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Economy Package |
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 £ 660.00 | Renewal fees from £500.00 | | |
 Hong Kong company incorporation normally takes 7 to 10 working days.
Search name availability for your Hong Kong company.
Payment of first year's government fees.
Capital duty of authorized capital at HK$10,000.
Application of Business Registration.
Applicant appointed as company founding Director.
Applicant appointed as company Shareholder.
HK$10,000.00 Authorised Share Capital.
Preparation & filing of Memorandum & Articles of Association at Registry.
Filing Notice of Register Office, Notification of First Directors and secretary, director's consent, shares allotment, transfer of shares, issuing share certificates and preparing Minutes of First directors' meeting.
Hong Kong Registered Agent (Secretary) & Registered Office fees for the first year.
The following documents will be delivered via FedEx or DHL:
Certificate of Incorporation.
10 booklet of Memorandum & Articles of Association (6 copies to clients, 4 copies keep in our office).
Minutes of the First Meeting of the Board of Directors.
Issuance of shares, Register of Shareholders, Register of Directors, Secretaries.
Share Certificates.
Renewal Fees (payable annually from the second year): Registered Address, Government fees.
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Premier Package |
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| £ 910.00 | Renewal fees from £750.00 | | |
Hong Kong company formation normally takes 7 to 10 working days.
Payment of first year's government fees.
Capital duty of authorized capital at HK$10,000.
Application of Business Registration.
Preparation & filing of Memorandum & Articles of Association at Registry.
Filing Notice of Register Office, Notification of First Directors and secretary, director's consent, shares allotment, transfer of shares, issuing share certificates and preparing Minutes of First directors' meeting.
Registered Agent (Secretary) & Registered Office fees for the first year.
We provide a company Nominee Director for the first year.
The following documents will be delivered via FedEx or DHL:
Certificate of Incorporation, Share Certificates.
10 booklet of Memorandum & Articles of Association (6 copies to clients, 4 copies keep in our office).
Minutes of the First Meeting of the Board of Directors.
Issuance of shares, Register of Shareholders, Register of Directors, Secretaries.
A nominee service agreement which provides for the indemnification of the nominees.
Pre-signed undated Resignation Letter from the Director.
Indemnity Letter to the Nominees.
General Power of Attorney. An indemnity Letter for General Power of Attorney.
Renewal Fees (payable annually from the second year): Registered Address, Nominee Director, Government fees.
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Deluxe Package |
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| £ 1077.00 | Renewal fees from £917.00 | | |
Hong Kong company registration normally takes 7 to 10 working days.
Payment of first year's government fees.
Capital duty of authorized capital at HK$10,000. Application of Business Registration.
Preparation & filing of Memorandum & Articles of Association at Registry.
Filing Notice of Register Office, Notification of First Directors and secretary, director's consent, shares allotment, transfer of shares, issuing share certificates and preparing Minutes of First directors' meeting.
Registered Agent (Secretary) & Registered Office fees for the first year.
We provide a company Nominee Director and Shareholder for the first year.
The following documents will be delivered via FedEx or DHL:
Certificate of Incorporation, Share Certificates.
10 booklet of Memorandum & Articles of Association (6 copies to clients, 4 copies keep in our office).
Minutes of the First Meeting of the Board of Directors.
Issuance of shares, Register of Shareholders, Register of Directors, Secretaries.
A nominee service agreement which provides for the indemnification of the nominees.
Pre-signed undated Resignation Letter from the Director.
Indemnity Letter to the Nominees, Declaration of Trust from the Nominee Shareholder.
General Power of Attorney. An indemnity Letter for General Power of Attorney.
Renewal Fees (payable annually from the second year): Registered Address, Nominee Director and Shareholder, Government fees.
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HK Company subscribers may be resident outside the Hong Kong.
The company is required to have a registered office in the Hong Kong.
You must appoint a minimum of 1 director.
There is no maximum number of directors.
Directors can be corporate bodies or private individuals.
A director can be of any nationality.
There has to be at least 1 shareholder.
The names and address of shareholders are not available to the public.
Shareholder and director may be the same person.
There is no requirement for appointing local shareholder and director.
There is no paid-in capital requirement.
The minimum paid in and issued capital may be one share which is fully paid.
Shares can be issued with or without par value.
Shares may be issued in any recognizable currency or in more than one recognizable currency.
