Key Processes to setup a company

Hong Kong is one of the top global cities to set up a business. Getting started is relatively quick and easy, setup costs are low and the overall environment encourages businesses to thrive. The procedure for establishing a family office is similar to setting up any other company in Hong Kong, which need to comply with general legal, tax, and compliance reporting requirements.

Generally, if a single-family office does not engage in regulated activities under the Securities and Futures Ordinance in Hong Kong, it does not need to apply for a license from the Securities and Futures Commission. Feel free to get in touch if you need help.

World’s Freest Economy with No Capital Control

Hong Kong has been consistently ranked top on economic freedom and competitiveness. The free flow of capital within, into and out of Hong Kong is guaranteed under Article 112 of the Basic Law. Business in Hong Kong also benefits from free flow of information and people.

Rankings:

Freest economy: World’s No.1 since 1996 (Fraser Institute, Canada), World’s No. 1 (1996-2019)(US-based Heritage Foundation)
Economic openness: World’s No.1 (Legatum Institute: Global Index of Economic Openness 2019)
Business-friendly taxes: World’s No.2 business-friendly tax system (PricewaterhouseCoopers LLP and the World Bank Group: Paying Taxes 2020)
Competitiveness: Among the world’s top 5 (International Institute for Management Development: World Competitiveness Yearbook 2020); Worlds’ No.3, East Asia & Pacific’s No.2 for global competitiveness (World Economic Forum Global Competitiveness Report 2019)
Easiest place to do business: Worlds’ No.3 (World Bank: Doing Business 2020)

Decide on a company type and name

Company Types
Different company types are available for different business requirements.

A Limited Company:

This is the most common company type
This is a company which is incorporated in Hong Kong
Owners can take advantage of all the tax benefits and concessions available to any fully incorporated business
They can enjoy benefits such as the Closer Economic Partnership Arrangement (CEPA), a free trade agreement with Mainland China.

A Branch Office of a Parent Company:

This is for companies that are incorporated outside of Hong Kong and establish a place of business in Hong Kong
They must register with the Companies Registry as a ‘Registered Non-Hong Kong Company’ within one month of establishment
Unlike a subsidiary limited company, a branch office is not a separate legal entity from the parent and can leverage funds off the credit rating of its owner.

Representative Office:

They cannot engage in profit-making activities and can only fulfil limited functions
They are useful for companies looking to explore the Hong Kong market before making a larger investment
If a decision is made to enter into a transaction which creates a legal obligation, it must change the business to a limited company or branch office.

Company Names
Limited companies incorporated in Hong Kong cannot have the same company name as those in the index of company names kept by the Registrar of Companies. You may conduct a company name search free of charge through the Companies Registry’s e-Services Portal.

Company Structure
Most limited companies incorporated in Hong Kong are private companies limited by shares.

A private limited company in Hong Kong requires at least one director who is a natural person and one company secretary. If the company has one director only, the sole director cannot also be the company secretary at the same time. If the company secretary is a natural person, he/she should ordinarily reside in Hong Kong. If the company secretary is a body corporate, its registered office or place of business should be in Hong Kong. A non-Hong Kong resident can be appointed as a director.

The registered office of the company must be situated in Hong Kong.

There is no requirement for shareholders to be Hong Kong residents. The sole shareholder can be a director of the company.

Incorporate a Company

Easy Application
Any application for company incorporation will include a simultaneous application for business registration.

How to Apply
There are two ways to submit your application –either online via the 24-hour e-Services Portal of the Companies Registry (CR), or by delivering the documents in hard copy to the CR with the correct fees.

Required documents:

Incorporation Form (Form NNC1 for company limited by shares) or Form NNC1G (for company not limited by shares);
A copy of the company’s Articles of Association
A Notice to Business Registration Office (IRBR1)

Fees
The fees for incorporating a company limited by shares are:

Incorporation
Company Registration fee – The fees (excluding Business Registration Fee and Levy) payable for applications for incorporation of companies delivered in electronic form through the e-Services Portal has been reduced by 10% with effect from 1 October 2020. Please refer to www.cr.gov.hk/en/services/fees.htm for the latest fees details.

Processing Time
Online applications for company incorporation and business registration are normally processed within one hour. Hard copy applications will typically see the Certificate of Incorporation and Business Registration Certificate issued within four working days.

Register the Business

Easy Registration
Applications for company incorporations includes a simultaneous application for business registrations. Apart from the incorporation documents, you must also deliver the following to the Company Registry (CR) when you make your application for company incorporation:

A Notice to Business Registration Office (IRBR1)
Business registration fee: Please refer to the business registration fee and levy table for current charges.
Levy to the Protection of Wages on Insolvency Fund: HK$150 for a one-year certificate; HK$450 for a three-year certificate*

*Please note there might be some concessions from time to time.

Processing Times
Applications for business registration made in paper form will have their business registration certificates issued in 30 minutes over the counter, or in two working days by post.

Business registration certificates applied under the one-stop company incorporation and business registration service will be issued together with the Certificate of Incorporation by CR, normally within one hour for online applications or four working days for hard copy applications.