Advantages of Hong Kong Company
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Hong Kong is one of the world's most free economies. It
has a sound legal system and efficient financial industry
and attracts entrepreneurs and businesses from all over the
world. We list some advantages of Hong Kong company as follows:
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| 1. |
(It's relatively free to choose a company
name. There are only few words, such as "Royal ","
Bank ", "Chamber of Commerce", "Cooperative"
or " Trust ", etc. which by law are restricted
to be used in the company names unless an approval is
granted by the Chief Executive of Hong Kong. Most names
can be used as a company name as long as there is no similar
or exact same name already exists in the Registry. Regardless
of the authorized capital size, a company's name may contain
words, such as "International", "Group",
"Holdings", "Enterprise", "Investments",
"Institute", "Association" and "Center"
etc. A company's name may also contain name of a place,
such as "France", "US", "Italy",
"Japan", "Hong Kong", "Shanghai"
or name of yourself. |
| 2. |
There are not too many restrictions on
the scope of business for HK companies. Except for banking,
insurance, finance and military services and few other
areas which by laws must apply for special licence or
permission, most of business such as investment, shipping,
import & export, real estate, construction, interior
design, information technology, textile and fashion design,
tourism and publication, etc. could all be carried on
by a HK company. |
| 3. |
HK companies have no minimum registered
capital requirement. The authorized capital of a company
is stated in its Memorandum and Articles of Association.
The dollar amount of the authorized capital does not need
to be remitted into the company. Shareholders may only
apply for certain proportion of the total available shares
or a minimum numbers of shares. Shareholder's liabilities
to the company are limited to unpaid shares which have
been allotted to him/her. The Board of Directors may allot
unissued shares at any time. |
| 4. |
The incorporation requirements are simple.
Each company only requires a minimum of one Director and
one Shareholder, could be the same individual or corporate
entity with no restriction of nationalities. A local Company
Secretary and Registered Address are also required in
accordance with Hong Kong Company Ordinance and could
be provided by local professional company secretarial
companies. |
| 5. |
Hong Kong is a low tax jurisdiction.
Over 3,200 multinational corporations have established
regional headquarters or offices in Hong Kong to take
advantage of Hong Kong's favorable tax policy and to
maximize their profits. Usually there are only three
types of tax payable as a Hong Kong company:
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Capital duty comprises
0.1% of the nominal value of share capital of a
Hong Kong company and on any increase of share capital
is payable. |
| > |
Profits tax comprises
17.5 % of the net profits arising in or derived
from Hong Kong, calculated in accordance with the
provisions of Part IV of the IRD which specify allowed
deductions, allowances and exemptions. |
| > |
Stamp duty comprises 0.1% each for both the transferor
and the transferee on the considerations paid or
the fair market value of shares transferred in a
Hong Kong company. |
Unlike mainland China, there is no sales tax, value-added
tax in Hong Kong. Moreover, Hong Kong adopts a territorial
source principle of taxation. Only profits derive from
Hong Kong are taxable. Profits derive from outside Hong
Kong are not subject to Hong Kong tax. |
| 6. |
Hong Kong is the world's third largest
financial center. There are many banks, brokerage houses,
financial organizations, international accounting and
law firms in Hong Kong. Hong Kong's highly efficient and
developed financial and legal infrastructures makes comprehensive
and low costs financing and credit facilities available
to Hong Kong companies.
Mainland China domestic company can not only use HK company
as a listing vehicle to capitalize its assets but also
to use good reputations of Hong Kong banks to enhance
its lines of credit Hong Kong company's advantages can
be further realized by applying for Hong Kong government's
small and medium-sized enterprise loans.
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| 7. |
Hong Kong has no exchange control. Major
foreign currencies could be freely exchanged, remitted
in or out. |
| 8. |
Hong Kong is a metropolitan city with good
reputation in the world. As a window to the world for
domestic companies and also a gateway to mainland China,
Hong Kong is an ideal place for companies to polish their
images, achieve brands recognition and acceptance, develop
international and domestic markets and improve their competitive
edge. |
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