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(click here for other packages)
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- DEAR VISITORS, Welcome to Coddan online Hong Kong Company formation agent. We recommend reviewing this site in its entirety, so that you are knowledgeable of Hong Kong jurisdiction and the powers granted to HK companies. We will guide you through the process of registering your company and establishing your registered identity. Complete and submit application form online. Adequate completion and submission of this form, along with the provision of payment, will enable Coddan to incorporate your proposed company within seven business days. We will express mail your corporate documents to the mailing address you specify in your formation order. If you want to become familiar with the description and the contents of Hong Kong company formation packages, offered by our company and to find above, what kind of service is included in this or that Hong Kong formation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the HK company formation within foreign countries, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.
Please note » The prices payable for the items that you order are clearly set out in the web site. There will be no contract of any kind between you and us unless and until we receive payment from you. We act as your agent in the formation of offshore companies. We are not able to guarantee that any such filing will be acceptable to Companies Registrar , nor are there any contractual obligation upon us to do so. If Companies Registrar rejects formation or other filing, we will credit your account with a full refund and the contract between us will be made void. Companies Registrar does not offer a cancellation facility for the formation of companies or the filing of documents. We will be unable to cancel any such submission on your behalf and will not refund any payment you have made. All prices shown at Coddan Web Site (www.coddan.co.uk) are in Great British pounds.
Live Help » Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours our business center will be closed. When you click on the button you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is absolutely free! There are no hidden fees. We offer the service as a courtesy to our website visitors.
Our company's main strength is its team, which comprises of more than twenty multi-discipline professionals, including association with commercial lawyers, accountants, company secretaries, bankers, international trade and investment specialists and experienced corporate administrators providing professional corporate services from our offices to clients all over the world. Our aim is to establish a close working relationship with our clients and, because of this, all new clients are provided with an initial consultation with no cost or commitment, which will enable them to evaluate the nature and scope of their specific requirements. We provide everything you need to easily and affordably incorporate your business in Hong Kong. Coddan provides complete and confidential Hong Kong corporate management services. Included are wide ranges of financial and administrative services to individuals and corporate entities, as a base for their international and local business activities in Hong Kong. Our mission is to provide high quality services to our clients over the long-term at competitive fees. You will find that we are able to render certain additional services exceedingly valuable when the time factor is of special importance.
Please pay careful attention to the following instructions if you plan to incorporate a private company limited by shares or guarantee company through Coddan. If you are interested in having Coddan provide nominee directors, nominee shareholders, bank account signatories, administrative or clerical services, or grant general power of attorney for the proposed company, you may order this service online.
We recommend reviewing this site in its entirety, so that you are knowledgeable of the Hong Kong jurisdiction and the powers granted to Hong Kong companies. Your reasons for incorporating in Hong Kong cannot be determined by Coddan, although we can refer you to the appropriate professionals for business planning, legal or tax advice. You should know who your shareholder(s), director(s) and officer(s) are, the overall structure and organization of your company, and you must confirm agreement by all parties involved before you proceed with the incorporation.
Complete and submit a Coddan limited company or guarantee company application form. Adequate completion and submission of this form, along with the provision of payment, will enable Coddan to incorporate your proposed company within five business days. To expedite the process, we recommend making full use of the Coddan Online Formation Form. All information submitted is strictly confidential.
Unless you are paying by credit card, wiring instructions will be provided separately upon application. The total amount due, including all government fees, must be paid in advance. Coddan will not incorporate your company and cannot release company documentation (including the Memorandum and Articles of Association, company seal, share certificates, etc.), or take further action on behalf of the company, until it has confirmation of your payment. Our Pricing Schedule is made readily available on this site.
We will express mail your corporate documents to the mailing address you specify in your formation order. If everything proceeds as planned, you will have all corporate documents within seven business days of your formation request. Your possession of these documents finalizes the formation process and grants you the right to use the powers of the company as provided for under Hong Kong law. If Coddan is serving as Director, we will retain the original documents and company seal, and send you a copy of the memorandum and articles of association.
 Please read the following before you get started: 
 Hong Kong Executive Summary
Hong Kong is a former British colony in South-East China, near Canton and Macau. With a surface area of 404 sq miles, Hong Kong is densely populated with 6.5m people. The capital city at Victoria, on Hong Kong Island, boasts one of the world's finest natural harbours. Hong Kong has one of the world's busiest international airports. Mean January and July temperatures are 16° C and 28° C respectively. 90% of average rainfall of 85 inches falls between April and October. Typhoons occur between July and October. Chinese and English are the official languages of Hong Kong. 99% of the people are ethnic Chinese. About 10% of the population are Christian with the balance being followers of Buddhism or Taoism. The major non-Chinese elements of the population are from British Commonwealth countries, the USA, Portugal and Japan. Since 1st July 1997 Hong Kong has been a special administrative region (SAR) of the Peoples Republic of China. The constitution is known as the "Basic Law" and is modeled on the constitution of the Peoples Republic. Under the guiding principle of "one country 2 systems" which was established before the handover the Chinese Government agreed that Hong Kong's capitalist system would remain unchanged until the year 2047.
