Hong Kong: Incorporating a Private Limited Company in Hong Kong

Generally speaking, a Hong Kong limited company can be incorporated with any name (except for names which are the same as existing company names) and it must be incorporated with an English name or a Chinese name or both.

A Chinese name may be a translation or transliteration of the English or wholly unconnected, but must end with the characters for ‘limited company’ as in the case of English name requiring the name must be ended with the word "Limited" except for charitable organization and with the approval of the Registrar of Companies.

The memorandum of association may set out, among other things, the objects and powers of the company.

The Articles of Association are the regulations or by-laws of the company. The company may either incorporate the regulations contained in Table A of the Companies Ordinance (which contains standard articles) or adopt its own set of regulations in the articles themselves subject to the law. Articles may include a wide range of special provisions to meet individual situations, such as special classes of shares, and pre-emptive rights on the transfer of shares.

Every company must have at least one shareholder which can be either persons or corporations, with no residency requirements. A person or corporation must subscribe to the memorandum and articles of association and thereby become the first shareholder of the company upon its incorporation.

The amount of share capital with which the company is to be registered must be stated as well as the par value of the shares. The capital can be denominated in any currency. There is no minimum requirement as to the amount of authorized share capital. Shares may be issued either fully-paid or partly-paid.

A capital fee is payable to the Government on the nominal amount of the authorized share capital and a fee at the same rate is payable on the amount of any premium on the issue price of shares over their par value.

The company must have a registered office in Hong Kong.

Normally, it will take approximately 7 working days for a company to be incorporated.

A private company must have at least one director and there is no residency requirement. The first directors are generally appointed by the subscribers to the memorandum and articles. In the case of a company which has not notified the Registrar of Companies of any appointment of directors, the subscribers to the memorandum or certain of them may be deemed to be directors.

Where a private company has only one member and that member is the sole director of the company, the company may in general meeting nominate a natural person who has attained the age of 18 years as a reserve director of the company to act in the place of the sole director in the event of his death.

A secretary must be appointed and must be a resident in Hong Kong. A sole director cannot also act as secretary of a private company.

Anyone commencing business in Hong Kong must register that business with the Business Registration Office within one month after the date of its incorporation. The current annual business registration fee is HK$2,600.00

A profit and loss account and a balance sheet must be audited and laid before the shareholders in general meeting within 18 months after incorporation, and thereafter at least once in every calendar year. Hong Kong private companies are not in general required to file accounts in any public registry; however, there are exceptions for companies engaged in certain types of business.

A directors’ report must be prepared in conjunction with the annual accounts, containing the statutorily required information; this includes details of contracts with the company or certain companies with which it is associated which are significant in relation to their businesses and in which any director has a material interest.

An annual general meeting of the shareholders must be held within 18 months after incorporation and thereafter once at least in every calendar year and not later than 15 months after the last annual general meeting.

Before the annual general meeting is held the directors must meet to approve the accounts and directors’ report and recommend any dividend (where relevant), and to resolve to call the annual general meeting. Copies of any audited accounts to be considered at the annual general meeting must be sent to all shareholders and other persons entitled before the date of the meeting unless agree otherwise.

For companies having a share capital, an annual return must be filed with the Registrar of Companies at least once in each year except in the year of incorporation. The annual return contains, among other things, particulars of the authorized and issued share capital of the company and the names of its directors and registered shareholders.

Hong Kong adopts a territorial concept of taxation. The current tax rate applicable to corporations is 17.5% and unincorporated businesses is 16%.

Our Corporate Services Department provides comprehensive services for the formation and maintenance of limited companies incorporated in Hong Kong or offshore companies. If you would like to know more about setting up a Hong Kong company or if there is any particular jurisdiction other than Hong Kong that you are also interested in, please feel free to contact us.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.