Frequently Asked Questions

At least one shareholder and director are above 18 years or more, their nationality is not restricted. Chinese resident or overseas person holding passport or ID card can incorporate a Hong Kong Limited Company. A Hong Kong address must be supplied to be the registered address and a Hong Kong resident or professional company must be act as statutory secretary of the Company.

Yes, Hong Kong Companies Ordinance has no limitation on the nationality of shareholder and director.

The government processing time is usually 5 working days.

No, it must be filled. However, it may not be unspecific to protect the company from exposure to public.

No, business registration certificate does not restrict the scope of business of the company which refers to main business activities of the company, business registration certificate will not restrict the expansion of other business of the company.

You can consult the Companies Registry to check the legal statue of a company. The banks must check the validity of the company during the application of bank account opening, it is another proof of legal registration.

Usually, the record can be found on the Companies Registry after 14 working days from the date of complete incorporation.

The Company incurs obligation on only the issued shares, there is no obligation on un-issued shares.

No, Limited Company must have its name contain the words either “Limited Company” (Co, Ltd) or “Limited” (Ltd) for indication that shareholders shall bear limited liability for future obligation.

No, only Traditional Chinese characters are allowed.

Yes, it is allowed.

No, it is not allowed. English company name must be provided.

Chinese or English, Arabic numbers can be included in the name but Chinese and English cannot be used together.

Yes, the word “Bank” or “Insurance” must not be allowed unless respective licensees are acquired, and any words that is misleading people to believe it has any relation with Government are disallowed.

Yes. Name change is allowed.

No. For example, a company doing property agent business cannot use “Property Agent” as only its name. Neither “Propety Agent Limited” nor “Property Agent Company Limited” are allowed.

Shelf Company is a Hong Kong Limited Company which has been incorporated and is being held by others but without any activiy. Certificate of Incorporation, and other documents required by law are ready-made. It does not have any records of business activities.

In general, Shelf Company does not conduct business activity and open bank account prior to its disposal, so it is brand-new and no potential risk in purchasing Shelf Company.

1. Certificate of Incorporation
2. Business Registration Certificate
3. The Company’s Articles of Association

Yes. As if a newly-incorporated company, the intended company name shall also be checked with Companies Registry , the Shelf Company can apply from Companies Registry for change of name only if it is available. It will take about 14 workdays for Company Registry to process.

Directors’ rights and obligations are as follows:

• To take charge of ordinary operations and decisions of the company
• To keep accounting book and business record
• To take charge of bank account management
• To secure the loan borrowed with the company’s property
• To propose profits distribution scheme
• To propose authorized capital increase scheme
• To convene meetings of shareholders
• To execute resolutions passed at meetings of shareholders

Shareholders’ rights and obligations are as follows:

• To take part in meetings of shareholders, and entitled to voting power in proportion of shareholding
• To understand the operating and financial conditions of the company
• To elect and to be elected as members of Board of Directors
• To obtain dividends
• To pre-empt shares transferred by other shareholders
• To subscribe in priority the shares newly issued by the company
• To have distribution from the remaining property after liquidation of the company
• The meeting of shareholders shall consider and pass the annual auditors’ report
• To employ or dismiss directors in shareholders meetings and determine directors’ remuneration

Yes. The shareholder and director of the company can be the same person.

At least one shareholder and one director, both can be acted by a same person.

Yes. Kindly be reminder that at least one of the Directors of a Limited Company must be natural person.

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Yes. All information of limited company registered in Hong Kong, including names, addresses and shareholding percentage of shareholders and names, ID card numbers or passport numbers and addresses, shall be available to the public. If the information of shareholders and directors want to be kept confidentially, Nominee Director & Nominee Shareholder service shall be considered.

According to the Hong Kong Companies Ordinance, limited company shall appoint a Company Secretary (i.e. Statutory Secretary). The function of Company Secretary is as follows:

• to be in charge of arranging meetings
• keeping minutes of meetings
• and presenting statutory documents to governmental department in order to ensure the company meets statutory requirements.

