Basic requirements of a Hong Kong company
4 minute read
If you envision setting up a business overseas, you may want to consider Hong Kong. Now you might be wondering as to what makes Hong Kong a preferred business destination, right? Well, getting started here is relatively easier and quicker than anywhere else in the world.
Moreover, with a low setup cost and a pro-business government, you can make the most of the business-conducive environment in Hong Kong. Most importantly, a foreign national can own 100% of the business in Hong Kong. You may choose to be the sole director and shareholder of the company. Setting up a company in Hong Kong opens up the gateway to spread your business in Asia, allowing you to benefit from a huge market.
Type of companies
The most common type of companies registered in Hong Kong is a private company limited by shares which has a separate legal identity. It can enter into contracts (even with its members or directors), take legal action, be sued, or own property as a natural person.
The liability of its shareholders is limited to the share capital they had subscribed. Let’s look into the basic requirements of a private company limited by shares:
Company name – It is important to determine the name of the company. The company name can be either in English or Chinese or with both English and Chinese name. However, the company name cannot be in a combination of English and Chinese characters. The English company name must end with the word “Limited” and a Chinese company name must end with the characters “有限公司”.
The company name cannot be the same as or too similar to the name of a company which already exists in the records of the Companies Registry and the Trade Marks Register of Intellectual Property Department. For more details, please click here. There is no reservation for company name. Sleek could help to conduct the proposed company name search. Result is available on the same day and it is free of charge.
Articles of Association – The articles are the company’s constitution and provide a set of regulations for the conduct of its management. A company must have articles, which must be printed in English or Chinese and divided into paragraphs which are numbered consecutively.
A company may prepare and print its own articles but it is very common to adopt the Model Articles for private companies limited by shares which is available on the website of the Companies Registry.
Share capital – There is no minimum or maximum requirement of share capital. It can be in any number and currency. However, only registered shares can be issued, bearer shares are not allowed. The most common scenario would be one shareholder with 1,000 to 10,000 ordinary shares of HKD1 each. The shares, subject to the directors’ approval and stamp duty, are freely transferable.
Shareholders – A minimum of one shareholder and a maximum of 50 shareholders. A director and shareholder can be the same or different person. The basic requirements of a shareholder are:
- Can be an individual or a body corporate
- Of any nationality or residence
- On incorporation, the first shareholder is called the founder member
Directors – At least one individual director (i.e. a natural person) is required for a Hong Kong company and there is no limit on the maximum number of directors, unless it is fixed in the Articles. A corporate director is allowed provided that there is already an individual director and the company is not a member of a group of companies of which a listed company is a member. The basic requirements of a director are:
- Attained the age of 18 years
- Not an undischarged bankrupt
- Of any nationality or residence
- A share qualification is not required, the director need not be a shareholder of the company
- No specific professional qualification is required
*Advisory note: All directors of the company are advised to read ‘A Guide on Directors’ Duties’ published by the Companies Registry and acquaint themselves with the general duties of directors outlined in the Guide.
Company Secretary – Every company must have a company secretary who is responsible for maintaining the statutory records, filing statutory returns, ensuring compliance with the statutory requirements etc. The basic requirements of a company secretary are:
- Either an individual or a body corporate
- If an individual has to be attained the age of 18 years and a Hong Kong resident
- If a body corporate which must have its registered office or place of business in Hong Kong and hold a valid TCSP license issued by the Registrar of Companies
- If the company has only one director, the sole director cannot act as the company secretary of the company
Sleek holds a TCSP license and could act as company secretary of your company with a very competitive price.
Registered Office – The company must have a local Hong Kong address as the registered office address of the company. PO Box is not accepted as a registered office address which has to be a physical address.
Sleek can provide an address in the heart of the central business district of Hong Kong as the registered office address of your company and it is at a very competitive price as well.
Designated representative – A company must designate at least one person as its representative to provide assistance relating to the company’s significant controllers register to a law enforcement officer.
A company’s designated representative must be either a shareholder, a director or an employee of the company who is a natural person resident in Hong Kong or, alternatively, an accounting professional, a legal professional or a person licensed to carry on business as trust or company service provider (i.e. TCSP licensee).
Sleek is a TCSP licensee that could act as the designated representative of your company. Talk to us today.