FAQ concerning a company in Hong Kong

The companies created are of the “Private Limited company” type. Your company name will therefore be followed by “Limited” or “Ltd”. This is a limited liability company whose number of shareholders cannot exceed 50.

In the case of a ready-made company, we provide you with a list of companies from which you can choose the name you want. In the case of a company created at your request, you can give it the name you want, subject to two conditions: The name must not already be taken. When placing your order, you will be asked to provide us with 2-3 names ranked in order of preference. We will then inform you of their availability, which can also be checked on the ICRIS website; it must not contain any word referring to the banking system or having an official connotation (“bank”, “fund”, “municipal”, etc.). Please feel free to contact us to confirm the availability of a company name.

Yes, and it is accessible via the ICRIS website at this address: http://www.icris.cr.gov.hk/. Please note that access to certain information on this website is subject to a fee.

The legislation governing a company registered in Hong Kong (“Companies Ordinance”) is available at this address: https://www.cr.gov.hk/en/companies_ordinance/index.htm. As of January 1, 2014, for new companies, and by July 1, 2014, for existing companies, the regulations require that at least one director of a Hong Kong company be a natural person (“The company must have at least one director who is a natural person”). This is stated on page no. 494, paragraph no. 457 of the Companies Ordinance No. 28-2012.

We cannot make decisions on behalf of the company or operate the company's bank account. This is strictly regulated and protected by law.

English and Chinese are the two official languages in Hong Kong. Therefore, all documents we provide to you will be at least in English. All communication with our company will be in French. If you do not understand a document in English, we remain available to explain it to you in French.

The “Memorandum” is the document describing the company’s activities. In accordance with local practices and Hong Kong law, we provide a standard, universal Memorandum allowing you to conduct all commercial activities. However, certain activities require authorization (banking, insurance, and other licenses), while others are prohibited (casinos, etc.). On the “Business Registration Certificate”, we list the activities as: “Trading, Investment and Consulting”.

The companies we create generally have an authorized maximum share capital of HK$10,000, consisting of 10,000 shares of HK$1 each. We issue only the number of shares you want when the company is incorporated. There is no obligation to deposit all the capital, either when the company is incorporated or later. Basically, if one shareholder owns 100% of the shares, we issue just one share. For example, if two shareholders have a 60% and 40% split of the capital, we issue 10 shares, with 6 shares for one and 4 shares for the other shareholder. If you wish to welcome new shareholders, you simply need to issue new shares (there is no tax in this case if you do not exceed 10,000 shares). The share can be sold at any price you wish; the difference between the purchase price and the “nominal” value of HK$1 is called the “premium.” Please note that there is no additional tax if the authorized maximum share capital exceeds HK$10,000, but we advise you not to exceed this amount because it is the usual share capital of a company in Hong Kong and therefore will not cause any problems when opening your bank account.

The timeframes are as follows:

• Preparation of your company's registration documents following confirmation of your order: 24 hours. They will be sent to you by email. You will then need to print, sign and return them to us by post (the originals are required);
• For company registration (from receipt of the signed documents at our Hong Kong office):
  • "Express" procedure (No additional cost = included in our package): - Ready-made company only: transfer of ownership within 24 hours. - For a company registered at your request: 2 business days for company registration (you must be present in Hong Kong to sign the company registration documents on site).
  • "Standard" procedure (No additional cost = included in our package): 7 business days for company registration from the date we receive your letter containing the signed original registration documents (which we will have sent to you beforehand by email).

Your company’s address is a registered office address in a real office (not a P.O. box number). We can therefore receive your mail there (Air Mail, FedEx, DHL, etc.). However, this office does not allow you to receive your clients.

Whenever we receive mail for your company, we notify you by email. We can hold it for later shipment, scan it for you, and/or forward it to you by post whenever you wish, to any address of your choice. Forwarding/scanning mail once a month is included in our package.

Stamp Duty is calculated at 0.13% for the buyer and seller, for a total of 0.26% of the net asset value stated in the company's audited/management accounts OR the agreed share transfer price OR the consideration paid. The Stamp Duty office will use the highest amount to calculate the stamp duty.

We offer: – Shared telephone number in Hong Kong. – Telephone answering service: someone answers in English and Chinese. We offer these services included in our package. Private numbers are also possible (contact us).

We provide a quotation, invoice, and purchase order template in Microsoft Excel format in English and Chinese free of charge as part of our package. Please note that we now offer our clients free installation of an online invoicing and accounting software.

