New Rules on Company Formation in Hong Kong

Recently, there is a controversial topic among the Hong Kong city regarding the government’s proposed amendment to the Companies Ordinance to restrict the public access of personal information of individual directors and secretaries of a company which appear on the registration documents of the Companies Registry. (e.g. Incorporation Form(NC1) and Annual Returns (AR1) filed by a company which containing the full identification numbers and residential addresses)

Hong Kong is famous for being one of the most popular cities around the world for international trade and business. The major benefits of starting a business in Hong Kong are geographical advantage, stable and free market environment, excellent legal and financial system, fair and low tax rate, free trade policy and free flow of information.

Among the most benefits of set up company in Hong Kong, the free flow of information, including freedom and open access to information and particularly of the right to access information held by the public, is the fundamental principle and necessity of a hub of International Trade and Business Centre.

Hong Kong is an attractive place to start up business, it is one of the most freest and open cities and trade link to investment in the Mainland China. The procedure to incorporation of a Hong Kong company is simple and fast, it requires less than 1 business day to get a business registration in Hong Kong.

The Company Ordinance of Hong Kong provided that a private limited company requires to appoint a minimum of one director and one secretary, the directors and secretary can be either individuals or a corporation. The information of directors and secretaries (e.g. full identification number and residential addresses) are open and assessable to the public in the Companies Registry of Hong Kong.

It is common and useful for overseas business investors to conduct a company search to find out personal information of directors, shareholders and other relating parties of a company before starting a business with a Hong Kong Company.

For business investors who wish to protect the privacy of its personal information, KPC business Centre also provides additional administrative services, including nominee directors, nominee shareholders (shadow directors and shareholders) in Hong Kong. Through nominee directors and shareholders, the investors can maintain the privacy and avoid disclosure of private information from the Government and Public records of Company and there is no requirement from the Government of Hong Kong to provide the beneficial owner information.

Alternatively, business investor may also consider to incorporating an offshore company (e.g. British Vigin Islands (BVI), Seychelles, Belize, Delaware, Cayman Islands or Singapore, etc.) in various jurisdictions.

KPC Business Centre also provide free consultation service for formation Hong Kong and Offshore Companies, virtual business phone answering and mail forwarding, registered business address, accounting and taxation services in Hong Kong to assist investor to operate a business in Hong Kong at a minimal cost.

Forming a Hong Kong Company Representative Office: A foreign company may wish to better understanding the market environment before investment in Hong Kong, they may register their overseas company as a representative office in Hong Kong and does not require to pay for the Hong Kong Tax, given that their business only engage in activities on behalf of the parent entity and is not carry on any form of trade, shipping, storage of goods, provision of services for the purpose of gain or generate profits in Hong Kong. Please refer to the definition of “what constitutes doing business in Hong Kong” according to the Inland Revenue Department of Hong Kong.

For details, please do not hesitate to contact our Business Consultant at +852 2153 6555 or email at [email protected]

This Article is for information purpose only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances. If you have any questions, please do not hesitate to contact us.