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How do I set up a subsidiary company in Hong Kong?

How do I set up a subsidiary company in Hong Kong?

Setting up a subsidiary in Hong Kong involves several steps:

  1. Choosing a Company Name: Pick a unique and suitable name for your subsidiary. It can be in English, Chinese, or both. You can then check its availability with the Companies Registry.

  2. Appointing Company Officers:  Hong Kong law mandates appointing at least one director and one shareholder for your subsidiary. The company secretary, if an individual, must be a Hong Kong resident. Alternatively, a qualified body corporate can serve as the secretary. An auditor who is a member of the Hong Kong Society of Accountants is also mandatory.

  3. Company Registration: Prepare and submit the following documents to the Companies Registry:

  • Completed Incorporation Form

  • Company's Articles of Association (defines internal rules)

  • Notice to Business Registration Office

  • Identification documents, proof of residence, and bank letters for directors and secretary (if individual)

  • Parent company's incorporation documents (Certificate of Incorporation and Articles of Association)

  1. Business Registration Certificate: After company incorporation, register with the Inland Revenue Department to obtain this certificate, mandatory for operating your business.

  2. Opening a Corporate Bank Account: Once registered with the Companies Registry and Inland Revenue Department, you can open a corporate bank account for your subsidiary.

  3. Business Licenses: Depending on your industry, you might need additional business licenses from relevant authorities before commencing operations.

Additional Considerations:

  • Hong Kong has a low corporate tax rate and a business-friendly environment, making it an attractive location for subsidiaries.

Why set up a subsidiary company in Hong Kong?

There are several compelling reasons to consider setting up a subsidiary company in Hong Kong:

Business-Friendly Environment:

  • Simple and Efficient Setup: Hong Kong boasts a streamlined company incorporation process, making it easier and faster to establish your subsidiary compared to many other locations.

  • Favorable Regulatory Framework: The common law system in Hong Kong is well-established and transparent, providing a predictable legal environment for businesses to operate in.

  • Excellent Infrastructure: Hong Kong has a strong financial infrastructure, excellent communication networks, and world-class transportation links, facilitating smooth business operations.

Tax Advantages:

  • Low Corporate Tax Rate: Hong Kong has a territorial tax system with a maximum corporate tax rate of 16.5%. Profits generated outside Hong Kong are generally not subject to local taxes.

  • Tax Treaties: Hong Kong has an extensive network of double taxation treaties, minimizing tax burdens for businesses operating internationally.

  • Simple Tax Regime: Hong Kong's tax system is straightforward and transparent, reducing tax compliance complexities for your subsidiary.

Strategic Location:

  • Gateway to Mainland China: Hong Kong's proximity to Mainland China and its established trade links make it an ideal location for businesses seeking to access the Chinese market.

  • Free Trade Agreements: Hong Kong benefits from numerous free trade agreements, offering your subsidiary potential tariff reductions for exports to various countries.

  • Global Connectivity: Hong Kong is a major international financial and trade center, well-connected to other parts of Asia and the world.

Additional Benefits:

  • Limited Liability: Establishing a subsidiary offers limited liability protection. The parent company's financial exposure is limited to the capital invested in the subsidiary.

  • Highly Skilled Workforce: Hong Kong has a well-educated and multilingual workforce, providing a strong talent pool for your subsidiary.

  • Reputation and Credibility: Having a subsidiary in Hong Kong can enhance your company's global image and reputation, particularly in Asia.

Overall, Hong Kong's combination of a business-friendly environment, favorable tax regime, strategic location, and additional benefits make it a compelling option for companies looking to establish a presence in Asia.

Here are some additional resources that can help you set up a subsidiary in Hong Kong:

How Bestar MY can Help

Here's how Bestar MY can help with setting up a subsidiary in Hong Kong:

Bestar MY is able to assist with the Malaysian aspects of incorporating a subsidiary in Hong Kong.

Bestar MY offers business incorporation services, which includes some aspects of setting up a subsidiary overseas.

Establishing a subsidiary in Hong Kong involves adhering to Hong Kong regulations as well.

Contact Bestar MY:  Inquire with Bestar MY to understand the scope of our services related to Hong Kong subsidiary setup. We have in-depth knowledge of the legalities and procedures involved.

Remember, this is a complex process, and it's always recommended to consult with qualified professionals to ensure a smooth and compliant subsidiary setup.

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