A nominee is a person (individual or company) representing a beneficiary whose purpose is to protect the beneficiary’s identity. Therefore, by using nominees, the beneficiary’s name will not appear on the registers that are public in Hong Kong. Please note that we no longer offer nominee services (either for directors or partners).

The annual operating costs of a Hong Kong company are HKD 18 000 per year. Details of our package are provided on the Package overview page.

In the event of the death of a shareholder of a Hong Kong company, regardless of whether the deceased left a will, the beneficiaries must first contact a lawyer in Hong Kong to obtain a Grant of Representation from the Probate Registry of the High Court of Hong Kong before they can manage the deceased's assets in Hong Kong. Once the executor or administrator has obtained the Grant of Probate / Grant of Letters of Administration from the High Court of Hong Kong, the shares belonging to the deceased may be transferred to the beneficiaries by way of a transmission of shares. When the beneficiaries provide us with the Grant of Representation, we prepare the documents that must be signed by the executor/administrator on behalf of the deceased and the beneficiaries. Our fee for transmitting the shares to the beneficiaries is HKD 12000 per person. If the shareholder was also a Director of the company, the fee for removing the Director is HKD 2500, and the fee for appointing a new Director is HKD 2500.

Keeping accounts and having them audited annually are mandatory. WARNING: just because the Authorities do not ask you to submit your audit report to them does not mean that you should not keep your accounts and have them audited annually! Keeping accounts and having them audited annually are the responsibility of the company's Director. It is not the responsibility of the Company Secretary to keep these accounts, but rather that of the company's Director. We invite you to read this page concerning bookkeeping and the performance of an audit for a company registered in Hong Kong.

Taxation in Hong Kong is calculated on a territorial basis. Therefore, only profits sourced in Hong Kong are taxed at the maximum rate of 16.5%. Profits sourced outside Hong Kong are not subject to any taxation. Dividends are exempt (there is no tax or withholding tax on distributed dividends). Our advisers are available to answer your questions. If you would like to consult the official legislation, please visit the IRD website: http://www.ird.gov.hk/eng/paf/bus_pft_tsp.htm

“De-registration” is the simplest, fastest, and least expensive solution for closing a company. The company must have no debts and must have paid all taxes due. It takes approximately 1 year to dissolve the company. WARNING: final financial statements must be issued and a liquidation report prepared by a certified Auditor in Hong Kong to close the file with the IRD (Hong Kong’s tax authority). The cost of dissolving a company is HKD 25,000 (excluding accounting/audit fees). This includes maintaining the company throughout the dissolution process and renewing the Business Registration Certificate, where applicable. Warning: if a company does not pay its annual renewal fees, the Hong Kong authorities reserve the right to pursue the debtors in their country of origin. We therefore strongly advise against leaving a company unrenewed and recommend proceeding with its dissolution in such cases.

Advantages:

• A ready-made company is immediately available. As soon as you sign the share transfer documents, the company is yours. You therefore save approximately one week of waiting compared with a company incorporated at your request (tailor-made company).
• You can purchase a company with an established history (with an additional charge for each year of history for the reimbursement of the Business Registration).

Disadvantages:

• You must choose a company name from our lists (contact us to receive our list, which usually includes more than 500 companies). You can subsequently rename it, but this incurs a fee of HKD 6000.
• Your company's renewal fees are payable on the anniversary of your company's registration date. Therefore, if you choose a company registered, for example, in December 20XX, the next fees will be payable in December 20XX+1, regardless of the date on which you acquired your company.

Yes, we can offer jurisdictions other than Hong Kong according to your needs through our group and partners. In that case, we invite you to contact us to confirm your requirements.

Two possibilities:

1. Nothing has been planned: in this case, the transfer of the company’s shares falls within the estate of the deceased;
2. Prior transfer of shares: in certain cases, it is possible to arrange a transfer of the company’s shares whenever you wish, with the person or persons of your choice as the buyer(s). From a banking perspective, as the company’s new shareholder(s), this person or these persons will regain access to the company’s bank account.

We always invite you to provide us with the name and contact details of a trusted person of your choice in case we are no longer able to reach you, to ensure the continuity of your company. In accordance with the law and in the event of a dispute, we will follow to the letter all instructions provided to us in writing.

The following documents are issued:

• Instrument of transfer: identifies the seller and the buyer, and the number of shares transferred;
• Sold note: document for the buyer indicating the number of shares purchased;
• Bought note: document for the seller indicating the number of shares sold.

These documents are stamped by the Hong Kong Registries, thereby confirming their official recognition.

