Buying a company in Hong Kong: how to start
Hong Kong is a special administrative region of China and one of the world's financial centers. The economy of the territory is based on a free market, low taxation, and the government does not interfere with the market. Opening an offshore in Hong Kong is relevant, as the jurisdiction is an important center of international trade.
Nuances of business development in Hong Kong
Before you buy a company in Hong Kong, you need to build the structure of the future firm correctly. It must coincide with the requirements of the jurisdiction. It is necessary to analyze the pros and cons of opening a firm in this territory in advance.
Before opening an offshore company in Hong Kong, it is recommended to take into account current and future requirements for business activity and to determine the need to attract other investors to establish the company. The costs and possible tax consequences of using a certain tool in business are predicted in advance.
Registration of the company on the territory is relevant, as the procedure for opening is relatively simple. There is a possibility of buying a ready-made company or registering of the company "from scratch". To get consultance on company registration, please contact our experts at IT-OFFSHORE.
The advantages of starting a company
Most often, FIs, commercial partnerships or private entities with limited liability are registered in the jurisdiction.
The pros of starting a company in Hong Kong are the following:
- Jurisdiction is a reputable financial center;
- No personal presence is required to register a company;
- It is possible to obtain a tax exemption;
- The tax system in the territory is simple and clear;
- Hong Kong is a free port;
- There are no special requirements for the name of the company;
- The economy of Hong Kong is stable and developed, there is no corruption;
- The territory is advantageously located.
Opening a company that is not taxed is possible only in the case where there is an exemption from relevant payments. To obtain an exemption, offshore organizations must submit accounting reports and undergo certain inspections.
If a company has a tax exemption, it must not deal with local organizations or sell products in Hong Kong. If these conditions are not met, the firm will have to make tax payments.
Basic requirements for registration
When opening an organization, you need to select a suitable name. It must contain an abbreviated designation of the RPF. Some words cannot be used in the name, including those related to the government and state structures.
A director may be a resident of any state. A secretary is required to start a company in Hong Kong. They can only be a Chinese person over 18 years of age or a special company with appropriate powers.
There is a limit on the number of shareholders in an LLC. It is allowed to have from 1 up to 50 shareholders. If there are more than fifty shareholders, the company is considered to be a joint-stock company. It is obligatory to have a registered office when registering a company. The physical address must indeed exist.
Information about the shareholders of the company is public. Offshore companies may exist only in the non-resident form. They can be registered only in the case when activities are conducted outside the administrative district.
New company and ready-made firm
Previously, entrepreneurs gave preference to ready-made companies, given that those allow to start working quickly and eliminate the need to spend time on registration. However, starting a company from scratch is a fast process nowadays.
The main reason why entrepreneurs buy companies in the administrative district is the respectability of the jurisdiction. The more years the firm has been operating, the higher its value, prestige and credibility. After buying a ready-made firm, the investor can change the name, appoint other directors and make other adjustments.
Setting up a new company also has its advantages. Registering from scratch is more likely to cost less than buying a ready-made company. From the very beginning, it is possible to choose a suitable name for the company, find the address and OFF, and to appoint a director. There is no need to make changes.