Yes. According to the Hong Kong Companies Ordinance, limited company shall appoint a Company Secretary.

Hong Kong resident over 18 years old for a person, or limited company registered in Hong Kong for corporate entity.

No. Company Secretary must be either a Hong Kong resident or a Hong Kong Limited Company.

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Another company Hong Kong company can be employed, such as, Hong Kong Certified Public Accountant, to provide the service of statutory secretary.

Yes. Company to be registered in Hong Kong needs a Hong Kong registered address. All of the government letters will be posted to this address after registration.

Registered Address Service in Hong Kong should be considered.

Yes. A company can apply for change of its registered address at any time, and notice the government as soon as possible.

Yes. All information of limited company registered in Hong Kong, including names, addresses and shareholding percentage of shareholders and names, ID card numbers or passport numbers and addresses, shall be available to the public.

No. For your information, BUSINESS REGISTRATION CERTIFICATE shows the register address.

Yes.

Yes. However, we highly recommend that a company should utilitze bank accounts of the company to handle company’s transaction instead of the owners’ personal bank accounts, to provide for accounting and auditing of the company.

Shareholders and directors must be present for the account opening. However, requirements for shareholders to present can be different from one bank to the others.

Bank will generally ask the company to provide the following documents:

• The original minutes of meetings approving opening of account
• Certificate of incorporation (copy certified by accountant)
• Business registration certificate (copy certified by accountant)
• Notice of appointment of director and secretary (copy certified by accountant)
• Articles of Association (copy certified by accountant)
• ID card/passport of each director
• Personal address proof of each director

Yes. Hong Kong banks does not impose restriction of nationality of bank account owners and account operators. They must be the owner of valid passport or travel permit and ID card.

No. The operation of account can be delegated to third party through delegation, in addition to operation by shareholders and directors perse.

No. Directors who take part to open bank account in Hong Kong should come to Hong Kong to meet with the bank representive and process relevant procedures.

No. Capital in Hong Kong is freely circulated without limitation.

No. Capital is free to come in and go out of Hong Kong, without any restriction.

Yes. A compnay can open more than one account according to needs.

Generally, no. Most of Hong Kong banks do not charge handling fee.

Generally, the banks require that around HKD5,000 shall be deposited as minimum amount.

Generally, 2 weeks.

• Capital flow is not restricted.
• Hong Kong dollar (HKD) is the 8th most traded currency in the world.
• Hong Kong dollar (HKD) is maintained highly stability of exchange rate to United Stated dollar(USD) at US$1:HK$7.75–7.85 (May 2005 onwards).

Before the end of April every year, all Hong Kong Companies are required to submit a Employer Return to the IRD detailing the remuneration paid to its employees during the year to 31 March. Even if a company has no employees it is required to advise IRD that no remuneration has been paid.
Please note adherence to the above compliance requirements is strictly enforced in Hong Kong and failure to comply with deadlines will result in penalties and possible court summons.

Yes. According to Companies Ordinance, A local private company must in respect of every year deliver its annual return to the Registrar of Companies for registration within 42 days after the anniversary of the date of the company’s incorporation in that year (the prescribed time period). Besides we need to fill in a Business Registration application form for the coming year and file it with Inland Revenue Department.
Normally for new company registration, the audit report is required when Inland Revenue Department send the Tax Return to registered address after 18 months of incorporation. The Tax Return should be filled in accordance with a audit report prepared by Certified Public Accountant in Hong Kong.

By Companies Ordinance, a penalty will be levied on the company if filing of company renewal document is done after the date of renewal. The Registrar of Companies does not have power to waive the higher registration fees prescribed in the Companies (Fees) Regulation (Cap. 622K).

Every Hong Kong company is required to renew its Business Registration Certificate on an annual basis by paying a registration fee to the Hong Kong Government.
Please note adherence to the above compliance requirements is strictly enforced in Hong Kong and failure to comply with deadlines will result in penalties and possible court summons.

