Hong Kong Background of Forming a Corporation
Hong Kong is known as a former British colony which actually started to be a Special Administrative Region of the People’s Republic of China coming into effect from 1 July 1997. This area goes on to contain superior autonomy in the operating of its important affairs under a “one country, two systems” principle. With a comparatively small population of more than 7 million, Hong Kong continues as a comparative giant in global trade, one of the top twenty trading economies, the world’s third largest financial centre and the largest container port when it comes to volume. In addition, this commercial heaven remains the most significant entrance into Southern China.
Hong Kong’s corporate law is founded on British Common Law. Local businesses are governed and the region considers itself as a Low Tax Centre rather than a Tax Haven. The government levies taxes on profits, salaries and properties at varying rates. And on 11 February 2006, estate duty was completely abolished. Even if the Inland Revenue Department is remarkably diligent in its determination of onshore and offshore profits, only profits derived in Hong Kong are accessible for taxation and genuine overseas dealings are not subject to the tax. Because this area plays a role as a main trade and entry bridge to the Mainland and Asia, the majority of companies formed in this Special Administrative Region are usually for trading purposes.
Chinese names are authorized and can be included on a company’s Certificate of Incorporation. And it is necessary to express the names in both English and Chinese characters. Besides, each Hong Kong Company needs to have a local secretary and a local registered office which must be a physical address and not just a Post Office box. At the same time, a minimum of one director is indispensable and corporate directors are permitted for enterprises that are not subsidiaries of public listed companies. What’ more, the company ought to have no less than one shareholder. Information of the company’s directors, shareholders and secretaries must be filed with the Companies Registry and put on general public record. Each year the company should send in an annual return and penalties in order to make an application for late filings and there is ever-increasing extreme caution by the Companies Registry in this respect. All companies ought to get a Business Registration Certificate from the Inland Revenue Department and are demanded to document a set of audited accounts with the Inland Revenue Department annually.
More than 1 million companies were incorporated in Hong Kong. A great number of banks, stockbrokers and finance houses together with all the leading global legitimate and accounting firms are present in Hong Kong. This place is additionally well-served by native secretarial, corporate management and trust companies, and has a reliable, advanced and potent banking system which is designed to support the international business community.