Company formation in Hong Kong requires you to provide a nominee director, a licensed insolvency practitioner, and a licensed bonded public official. Besides, you need to provide a nominee shareholder and a licensed repository. If your company is a Limited Liability Partnership (LLP), then you need to have a shareholder who is also a licensed agent. Once all these documents are submitted to the Registrar of Companies at the Commercial Registry office in Hong Kong, your company gets an identity. It can do business on the open market. In this article, you will read about the benefits of company formation in Hong Kong.
Hong Kong corporate formation benefits include getting tax benefits, such as exemption on income tax, corporate tax, and income taxes until you transfer your remaining stake in the company to your spouse or other beneficiaries. After you complete the formalities, you may start trading. You need to followup with the company periodically by sending quarterly reports to the shareholders. You can get help from the company secretary, who is also responsible for sending annual messages to the shareholders.
The next benefit of company formation in Hong Kong is that you get easy access to professional financial and banking services. There are many sources for corporate financing in this city, including banks and professional institutions such as investment banks, investment management firms, and corporate financing agencies. These sources of funding give you easy access to capital for your start-up companies. There are many options for obtaining start-up financings, such as debt financing, equity financing, debentures, commercial mortgage loans, and preferred stock offerings.
One of the essential benefits of company formation in Hong Kong is its ability to limit its liability. It also protects the company against lawsuits. By incorporating a company, you are protected from personal liabilities, tax debts, business bankruptcies, and cases. Moreover, the formation of a company insures against the insolvency of the company. It is because the rules of the law protect individuals who are the directors of a company.
One of the essential benefits of company formation in Hong Kong is that you are not required to open a separate bank account. The company is considered a private limited company, and there is no need to open a bank account. If you want to do so later, you have the option of doing so. After you have become an active director in the company, you will receive an annual return from the shareholders. Thus, once you have become a permanent member of the company, you will have to make the monthly payment in addition to your regular salary.
Other than these two significant benefits of company formation in Hong Kong, there are some lesser-known benefits. For instance, you have the right to manage your company expenses and gain tax benefits. Another benefit is the exemption from paying income tax for the first one to two years of operation. You are also entitled to enjoy flexible working hours and shift to another office if you become disabled or decide to transfer to a new location. You will also enjoy more affordable health benefits and dental benefits than employees in most countries.
You have to followup on bank accounts opening and other related transactions, such as the repayment of loans, mainly if you chose to make the payments via online banking. In case of any failure, you should immediately inform the company director. However, three banks in Hong Kong allow you complete privacy when dealing with your company registration and corporate formation. These are HSBC, WLL, and SCMP.
The best method of securing a loan for your start-up company in Hong Kong is to raise venture capital. Venture capital is obtained through banks, business angels, or registered investment companies. Business angels and registered investment companies usually provide start-up companies with financial support without any commitment. If you decide to use the services of business angels, you will have to pay a fee based on the percentage of equity you have secured through your assets. On the other hand, registered investment companies provide funding on a long-term basis. However, when deciding to apply for a bank loan or a loan from Hong Kong government agencies, you should follow the guidelines provided by the Monetary Authority of Hong Kong or the PRK.
Hong Kong corporate formation