Yes. The Hong Kong Government charges the application of Certificate of Incoroporation (C.I.) and Business Registration Certificate (B.R.), and also annual return filing every year for renewal of the company’s legal statue.

All Hong Kong companies are required to file an annual return
manually signed by a director or the secretary of the company once in every year. However, a private company which is deemed to be a dormant company under the Companies Ordinance is exempt from filing annual returns.

The company have to file, once in every year, an annual return made up to the anniversary date of incorporation of the company (the made up date) within 42 days after that date (the prescribed time period).

Panelty. The company, every director, secretary and manager of the company are liable to prosecution and, if convicted, default fines. The maximum penalty is HK$50,000 for each breach and a daily default fine of HK$700. In addition, a substantially higher registration fee is payable for the late filing of an annual return.

It can entrust professional Certified Public Accountant’s firm to process. The company only needs to provide invoices, monthly bank statements, bills, pay record and other information, in which to help conduct accounting and auditing work.

The government will make reference (may be adjusted upwards or downwards depending on the circumstances of each case) to the following penalty loading scale on the amount of tax undercharged:

• First offence: 10% / 20% if the return is filed after two or more estimated assessments are issued.
• Second offence within 5 years: 20% / 30% if the return is filed after two or more estimated assessments are issued.
• Third or subsequent offences within 5 years: 35% / 50% if the return is filed after two or more estimated assessments are issued.

• Consent by all shareholders
• The company is not running or operating any business, or stopped operation more than 3 months before applying for deregistration
• No unpaid indebtedness, including government charges and taxes
• It shall obtain the Notice in Writing of No Objection issued by the Commissioner of Inland Revenue

Yes, but subject to one of the following conditions:

• Its parent company or subsidiary, or its directors, shareholders and others consent to pay the debts
• Creditor’s execute consent to give up recover the debts

The following are needed:

• Certificate of Incorporation
• Business Registration Certificate
• Latest annual return
• Latest financial statements

Generally, at least 6 months.

Not necessarily. A Hong Kong Limited Company incorporated more than 18 months ago, in case that Inland Revenue Department has issued the profits tax return, shall complete the return, together with one copy of financial statements audited by Certified Public Accountant and presented to the Inland Revenue Department.

Yes. The company still needs to present annual return until the Companies Registry notifies the company it is deregistered.

Hong Kong Company needs only to pay Profits Tax every year, which is calculated by 16.5% (2007/08:17.5%) of the profits. The company without profits needs to pay no Profits Tax.

No. Dividends are not taxable. Therefore, a Limited Company can only pay dividends after profits tax is deducted.

Generally, 31 March and 31 December of each year. As a favorable policy to the newly setup companies, they are allowed to take maximum 18 months for its first year’s basis period of taxation.

Generally, the accounting year ends on 31 March or 31 December. The end date of another month is not limited.

Except tobacco, liquor, and petroleum. Generally, imported/exported commodities need not pay tariff, but import/export commodities must be declared at customs.

Yes. Losses incurred in a taxable year can be carried forward and used to offset the profits of the company in subsequent years.

Yes. Donation granted to recognizable charitable organization is permitted to be deducted, the total donation as required cannot be less than $100 and not more than 35% of assessable profits.

Profits Tax should be levied according to the actual profits incured within the taxable year. However, the profits of one year shall be determined only after the end of year, Inland Revenue Department will levy provisional tax before the end of that year. After the profits of relevant year are assessed in the following year, the provisional tax already paid can be deducted from the Profits Tax payable of this year.

Yes. Generally speaking, a company has neither set up an office in Hong Kong nor hired employees in Hong Kong, and profits do not generated from Hong Kong, then its profits will not be acccessed for Profits Tax.

No. This Hong Kong company is deemed as conductng agency service (a kind of business activities) in Hong Hong.

You need not report dividends paid to shareholders of a limited company because dividends are not taxable. On the other hand, salaries and directors’ fees received by directors are chargeable to Salaries Tax.

