Hong Kong has been attracting foreign nationals and investment in recent years. One of the most popular forms of business in Hong Kong that foreign nationals are drawn to is that of a limited company. From a legal standpoint, a limited company formation enables business owners to engage in trades and transactions, while only placing their shareholdings at risk. As such, if a business begins to incur losses, assets of the owner that are not directly invested into the business cannot be claimed by a financial institution or any party that the company is indebted to. The company itself exists as a separate entity from the shareholders themselves.
This is in contrast to other forms of business, such as a sole proprietorship or a partnership firm. In such cases, shareholders are exposed to a greater risk. If the company runs into losses, or defaults on a loan payment, creditors are allowed to claim their personal assets. These forms of businesses expose shareholders to the risk of personal bankruptcy.
Limited company formation in Hong Kong is an easy and uncomplicated process. A single individual may form a limited company, and act as a sole shareholder. The Hong Kong Companies Registry does not have any restrictions regarding nationality of the business owner as well. The only condition that it enforces is that the company must appoint a company secretary, an individual who ordinarily resides in Hong Kong, or a body corporate that has its registered office or a place of business in Hong Kong. Naturally though, forming a limited company will require individuals to pay the requisite application fees, and disclose the capital investment made into it.