If you have not subscribed to a nominee associate service, we issue the following documents:

• Resignation document for the company's current director;
• Appointment document for the company's new director

To sell shares in your Hong Kong company, please send us by email:

• A scanned copy of the new shareholder’s passport;
• A scanned copy of proof of address dated within the last 3 months for the new shareholder;
• The percentage distribution of shares among all shareholders.

We will then prepare all the documents for all parties to sign and send them to you by email. You must then print, sign, and return them to us by post (the originals are required). Once they are received at our Hong Kong office, the transfer will take effect within 3 business days. It is therefore not necessary for either the seller or the buyer to come to Hong Kong to transfer the shares in your company. The cost is HKD 6000 per share transfer transaction, plus stamp duty of 0.2%, payable to the Inland Revenue Department Stamp Duty Office based on the net value of the shares OR the price agreed between the buyer and the seller, whichever is higher being used for the assessment.

We will email you your invoice for your company's annual renewal fees approximately 1 month before the anniversary of your company's incorporation date (this date is indicated on your Certificate of Incorporation).

We offer registered office addresses for your company in the following districts of Hong Kong: - Kowloon (the cost is included in our package); - Wanchai (+1600 HKD per year); - Central (+3200 HKD per year).

Following the incorporation of your company and once we have received all the documents from the Registries, the following documents will be sent to you by FedEx worldwide to an address of your choice or handed to you in person when you visit Hong Kong (we can also keep them):

• Certificate of Incorporation (“Certificate of Incorporation”)
• License to conduct business in Hong Kong (“Business Registration Certificate”)
• Company constitution (“Memorandum & Articles of Association”)
• NC1 Form (official company incorporation form)
• Director Written Resolution for bank account opening (minutes for opening the company’s bank account, indicating the authorized signatory for the bank account)
• 3 chops: round chop, signature chop, common seal

Following your company’s registration, you will receive 3 stamps. Common uses: - The « round chop» is normally used to issue receipts. - The «signature chop» is normally used to sign contracts. - The «common seal » is normally used to sign official contracts or legal documents (Power of Attorney, for example).

If your company is tax-exempt in Hong Kong, you do not have to substantiate your expenses. Misuse of corporate assets therefore does not apply. If the authorities conduct an audit to determine whether or not your company is taxable, all your personal expenses are recorded in the accounts as dividend advances.

According to the tax definitions of several countries and in accordance with the OECD’s 4th Directive, Hong Kong is not an offshore jurisdiction and therefore cannot be classified as a tax haven like the BVI, the Seychelles, Nevis, etc. Indeed, Hong Kong’s tax system is territorial (only activities carried out outside Hong Kong are exempt) and is not linked to a legal status for companies registered there (such as “International Business Companies” in many tax havens). Finally, Hong Kong is included on the OECD’s white list of countries.

Depending on your needs, we offer another jurisdiction besides Hong Kong (as an alternative to or in addition to a company registered in Hong Kong). Like Hong Kong, this jurisdiction is not perceived as a tax haven while having zero taxation. We invite you to contact us for more details.

Yes, absolutely. In that case, you will need to provide us with a copy of the company's incorporation documents and identify its shareholders (the "Know Your Customer" procedure).

A “transfer to us” consists of changing your Company Secretary and Register Address to ours (Merritt Asia Limited and our registered office address for your company). We usually refuse companies that were not incorporated by us because, as we do not know the work previously carried out by the former Company Secretary, we cannot determine whether all filings (company registration, banking, tax, and social security filings) were properly completed “according to professional standards,” as required in this profession. This could expose us to liability in the event of a dispute with the authorities. However, we consider transfer requests on a case-by-case basis, so please contact us regarding this matter.

The minimum age to be an individual shareholder of a company in Hong Kong is 18.

Hong Kong is not an “offshore jurisdiction” as this term is often defined for certain jurisdictions (such as the Seychelles, BVI, Panama, the Bahamas, Nevis, etc.). In fact, companies incorporated in Hong Kong are “common-law” companies (Private Limited Companies) and are therefore subject to Hong Kong taxes (“profits tax”). It is the fact that their activities carried out outside Hong Kong are not taxed that gives Hong Kong a favorable tax regime, not the company’s legal status (like the “International Business Companies” of the countries listed above). However, according to the comments on the OECD Guidelines, a territorial tax system (such as in Hong Kong) is not a criterion for being defined as a “tax haven.” This is also confirmed by the national legislation of several countries (France, Belgium, etc.), which do not classify Hong Kong as a country with a preferential tax regime.

