Companies that wish to expand and grow in the international market must register a business in Hong Kong. For most companies, it is a cheaper option than establishing a new business in another country. Companies that choose to open a new branch in another country need to pay hefty red tape fees and licensing fees. On the other hand, Hong Kong companies are only required to pay a simple, standard business registration fee. Moreover, company formation in Hong Kong has numerous other benefits, making it the preferred choice for foreign companies looking to establish a base in the Chinese-speaking region.
First, HK business registration entitles the foreign company to enjoy several tax benefits. Companies must pay no income tax to Hong Kong’s government, instead of paying corporate taxes to the local taxation authority in the place of business. It means no more paperwork and delays. Also, foreign companies must pay no capital gains tax to the Monetary Department of Hong Kong either, if the funds they have in their bank or account are more than Hong Kong currency, which means that the money must be kept in the same coin.
Companies are also entitled to enjoy many other benefits of company registration in Hong Kong. After completing the formalities, a foreign company is obliged to register its office and branch in a registered office, or office building. This office must be located at a location that meets all the requirements of the law. Foreign companies are also obliged to get a business licence from the Registry of Companies and pay a one-off registration fee. All these costs are only a fraction of what it would cost to register a business in China.
Registration of a company also allows a foreign company to use its original or chosen name. The name of the foreign company must comply with the laws of Hong Kong. Moreover, an HK business registration must ensure that its registered agent or secretary is a resident of the territory with its registered office. The foreign company’s agent or secretary may be a person of the same gender and age as the company’s owner and may be of any age. And he/she may not be a direct relative of the owner.
Besides completing the process of business registration, companies also need to choose a registrar. It could be an individual or a company, but it is usually the latter that makes the decision. Many registrars are available, including the China Exchange Registration Commission (CEORC) and the Foreign Trade Register (FTR). However, the most popular among entrepreneurs and companies in the China Business Registration Database (BDR). When choosing a registrar, an entrepreneur or company must consider whether its services are offered for free, or whether it charges a registration or administration fee.
The primary purpose of having a business registration office in Hong Kong is to facilitate exchanging information between different countries. Therefore, the office should have offices in other places, especially with the significant economic zones like Causeway Bay and the New Territories. An excellent example of a registered office is YYZ Limited, which has its registered office in the New Territories. Other essential points to consider when choosing a registered office include proximity to the banking institutions in Hong Kong (if applicable), proximity to the airport, and proximity to the central commercial districts in Hong Kong.
After choosing the registered office, the company needs to decide where the registered office address will be. Again, the choice depends on the intention of the company and its purpose. A good example is the beverage industry. Companies that deal with the production, processing and sale of alcohol must have their own registered office. If the business operates across different China regions, the company would need a different registered office address from one area to another. For example, if the company is a distributor of drinks manufactured in the United States, it would need to register its principal place of business in the United States and its subsidiary locations in the United Kingdom and Australia.
The next stage involves sending the application to the registered office, which will process the application and issue its company incorporation document, including the necessary documents. The published paper is the company incorporation certificate, which is the invitation for all shareholders to transact business with the company. It is usually called the “blue sheet” because it has a blue background, just like the stock market. However, after the business registration process is completed, each of the companies’ registered offices must deliver one copy of the company incorporation certificate to each of its shareholders.