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Frequently Asked Questions
Corporate taxation in Hong Kong
What is the current applicable corporate tax regime for a Hong Kong private company?
Hong Kong SAR adopted territorial tax regime under which only incomes derived inside Hong Kong are subject to corporate income tax. The two-tier tax rates applied for the fiscal year 2018/19 onwards are presented below:
- Net assessable income of the first 2mil HKD is taxed at 8.25%
- The remainder is taxed at 16.5%
In addition, there are no sales, capital gains, most interest and dividend incomes, withholding taxes in Hong Kong.
How can I estimate the cost of starting a business?
The cost for incorporating your business can be various and depend greatly on your business types, capital structures, industries, etc.
Some businesses need significant initial capital to start, while others such as micro-businesses and home-based companies have lower financial entry barriers.
One common way to estimate your incorporation cost is by drafting a business plan. Within your plan, the financial section should show your approximate revenue, profit, and expenses.
There are other ways to estimate your finances as well, such as our Hong Kong Cost Planning Tool. The tool will help you break down all initial costs of your business, so you know how much capital you should prepare when incorporating.
What are initial requirements to register a Hong Kong company?
- Minimum one director and one shareholder, which can be the same person.
- A local registered address in Hong Kong.
- A local company secretary, which can be a Hong Kong resident (above 18 years old) or Hong Kong registered company.
How long does it take to set up a company in Hong Kong?
It normally takes only 1 working days for e-filing and registration.
Can foreigners open company in Hong Kong?
Yes. A Foreigner is allowed to take up 100% ownership in a Hong Kong company and can be the sole director and shareholder.
Company directors/shareholders/beneficial owners
What is the minimum director/shareholder of Hong Kong private company?
Minimum one director and one shareholder are required. Moreover, at least one natural person must be appointed as a director. Corporate directors are only approved with specific conditions.
A person can be the sole director and shareholder of a company. But the sole director cannot be company secretary of the same company.
Are registers of directors/shareholders disclosed to the public?
Yes, information of directors and shareholders must be filed for registration with the Company Registrar. The company is also responsible for identifying company’s significant beneficial owners and have to register with the Registrar.
What is the requirement on minimum registered capital?
There is no required minimum registered capital to open a Hong Kong private company, and the standard is HK$10,000.
What classes of shares are allowed to be issued by a private company?
Ordinary (registered shares), preferred shares, voting and non-voting shares, share with no par value, redeemable shares, shares with special voting rights.
What are required conditions to maintain a private limited company in Hong Kong?
- Maintaining one director, one shareholder;
- Maintaining local registered address and local company secretary;
- Renewal business registration certificate;
- Annual return filing;
- Tax return filing with audited financial statements.