You can always find something cheaper… but at what cost? At first glance, our offer may (sometimes) seem more expensive than some other offers on the Internet, but this is because we include several services and consultations in our package in order to provide an “all-inclusive” product (some providers deliberately advertise a low setup price and then charge for services during the year that are mandatory to comply with local regulations...). We therefore issue you only one invoice per year, including all filings, follow-up on your file, mail forwarding/scanning, etc. Please note that, as part of our package, throughout the life of your company, we advise you on all issues relating to your company. We are the only provider in Hong Kong to offer such a service in French. Finally, please note that we are a “Company Secretary” in Hong Kong (Merritt Asia Limited), not resellers like many websites found on the Internet. You can therefore be assured that you are dealing directly with an authorized local agent with French-speaking staff on its team. We are therefore in direct contact with the Authorities (the Registry and the Tax Administration), which enables us to respond quickly to all official requests.

This is entirely possible, but please note:

• Having an employee in HK may subject your company to HK profits tax, as it will be difficult to justify that your business is then conducted outside HK. This will also require you to file annual accounts and have an annual audit carried out for your company. Regarding contributions, only the “Mandatory Provident Fund” (MPF) is due (5% of the salary paid). Our package includes the annual payroll return (Employer’s return), which is mandatory even if the company has no employee in HK.
• For an employee outside HK, no social security contributions will be payable in HK. However, this employee will generally have to be declared in the country where they are physically located (so local social security contributions will be due).

It is not possible to hire an employee in China (meaning “Mainland China”) through a company registered in Hong Kong. In terms of immigration and labor law, China and Hong Kong are two different countries. To employ someone in China, there are three possibilities: – Set up a company in China (WFOE); – Open a representative office for your Hong Kong company in China (please note: the Hong Kong company must have been established for at least three years); – Use a payroll outsourcing company that will employ the employee and re-invoice your Hong Kong company for their salary and social security contributions. We are qualified to assist you with all three solutions.

We can purchase a prepaid card from a Hong Kong operator for you, activate it, and mail the SIM card back to you. It is valid for 6 months (simply top it up to renew it; we can do this for you, or you can do it online). No identification is required for this service (available exclusively to our customers).

Please note that we systematically reject all complex structures that are not economically justified. We are not qualified to draft a trust deed. Regarding structures involving multiple tiers of companies, we reject them whenever it is not possible to clearly identify the ultimate beneficiary or beneficiaries.

A Company Secretary is an authorized agent who represents your Hong Kong company before the Hong Kong Authorities. The duties of a Company Secretary are established by law, and they may act on behalf of the company only before the Authorities in connection with the company’s legal compliance (tax and social security filings, administrative procedures related to the transfer of shares, changing the company’s name, appointing a director, etc.). They do not have access to the company’s bank account and are in no way a director (“manager”) of the company. Our company, Merritt Asia Limited, is authorized to represent you: we are not resellers but an agent regulated by the Authorities and authorized to represent you.

As Hong Kong is located outside the European Union, no intra-Community VAT number is issued following your company’s registration. However, it is entirely possible to obtain one if necessary. We invite you to confirm this with your freight forwarder or a tax representative in Europe.

Following the September 11, 2001 attacks, the European Commission and the Member States decided to establish a system to secure commercial exchanges entering and leaving the European Union. This is the purpose of the “security and safety amendment” to the Community Customs Code, which established a Community database making it possible to identify, by means of a unique number, each economic operator that has dealings with the customs administrations of the European Union. The EORI number (short for Economic Operator Registration and Identification) is used to identify economic operators and other persons in their dealings with customs authorities. A company from Hong Kong can therefore obtain an EORI number from the customs office where it conducts its first operation.

Creating and managing a company in Hong Kong does not automatically grant you a Hong Kong residence visa. Obtaining a residence visa is a separate procedure from establishing and managing your company. We invite you to consult the Hong Kong residency criteria on this website: http://www.immd.gov.hk/ehtml/hkvisas.htm

Creating and running a company in Hong Kong does not automatically entitle you to a Hong Kong residence visa. Obtaining a residence visa is a separate process from setting up and managing your company. We invite you to consult the Hong Kong residence criteria on this website: http://www.immd.gov.hk/ehtml/hkvisas.htm

We work with lawyers who can offer you:

• Optimization of customized contractual arrangements
• Drafting of contractual commitments (subcontracting agreements, service agreements, general terms and conditions of sale, etc.)
• Contract negotiation and monitoring
• Legal support for sales teams
• Drafting, proofreading, and translation of legal documents
• Assistance with trademark registration, patent filing, etc.