The SAR's administration is headed by a Chief Executive, appointed by China. The Chief Executive appoints the Executive Council of Government. A legislative body, the Legislative Council passes laws and controls expenditure; its members are elected but the arrangements are undemocratic, so that the Executive can control a majority. This arrangement, established by the British, has not been changed since the handover. The SAR maintains a common law system; the regulation and taxation of business and financial services follow Western patterns. Hong Kong has thrived historically as a trading entrepot serving many Asia Pacific countries, and also as a low-cost manufacturing centre, although latterly the rise of cheaper Asian competitors has driven the SAR more into the provision of services, particularly financial services.
Hong Kong is the world's 3rd largest financial center (after New York and London), the 9th largest economy and the 11th largest exporter of services. GDP per capita exceeds that of Britain, Canada and Australia. The external assets of the banking sector are the world's 5th largest, forex turnover is the world's 6th largest and the Hong Kong stock market has the largest market capitalization in Asia outside of Japan. The territory has the largest representation of international banks in the world including 80 of the top 100 institutions and is the regional headquarters of over 714 multinational companies. Since 1992 the territory has had the world's busiest container port with throughput increases of up to 20% per annum. Its shipping register is considered a quality register and ranks 14th in the world.
The Government has consistently followed business friendly policies and continues to do so. Other Asia-Pacific countries and cities such as Shanghai or Singapore may mount effective competition to Hong Kong as financial/trading hubs, but they will probably not be able to replicate Hong Kong's unique blend of Western expertise and Chinese knowledge. As China opens up to the world through its membership of the WTO, Hong Kong is both the natural conduit for Chinese exports towards the West, and the obvious base for international companies taking part in opening up China's expanding economy.
Hong Kong is not an 'offshore' jurisdiction as such, but has low tax rates which are levied only on Hong Kong-source income. There is no capital gains tax, no withholding tax, no sales taxes, no VAT, no annual net worth taxes and no accumulated earnings taxes on companies which retain earnings rather than distribute them. Individuals pay no tax on investment income or capital gains, whether resident or not. Hong Kong spectacular economic success is largely based on a whole hearted adherence to free and open trade, the values encompassed in a British common law legal system and a laissez faire non interventionist attitude on the part of Government. As such there are few if any significant barriers to investment by foreigners. Indeed, government figures released in April 2001 revealed that Hong Kong received HK$64 billion of foreign direct investment in the year 2000, a significant increase from HK$15 billion in 1998 and HK$35 billion in 1999.
However, Hong Kong's economy suffered considerably during and after the Asian crisis in the late 1990s, and has yet to recover. Continued deflation and low property prices have been accompanied by higher unemployment and depressed levels of trade. Exports of both goods and services performed better in the second half of 2002, but locally, the depressed property sector and continued deflation sharpened the government's dilemma over a burgeoning deficit, leading to tax increases in the 2003/2004 budget. The emergence of the SARS epidemic in April, 2003, further dented the territory's chances of an early economic recovery, and the crisis of confidence in the government which erupted in July over new security laws has further wounded the current administration. However, business confidence seemed to be reviving in October, and the Asian Development Bank is forecasting 2.1% GDP growth for the year, followed by 4.8% growth in 2004.
- Hong Kong Types Of Company
In Hong Kong businesses normally trade as either limited companies, limited partnerships or sole proprietorships. Being a common law jurisdiction the concept of a trust is readily understood and widely used. The tight secrecy, minimal corporate disclosure and loose administrative requirements which characterize some island offshore common law jurisdictions and make these territories attractive locations in which to base commercial operations have no counterpart in Hong Kong, whose company and trust law are virtually identical to their United Kingdom equivalents. Private Company Limited by Shares. Corporate entities are governed by the provisions of the Hong Kong Companies Ordinance 1984 which brought the territory's company law into line with United Kingdom company law. Formation can take 1-2 weeks. Their key features are as follows:
Economy HK Limited Company Formation Package - £660.00. Hong Kong company limited by shares. There is no minimum authorized or issued share capital requirement. Shares of no par value and bearer shares are not permitted. Shares can be issued at a premium or discount (if sanctioned by the court). A company may purchase its own shares out of distributable profits. Nominee shareholders, directors and secretary are permitted. The minimum number of directors is one; corporate directors are permitted (unless the company is a public company). The articles can provide that the directors' liability for the company be unlimited. Every company must have a secretary which can be an individual or a corporate body, but must be resident in Hong Kong. Meetings can be held anywhere in the world. Accounts must be prepared, filed and audited. The migration and re-domiciliation of corporate entities to or from a foreign jurisdiction is not permitted. Annual returns must be filed. The Articles of Association of a private company must restrict the right to transfer shares, must limit the number of members to fifty (excluding employees), must prohibits any invitation to the public to subscribe for any shares or debentures of the company. Every Hong Kong company must register annually under the Business Registration Ordinance, the fee for which is about US$300.
