operated at overseas without coming to HK.

General information

Hong Kong is on the south east coast of China and consists of a large number of islands and a part of the mainland totaling approximately 1,064 sq km. On 1 July 1997 all of Hong Kong reverted from British Control back to China and became a Special Administration Region “SAR” within the People’s Republic of China (PRC).

Population

About 7 million.

Political structure

Hong Kong elects its own legislature and maintains its own court structure.

The future of Hong Kong

Under the “one country – two systems” philosophy, the SAR has executive, legislative and independent judicial power. The capitalist system, legal structure and lifestyle remain unchanged. Hong Kong remains a free port with a free flow of capital and a freely convertible Hong Kong dollar. With China pushing forward with the modernization of its own economy, the PRC has expressed the wish that Hong Kong should assist in this endeavor. It has stated that its future development will be based on market led reforms with socialist characteristics and this has led to the opening up of its economy to foreign investments. It is widely recognized that Hong Kong is and will continue to be a significant gateway to China.

Exchange control

None.

Type of law

Common Law based on English Common Law.

Infrastructure and Economy

Hong Kong has excellent communication facilities and a major new international airport. Separating Hong Kong Island and the Kowloon peninsular is Victoria Harbour, which is recognized internationally as one of the world’s perfect natural harbours. It is estimated that 100,000 containers per month pass through the port, which is arguably the busiest in the world. Hong Kong is the leading South East Asian centre for both finance and commerce and ranks as the world’s third largest financial centre after New York and London. The Hong Kong Stock Exchange is the most active in Asia outside Japan.

Language

The official languages are English and Chinese, with English being used in the commercial and political context and Cantonese Chinese used widely in industry and domestic trade.

Currency

The Hong Kong Dollar, which is officially pegged to the US Dollar. (1 US$ = HK$ 7.74 to HK$ 7.78).

Principal corporate legislation

Companies Ordinance (Cap 32).

Company information

Type of company or international trade and investment

Private Company limited by Shares.

Procedure to incorporate

Submission of Memorandum and Articles of Association and a Declaration of Compliance. A Notice of Situation of Registered Office is also required to be filed within fourteen days of the date of incorporation.

Restrictions on trading

Cannot undertake banking or insurance activities or solicit funds from or sell its shares to the Public.

Powers of company

A Hong Kong company has all the powers of a natural person.

Language of legislation and corporate documents

Chinese and English.

Registered office required

Yes, must be maintained in Hong Kong.

Name approval required

It is not possible to reserve a name. It is essential to check that there is no similar or identical name on the register, which would prevent the company being incorporated.

Shelf companies available

Yes.

Time to incorporate

Approximately two weeks from the submission of documentation.

Name restrictions

A name that is similar to or identical to an existing company. A name that constitutes a criminal offence or is otherwise contrary to the public interest. A name that implies royal or government patronage.

Names requiring consent or license

Building society, Chamber of Commerce, co-operative, imperial, Kaifong, mass transit, municipal, royal, savings, tourist association, trust, trustee, underground railway, bank, insurance, assurance, reinsurance, fund management, asset management and investment fund.

Suffixes to denote Limited Liability

Limited.

Disclosure of beneficial ownership to authorities

No.

Compliance

Authorised and issued share capital

The standard authorized share capital is HK$ 1,000. The minimum issued capital is two shares of par value.

Bearer xhares permitted

No.

Other shares permitted

Deferred, founders and management shares.

Financial statement requirements

A Hong Kong company must keep accounting records for at least 7 years, which may be kept at the registered office address or elsewhere at the discretion of the directors. Every company must appoint an auditor who must be a member of the Hong Kong Institute of Certified Public Accountants and hold a practicing certificate. Although there is no requirement to file accounts with the Registrar, there is a requirement to file accounts with the Hong Kong Inland Revenue Department.

License fees

The Business Registration Fee, currently HK$2,250 on the date of incorporation and then annually on the anniversary of the incorporation. (Special tax concession arrangement by the HKSAR is granted until 31st March 2014; the Business Registration fee of each company is HK$250).

Double taxation agreements

Hong Kong has comprehensive double tax agreements with Austria, Belgium, Brunei, Czech Republic, France, Hungary, Indonesia, Ireland, Japan, Liechtenstein, Luxembourg, Malaysia, Malta, Netherlands, New Zealand, Portugal, Switzerland, Spain, Thailand, United Kingdom, Vietnam and the Mainland China respectively to relieve taxation on income, for instance, dividends, interest income and royalties.

The Hong Kong Inland Revenue Department allows a deduction for foreign tax paid on a turnover basis in respect of income which is also subject to tax in Hong Kong. Therefore, businesses operating in Hong Kong do not generally have problems with double taxation of income.

The respective comprehensive double tax agreements with Canada, Jersey, Kuwait, Mexico and Quatar will become effective from 1st April 2014 to relieve the applicable double taxable on various incomes.

Classes of shares permitted

Ordinary shares, preference shares, redeemable shares and shares with or without voting rights.

Taxation

Hong Kong is one of the few countries in the world that tax on a territorial basis.
Many countries levy tax on a different basis and they tax the world-wide profits of a business, including profits derived from an offshore source. Hong Kong profits tax is ONLY charged on profits derived from a trade, profession or business carried on in Hong Kong. Consequently, this means that a company which carries on a business in Hong Kong, but derives profits from another place, is not required to pay tax in Hong Kong on those profits. Hong Kong sourced income is currently subject to a rate of taxation of 16.5%. There is no tax in Hong Kong on capital gains, dividends and interest earned.

The principle of Hong Kong profits tax is that it is a tax on profits that has its source in Hong Kong rather than a tax based on residence. Income sourced elsewhere, even remitted to Hong Kong, is not subject to Hong Kong profits tax at all. Consequently, if a Hong Kong company’s trading or business activities are based outside Hong Kong no taxation will be levied.

A factor that determines the locality of profits from trading in goods and commodities is generally the place where the contracts for purchase and sale are effected. ‘Effected’ does not only mean that the contracts are legally executed. It also covers the negotiation, conclusion and execution of the terms of the contracts.

If a business earns commission by securing buyers for products or by securing suppliers of products required by customers, the activity which gives rise to the commission income is the arrangement of the business to be transacted between the principals. The source of the income is the place where the activities of the commission agent are performed. If such activities are performed through an office in Hong Kong, the income has a source in Hong Kong.

Certain sums, like royalties, paid or payable to non-resident persons for use of or right to use certain intellectual property are subject to withholding tax. The payer who claims deduction for the use of the intellectual property against its assessable income is required to withhold a prescribed percentage from the payment while that recipient is not subject to Hong Kong profits tax. The prescribed percentage is 4.95% on the gross payment if the payer and the recipient are not related, but 16.5% if the payer and recipient are related. The recipients of the royalties may enjoy different treaty rates under double taxation agreements.

Our company licensing services

— What we do and do not do

Our company is EXCLUSIVELY engaged in assisting worldwide clients, either individuals or corporate entities, to get duly and properly licensed with local Regulators and Financial Authorities to get respective official licenses to legally carry out their cryptocurrency or financial related business activities.

TBA & Associates Tax Business Advisors does not provide or carry out any sort of Cryptocurrency or Financial services!

Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.

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