It is not necessary to report for the proprietor / any partner of an unincorporated business or his spouse. The remunerations paid to such person are not allowable deductions under the Inland Revenue Ordinance and have to be adjusted in computing the profits chargeable to Profits Tax.

The purpose of the passport number and the HK Identity Card number is to help identify the taxpayer. To avoid the opening of double tax files for the same employee, you should supply the HK Identity Card number. However, if the employee does not have a Hong Kong Identity Card number , you can fill in his/her passport number and the country of issue. You then have to follow up with the employee. You should update his/her personal records when the Hong Kong Identity Card number of the employee is known.

No. One of the couple should apply for all child allowance. Generally speaking, it is more favorable for one of the couple who earns higher income to apply for child allowance. However, if one of the couple is assessed at standard tax rate, it is more favorable for the other to apply for child allowance.

If taxpayer, his/her separated or divorced spouse and other person are all entitled to apply for child allowance of one unmarried child, the Commissioner of Inland Revenue shall determine the basis for allocation of the child allowance according to each applicant’s contribution to the nurture and education of that child.

Depending on conditions. If child meets the requirements of application for child allowance, his/her parent whether duly married or not, can apply for this child allowance.

If you raise one child over 18 but under 25 years old, this child should receive full-time education during relevant taxable year before you can obtain this child allowance. According to your case as referred to, your son has received full-time education from April to June of this year, so you are eligible to apply for this child allowance.

In determining whether the dependent parents are usually living in Hong Kong, Inland Revenue Department will consider their social and economic relations in Hong Kong, the objective factors referable of which include:

• The number of days staying in Hong Kong
• Whether they have a fixed residence in Hong Kong
• Whether they have property to reside in foreign country
• Whether they have job or business activities in Hong Kong or foreign country
• Whether relative s are living in Hong Kong or in foreign country

Generally speaking, if dependent parents are living in foreign country for a long time, the number of days staying in Hong Kong is limited or only of home-visiting nature, then they will not be deemed to be always living in Hong Kong by Inland Revenue Department, even if they hold Hong Kong permanent resident ID cards.

If your dependent parents don’t want to continue living in Hong Kong, and only occasionally visit home located in Hong Kong, they will not be deemed to be always living in Hong Kong, which means you will not meet the requirements for application. However, if your parents only once in a while live in mainland, they will be deemed to be always living in Hong Kong, and you can apply for dependent parents allowance in respect of them.

Application for “dependent parent allowance” is subject to your parents’ residence, ages and dependence. If the dependent is always living in Hong Kong, aged 55 or above in this year, and given not less than $12,000 for a whole year, they are entitled to apply for “dependent parent allowance”, but need not to inputting the living cost actually paid in the year.

No. You are married, so you are not entitled to “single parent allowance” even if you pay the living cost of children by yourself. According to Inland Revenue Ordinance, “single parent” refers to taxpayer being single, widowed or separated all the year round, and who raised children solely or mainly by his/herself in that year, and only this kind of parent can obtain “single parent allowance”

In reviewing the application, Inland Revenue Department may require the applicant to present proof showing that the dependent is qualified to apply for government’s disability allowance. If the dependent has applied to Social Welfare Department for disability allowance, taxpayer can provide the file number of application for allowance to hereby certify. But if the dependent has no claim for the allowance under governmental disability allowance scheme, Inland Revenue Department will require the taxpayer to present a copy of medical appraisal report signed by public hospital or certified doctor, according to the disability defined under Comprehensive Social Security Assistance Scheme or Social Security Allowance Scheme, to certify that the dependent is qualified to place a claim for disability allowance with the Government, in respect of his/her disability. And Inland Revenue Department can also accept this medical appraisal report as the proof of qualification for disabled dependent allowance.

Yes. Foreign national needs to pay Salaries Tax on its salary received during the employment in Hong Kong, but the following conditions can exempt the foreign national from Salaries Tax:

• Consecutively or accumulatively staying in Hong Kong not more than 183 days during one tax period
• This remuneration is not paid by Hong Kong employer or its representative
• This remuneration is not borne by enterprise set up in Hong Kong by foreign employer