Jurisdictions - HK
Background of HK
Offshore profits tax free
Major international trade, commercial and banking center
Increasingly high statutory compliance demands
Hong Kong is a former British Dependent Territory which became a Special Administrative Region of the People of Republic of China with effect from 1 July 1997. Hong Kong continues to have high autonomy in the running of its affairs under a one country, two systems concept. Hong Kong remains a relative powerhouse in world trade and with a comparatively small population of more than 7 million, is one of the top twenty trading economies, the world of third largest financial center, and vies with Singapore as the largest container port by volume. Hong Kong remains the most significant gateway into Southern China.
Law And Taxation
Hong Kong's corporate law is strongly based on the British common law. Local businesses are regulated and Hong Kong regards itself as a low tax center rather than a tax haven. Taxes are levied on profits, salaries and property with varying rates. Only profits derived in Hong Kong are assess able for taxation and genuine offshore transactions are not subject to Hong Kong tax, although the Inland Revenue Department (IRD) is extremely diligent in its determination of onshore and offshore profits.
Due to Hong Kong's role as a major trading and entry point to the mainland and Asia, the bulk of companies formed in Hong Kong are for trading purposes generally.
There are in excess of 980,000 companies incorporated in Hong Kong. With implementation of the Integrated Companies Registry Information System (ICRIS) on 28th February 2005, the new Companies Registry Electronic Search Services became available for checking company information. Numerous banks, stockbrokers and finance houses as well as all the major international legal and accounting firms are present in Hong Kong. Hong Kong is also well-served by local secretarial, corporate management and trust companies, and has an efficient modern and dynamic banking system that is designed to assist the international business community.
Chinese names are permitted and can be included on a company's Certificate of Incorporation.
Each Hong Kong company must have a local secretary and a local registered office which must be a physical address and not just a Post Office box.
Each company must have at least one director and corporate directors are permitted for companies that are not subsidiaries of public listed companies.
The company should have at least one shareholder. Details of the company's directors, shareholders and secretary must be filed at the Companies Registry and are on public record.
Each year the company must submit an annual return and penalties apply for late filings and there is an ever increasing vigilance by the Companies Registry for this purpose.
All companies must obtain a Business Registration Certificate from the IRD and are required to file a set of audited accounts with the IRD annually.
Company names may be expressed in both English and Chinese characters.