How do I set up a subsidiary company in Hong Kong?
Setting up a subsidiary in Hong Kong involves several steps:
Choosing a Company Name:Â 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.
Appointing Company Officers:Â Â 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.
Company Registration:Â 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)
Business Registration Certificate:Â After company incorporation, register with the Inland Revenue Department to obtain this certificate, mandatory for operating your business.
Opening a Corporate Bank Account:Â Once registered with the Companies Registry and Inland Revenue Department, you can open a corporate bank account for your subsidiary.
Business Licenses:Â 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:
The Hong Kong Companies Registry:Â https://www.cr.gov.hk/
Trade and Industry Department, Hong Kong:Â https://www.ird.gov.hk/eng/tax/bre.htm
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:Â Â 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.