Company Registration

Company Registration | Bestar

Hong Kong Company Registration Process

In Hong Kong, the process of registering a company involves two main authorities: the Companies Registry (CR) and the Inland Revenue Department (IRD). The one-stop company and business registration service streamlines this, allowing you to handle both simultaneously.

Here is a general overview of the process and key requirements:

1. Choose a Business Structure and Name

The first step is to decide on the legal structure for your business. The most common types in Hong Kong are:

• Private Limited Company: This is the most popular choice for small to medium-sized businesses. It is a separate legal entity from its owners, providing limited liability.

• Sole Proprietorship: A business owned and operated by one person. The owner has unlimited personal liability for the business's debts.

• Partnership: A business run by two or more people who share profits and losses. Partners have unlimited personal liability.

• Company Limited by Guarantee: Often used for non-profit organizations, this structure has no share capital, and the members' liability is limited to a fixed amount they agree to contribute.

• Branch Office: An extension of an overseas parent company, which is not a separate legal entity.

After selecting a structure, you must choose a unique company name. It can be in English, Chinese, or both. You should perform a name search on the Companies Registry website to ensure the name is not already in use.

2. Key Requirements for a Private Limited Company

If you are forming a private limited company, you will need to meet the following requirements:

• Director(s): At least one natural person must be appointed as a director. They can be of any nationality and do not need to be a Hong Kong resident.

• Shareholder(s): A minimum of one and a maximum of 50 shareholders are required. They can be individuals or corporate entities and do not need to be Hong Kong residents.

• Company Secretary: Every company must appoint a company secretary who is either a Hong Kong resident or a local corporate entity with a registered office in Hong Kong. A sole director cannot also be the company secretary.

• Registered Address: The company must have a physical registered address in Hong Kong (a P.O. Box is not allowed).

• Share Capital: There is no minimum share capital requirement, but a common practice is to start with HK$1.00.

3. Application Process

You can register your company and business through the one-stop service, which processes both applications together. The main documents you will need to submit are:

• Incorporation Form: Form NNC1 for companies limited by shares.

• Articles of Association: A document that outlines the company's internal rules and regulations.

• Notice to Business Registration Office (IRBR1): This is for your business registration.

Applications can be submitted:

• Online: Through the Companies Registry's e-Registry or the CR eFiling mobile app. This is the fastest method, with certificates often issued within an hour.

• Hard copy: In-person at the Companies Registry's office or by mail. This typically takes a few working days.

Upon successful registration, you will receive two key documents:

• Certificate of Incorporation (CI): This is issued by the Companies Registry and confirms your company is legally incorporated.

• Business Registration Certificate (BRC): This is issued by the Inland Revenue Department and authorizes your business to operate in Hong Kong. The BRC must be displayed prominently at your business location.

4. Post-Registration Obligations

After registration, your company will have ongoing compliance requirements, including:

• Annual Return: An annual return must be filed with the Companies Registry.

• Tax Return: An annual tax return must be filed with the Inland Revenue Department, along with audited accounts.

• Statutory Records: The company must maintain records such as a register of directors, secretaries, and members at its registered office.

• Business Registration Certificate Renewal: The BRC must be renewed annually or every three years, depending on the certificate type.

Fees

The fees for registering a company in Hong Kong are divided into two main categories: the Companies Registry (CR) fee for company incorporation and the Business Registration (BR) fee for the Business Registration Certificate.

The total cost can vary depending on whether you submit your application online or in hard copy, and whether you use a professional service provider.

1. Companies Registry (CR) Fee

This is a one-time fee for incorporating your company.

• Electronic submission: HK$1,545

• Hard copy submission: HK$1,720

  
  

Note that a portion of this fee is refundable if your application is unsuccessful.

2. Business Registration (BR) Fee

This is a mandatory fee for all businesses operating in Hong Kong. The amount payable depends on the length of the certificate you choose, and these fees are subject to change based on the government's budget.

The fee schedule has been adjusted with effect from April 1, 2024. For a local company that applies for business registration through the one-stop service, the fees are as follows:

• 1-year certificate: HK$2,200

• 3-year certificate: HK$6,020

  
  

The government has also waived or reduced the levy payable to the Protection of Wages on Insolvency Fund for a period of time.

3. Other Potential Costs

In addition to the government fees, you should also budget for other expenses, particularly if you're using Bestar:

• Company Secretary Services

  
  

  Mandatory for all Hong Kong limited companies. Annual fees for this service can range from HK$3,500 to HK$10,000.

  
  

• Annual Return Filing

  
  

  A mandatory annual filing with the Companies Registry. The government fee for this is HK$105 if filed on time. Late filing will result in significantly higher penalties.

  
  

• Statutory Documents

  
  

  Fees for preparing documents such as the Articles of Association.