We work with lawyers who can offer you:

• Optimization of customized contractual arrangements
• Drafting of contractual commitments (subcontracting agreements, service agreements, general terms and conditions of sale, etc.)
• Contract negotiation and monitoring
• Legal support for sales teams
• Drafting, proofreading, and translation of legal documents
• Assistance with trademark registration, patent filing, etc.

This is entirely possible, but please note that having an employee physically located in Hong Kong could result in your company being taxed in Hong Kong (contact us to confirm this point).

Following the registration of your company, we will provide you with (sent by FedEx to the address of your choice or handed to you in person when you visit Hong Kong):

• Certificate of Incorporation
• Business Registration Certificate
• Copies of all documents sent to the Hong Kong Companies Registry*
• Memorandum & Articles
• Share Certificate book
• Statutory Book
• 3 stamps: Common seal (dry metal stamp), Signature chop, Round chop
• Invoice, quotation, and purchase order templates / access code for the invoicing and accounting software
• Email address and website

In the event of late renewal of your annual licence (Business Registration Certificate), the late renewal penalties (including the penalties charged by the Registries and our reminder fees) are as follows (from the anniversary date of your company’s registration):

• Less than 15 days: HKD 1500;
• Between 16 days and 1 month: HKD 2600;
• Between 1 and 3 months: HKD 3600;
• More than 3 months: HKD 3600 + HKD 1200 per month of delay.

Please note that if the company is not renewed or dissolved within 42 days of the company’s registration anniversary:

• HKD 5100 to reappoint the company’s Company Secretary;
• The company will receive a summons to appear before a Hong Kong judge to explain this delay. The judge will then determine the amount of the fine. Failure to appear will result in legal proceedings being initiated by the Hong Kong Authorities.

As our liability as Company Secretary may be involved, we will AUTOMATICALLY resign from all our appointments (Company Secretary, nominee service, registered address) before these 42 days! It will then be necessary to reappoint the Company Secretary in order to renew the company (cost: HKD 5100).

There are several websites on the Internet listing Chinese suppliers. The Trade Development Council offers a database of suppliers and products manufactured in China (Hong Kong, mainland China, Taiwan).

As Hong Kong is a signatory to the Hague Convention, it is indeed possible to obtain apostille certification for any document issued by a company registered in Hong Kong. Please note that it usually takes around ten days to obtain, and the cost varies depending on the type of document to be certified and the number of pages. It is also possible to obtain simple certification from a Notary Public or a HKCPA (Hong Kong certified public accountant).

Our package includes advice on validating your setup (to ensure that it complies with regulations) and monitoring it throughout your company’s lifetime. The time spent responding to you is shared among all our clients. Consequently, we do not charge for time spent responding to you by email, phone, Skype, or during appointments at our offices.

Our team has the following expertise:

• French- and English-speaking international tax lawyers.
• French- and English-speaking accountants.

Consequently, we usually meet all our clients' needs. If your needs exceed our expertise, we can call on members of our network.

We are the only ones to include consulting in our package because, in addition to having the necessary expertise in-house, we believe that setting up a company in Hong Kong requires high-quality support to avoid unnecessary risks, allowing entrepreneurs to focus fully on their business. Our team consists of professionals who can address all your needs. In addition, with our French-speaking office, this advice and support are provided in French. This means you are not alone in your project and can rely on a reliable, long-term team.

You can pay our invoices:

• By bank transfer to our account in Dubai;
• In cash at our offices in Hong Kong.

Companies in Hong Kong do not have a TIN number. If necessary, you can use the number on your Business Registration Certificate (BR), see https://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers/Hong-Kong-TIN.pdf The term "TIN" stands for "Tax Identification Number" in English, which can be translated into French as "Numéro d'Identification Fiscale" (NIF). However, in Hong Kong, it is important to note that the concept of a TIN does not directly apply as it does in other jurisdictions. In Hong Kong, companies do not have a Tax Identification Number as such. Instead, each company is assigned a "Business Registration Number" (BRN) when it registers with the "Inland Revenue Department" (IRD), Hong Kong's tax department. The BRN is used for tax identification purposes and is generally printed on the company's "Business Registration Certificate." It is important to comply with tax obligations in Hong Kong and ensure that the company has all the necessary documents, including the Business Registration Certificate, to conduct its activities legally and transparently.