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Q&A

Q1How to form a local limited company in Hong Kong?
Q2How many shareholders and directors are required to form a local limited company?
Q3What is "Company Secretary"?
Q4What is the responsibility fo Company Secretary?
Q5What is "Registered Address"?
Q6What is "Shelf Company"?
Q7What events should be paid special attention for a company?
Q8When do we need to pay tax, and how do we fulfill our tax obligation?
Q9What can be exempted and deducted from calculating profits tax of a corporation?
Q10Can sole-proprietor get the basic and other allowances for Individual Salaries Tax?
Q11「Is it necessary to apply the "Business Registration Certificate"?
Q12What is the fee of applying for a Business Registration Certificate?

 

 

Q1 How to form a local limited company in Hong Kong?
Generally, it needs 7-9 days to form a local limited company. You are required to draft the company name, prepare the shareholders’ and directors’ name and ready for the copies of HKID card or passport. We will provide free Company Search Services and conduct other related processes. TOP
Q2 How many shareholders and directors are required to form a local limited company?
At least 1 shareholder and director is required. TOP
Q3 What is "Company Secretary"?

According to "Company Ordinance" in Hong Kong, a company must appoint a company secretary or a joint secretary. The sole director and sole shareholder in a private company cannot be the company secretary simultaneously.

Company Secretary must be a Hong Kong resident, or that is a statutory body with "Registered Office" or "Business Address" in Hong Kong.
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Q4 What is the responsibility fo Company Secretary?
Under Companies Ordinance, it should hold annual general meetings or other extra ordinary meetings, prepare minutes, submit documents to relevant government departments and Annual Returns. TOP
Q5 What is "Registered Office"?
All limited companies must provide a Hong Kong address(Post Office Boxes are not allowed) as a "Registered Office" . You may use our company's address as your company's registered office with a price annually. TOP
Q6 What is "Shelf Company"?

Shelf company is already formed or ready-made limited company and it never commences any business.

It only requires 1-2 days to purchase a shelf company. Shelf company would be of good choice when you do not have special requirement for the company's name, or in urgent case, need to sign a contract on behalf of a company(e.g. Tenancy Agreement)
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Q7 What events should be paid special attention for a company?

All companies should submit "Annual Return" (Form NAR1) to Registrar of Companies annually. It is the responsibility of the director(s) or secretary of a company to observe the requirements of the Companies Ordinance to file Annual Returns and other statutory documents on time. For the local private companies having a share capital, this form must be submitted to the Companies Registry within 42 days after the anniversary date ofincorporation. Late submission is subject to a higher registration fee.

Local private companies having a share capital HK$
Within 42 days after the anniversary of incorporation 105
More than 42 days after but within 3 months after the anniversary of incorporation 870
More than 3 months after but within 6 months after the anniversary of incorporation 1,740
More than 6 months after but within 9 months after the anniversary of incorporation 2,610
More than 9 months after the anniversary of incorporation 3,480

A company which fails to file its Annual Return with the Companies Registry within the prescribed time period is in breach of the Companies Ordinance and is liable to prosecution. The Registrar of Companies may consider taking strike-off action in appropriate cases.

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Q8 When do we need to pay tax, and how do we fulfill our tax obligation?

The first Profit Tax Return will be delivered from IRD in around 18 months after the company's incorporation. A few weeks later, you will receive a tax demand note to request for tax payment.

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Q9 What can be exempted and deducted in calaculating profits tax of a corporation?

Dividends received from a corporation which is subject to Hong Kong Profits
Tax, as well as amounts already included in the assessable profits of other persons chargeable to Profits Tax (e.g. shares of profits from joint ventures) are excluded from the assessable profits of the recipient.

Generally, all expenses, to the extent to which they have been incurred by the
taxpayer in the production of chargeable profits, are allowed as deductions including :-

(1) Interest on funds borrowed (provided certain conditions are satisfied)
and rent of buildings or land occupied for the purpose of producing the
profits.
(2) Bad and doubtful debts (any recoveries to be treated as income when
received).
(3) Repairs of premises, plant, machinery or articles etc used in producing
the profits.
(4) Expenditure for registration of a trade mark, design or patent and
expenditure on the purchase of patent rights or rights to any know-how
for use in Hong Kong in the production of chargeable profits. No
deduction is, however, allowable in respect of patent rights or rights to
any know-how purchased by a person wholly or partly from an
associated or related person.
(5) Expenditure on research and development including market,
management and business research, design-related expenses and
payments for technical education subject to certain rules.
(6) An employer's annual contribution to a fund under a recognized
occupational retirement scheme, or annual premium payment in
respect of a contract of insurance under such a scheme, or regular 4
contributions paid to a mandatory provident fund scheme, or any
provision for these purposes, but limited in respect of any one
employee to 15% of his total emoluments for the relevant period.
(7) Any mandatory contributions paid by a sole proprietor or a partner in a
partnership in respect of his liability to pay such contributions as a
self-employed person under the Mandatory Provident Fund Schemes
Ordinance (Cap. 485) not exceeding $18,000 in a year of assessment 2015/16 onwards, taking into account deductions already allowed under any other sections in the Ordinance. However, contributions made for spouses are not deductible.
(8) Donations of an aggregate not less than $100 made to approved
charities with the restriction that such donation shall not exceed 35%
(25% for years of assessment 2005/06 to 2007/08) of the adjusted
assessable profits.
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Q10 Can sole-proprietor get the basic and other allowances for Individual Salaries Tax?

Sole-proprietor of a business are assessed to Profits Tax at standard rate. By electing Personal Assessment, they may claim the following deductions and
their tax liabilities will be computed at progressive rates applicable to Salaries
Tax:

(1) interest incurred on money borrowed for the purpose of producing
property income, (the amount deductible should not exceed the net
assessable value of each individual property),
(2) approved charitable donations,
(3) elderly residential care expenses,
(4) home loan interest,
(5) business losses incurred in the year of assessment,
(6) losses brought forward from previous years under Personal Assessment,
and
(7) personal allowances.
TOP
Q11

Is it necessary to apply the "Business Registration Certificate"?

The Business Registration Ordinance requires every person who carries on a business in Hong Kong to apply for business registration within 1 month from the date of commencement of the business, and to display a valid Business Registration Certificate at the place of business. If the registered particulars of the business have changed, the business operator has to notify the Inland Revenue Department (IRD) within 1 month of the change. TOP
Q12

What is the fee of applying for a Business Registration Certificate?

There are two types of business registration certificate, namely 1-year certificate and 3-year certificate. Except for the first registration certificate of local companies falling within the one-stop company and business registration, the amount payable under a certificate depends on the commencement date of the registration certificate. For a new business other than a local company, the commencement date of its first registration certificate is its date of commencement of business, not the date of application for business or branch registration.

For local companies falling within the one-stop company and business registration, the amount payable for the first registration certificate depends on the date of submission of the related incorporation application to the Companies Registry (see A6 of FAQ) and the commencement date of the registration certificate is the date of incorporation. For renewal of certificates, the amount payable is determined by reference to the commencement date of the relevant registration certificate.

Date Business Registration Certificate
1-year certificate 3-year certificate
Fee Levy Total Fee Levy Total
HK$ HK$ HK$ HK$ HK$ HK$
On and after 1.4.2016 0 250 250 3,200 750 3,950
01.04.2014-31.03.2016 2,000 250 2,250 5,200 750 5,950
19.7.2013-31.03.2014 0 250 250 3,200 750 3,950
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