  
  

• Registered Office Address

  
  

  A registered office address is a mandatory requirement for all Hong Kong companies. It must be a physical address (not a P.O. Box). Bestar offers this as a standalone service or as part of a package.

  
  

  • Cost: Annual fees for a registered office address range from HK$1,000 to HK$3,000.

    
    

  • What it includes: The service provides you with a physical address to receive official mail from government bodies like the Companies Registry and Inland Revenue Department. It includes basic mail handling and notification services.

• Accounting and Auditing Services

  
  

  Every Hong Kong limited company is legally required to maintain proper accounting records and have its financial statements audited annually. This is a significant cost, and it's highly recommended to use Bestar for this.

  
  

  • Accounting/Bookkeeping: The cost of accounting services depends on the volume of transactions. For a small business with a low number of transactions (less than 100 per year), fees can start from around HK$5,000 to HK$10,000 annually. More complex businesses with higher transaction volumes will pay more.

    
    

  • Auditing: Audit fees are based on the company's revenue, assets, and the complexity of its operations. For a small, service-based company, the cost can start from as low as HK$5,000 to HK$8,000. For a trading company with more transactions and inventory, the cost will be higher, starting from HK$7,000 and upwards.

• Bank Account Opening Assistance

  
  

  Opening a corporate bank account in Hong Kong can be challenging, especially for non-residents. Banks have strict due diligence requirements. Bestar offers assistance to streamline this process.

  
  

  • Cost: Fees for bank account opening assistance can range from HK$2,000 to HK$5,000 or more.

    
    

  • What it includes: The service involves preparing the required documents, introducing you to the bank, and assisting with the application process. It's important to note that Bestar's fee does not guarantee a successful bank account opening, as the final decision rests with the bank.

How Bestar can Help

Engaging a professional service provider, such as Bestar, to handle your company registration in Hong Kong offers numerous advantages, particularly for non-residents or those unfamiliar with the local regulations.

Here is a breakdown of how Bestar can help:

1. Expertise and Guidance

• Navigating Complex Regulations: Hong Kong has a straightforward but precise company formation process. Bestar is experts in the Companies Ordinance and other regulations. We can guide you on the most suitable business structure for your needs (e.g., a private limited company, sole proprietorship, or branch office), which has long-term implications for taxation and liability.

  
  

• Compliance from Day One: We ensure all documentation, from the Articles of Association to the incorporation forms, is prepared accurately and in compliance with Hong Kong law. This minimizes the risk of errors that could lead to delays, rejection of your application, or even penalties.

  
  

• Avoiding Pitfalls: Bestar is up-to-date with any changes in government policies and procedures, such as the Significant Controller Register requirements or new anti-money laundering regulations. We help you meet these obligations from the start, preventing future compliance issues.

2. Time and Efficiency

• Streamlined Process: Bestar can handle the entire registration process on your behalf, including the name search, document preparation, and submission to the Companies Registry and Inland Revenue Department. This saves you significant time and effort, especially if you are not in Hong Kong.

  
  

• Faster Incorporation: With our experience and established procedures, we can complete the incorporation process quickly and efficiently, sometimes as fast as within a few hours for a simple company structure through online e-filing.

  
  

• Digital Convenience: Bestar offers a fully digital onboarding process. You can submit documents and verify your identity online, without needing to be physically present in Hong Kong.

3. Comprehensive and All-in-One Services

Bestar offers a suite of services beyond simple registration, acting as a one-stop-shop for your business needs:

• Mandatory Requirements: They can provide the legally required Company Secretary and a Registered Office Address, two essential components that must be in Hong Kong.

  
  

• Bank Account Assistance: This is a major challenge for many non-resident founders. Professionals have established relationships with local and international banks and can assist with the complex application process, document certification, and scheduling meetings, significantly increasing your chances of success.

  
  

• Post-Incorporation Compliance: Our services extend to ongoing compliance, including:

  
  

  • Filing the mandatory Annual Return (Form NAR1).

  • Preparing and filing the Profits Tax Return with the Inland Revenue Department.

  • Acting as a liaison with government bodies for any official correspondence.

    
    

• Other Value-Added Services: Bestar offers additional services such as bookkeeping and accounting, auditing, tax filing, payroll management, and even visa application assistance, allowing you to focus on your core business.

4. Risk Mitigation

• Reduced Fines and Penalties: Failure to comply with Hong Kong's corporate and tax laws can result in heavy fines and penalties. A professional service ensures all deadlines are met and all filings are accurate, protecting you from financial and legal risks.

  
  

• Enhanced Credibility: A professionally registered and maintained company projects a sense of legitimacy and trust to potential clients, partners, and investors.

  
  

In short, while it is possible to register a company in Hong Kong yourself, using a professional service provider is a highly recommended and cost-effective approach for most foreign entrepreneurs. We provide the expertise, local knowledge, and comprehensive support needed to ensure a smooth and compliant business setup and ongoing operation.

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