Public Company Limited by Shares. A public company (plc) is any limited company which is not a private company.
Branch of Overseas Company. Overseas companies starting businesses in Hong Kong can form a private company limited by shares, as above, or can simply establish a branch. When a company incorporated outside Hong Kong establishes a place of business in Hong Kong, it must lodge the following documents with the Registrar of Companies: a Certified copy of its charter or memorandum and articles of association. Particulars of directors and the company secretary. Name and address of a resident of Hong Kong authorised to accept notices on behalf of the company. Power of attorney or other document appointing a Hong Kong representative. Address of principal place of business in Hong Kong and addresses of registered office and principal place of business in the company's country of incorporation; and a Certified copy of the certificate of incorporation.
The company is also required to file a copy of its financial statements once a year. However, an application may be made to the Registrar of Companies who may grant exemption from filing accounts based on certain criteria and the production of prescribed documents.
A branch office is relatively easy to set up but is open to greater potential liability than a limited company since it is not treated in Hong Kong law as a separate legal entity.
In some countries, branches have tax advantages as against limited companies, for a foreign parent, but not in Hong Kong: the territorial basis of taxation means that the branch will be taxed exactly as a limited company, on Hong Kong-source income.
Economy HK Limited Partnership Formation Package - £1,077 . Limited Partnership. The law is contained in the Limited Partnership Ordinance. Limited partnerships have the following characteristics: the maximum number of partners permitted by law is 20. Limited partnerships consist of general and limited partners; there must be at least one general partner whose liability for the firms debts is unlimited; the remaining partners are limited partners whose liability is limited to the amount of their unpaid share capital. A limited partner cannot reduce or take out his share capital whilst the partnership continues in existence and is not allowed to take an active part in the management of the partnership nor bind the same vis a vis third parties in default of which provision he assumes the liability of a general partner. Limited partnerships must be registered at the Companies Registry under the Limited Partnership Ordinance in default of which they are deemed to be general partnerships with unlimited liability for each and every partner. All partnerships are required to obtain a business license under the provisions of the Business Registration Ordinance which license annually costs US$300 per annum.
Trusts. Trust law in Hong Kong is virtually identical to English trust law and is contained in the provisions of the Trustee Ordinance (an Ordinance which is modeled on the English Trustee Act 1925). Both fixed and discretionary trusts may be settled in Hong Kong. Documents do not have to be registered and there are no statutory requirements in Hong Kong for a trust to make annual returns, submit audited financial statements, etc., unless it is carrying on business in Hong Kong.
Unlike most offshore jurisdictions Hong Kong has not tampered with trust laws in order to make the jurisdiction a more attractive jurisdiction in which to create a settlement. Hong Kong will therefore not normally be a suitable location for an asset protection trust.
- Why Incorporate in Hong Kong?
Hong Kong is a low tax jurisdiction with companies paying tax at the rate of 17.5% on local profits. The Hong Kong Government is keen to promote Hong Kong as a regional centre for Asia and offers an exemption to tax for companies registered in Hong Kong but transacting its business outside of Hong Kong. The effect of the exemption is that qualifying companies can operate tax-free. Please note we are experienced in obtaining this exemption should your business model qualify. In summary Hong Kong is an established and highly regarded jurisdiction, has not been blacklisted by any regulatory authority, benefits from low taxes and has developed into an efficient base for doing business in China and throughout Asia. Most importantly businesses can operate in Hong Kong and enjoy the tax benefits associated with most tax havens without creating the negative image commonly associated with being based in a tax haven.
Corporate and trust laws are virtually identical to the corporate and trust laws of the United Kingdom and most business activities are carried out behind the vehicles of limited companies, limited partnerships and sole proprietorships. Being a common law jurisdiction trusts are also widely used and understood. The chief factors driving Hong Kong's economic success are a combination of its non-discriminatory low tax regime under which only income derived from or arising in the jurisdiction is taxable and its geographical proximity and historical entrepot role for western trade with and investment into China.
While Hong Kong has a large and vibrant local business community, with over 470,000 locally registered companies, it is also home to the largest community of multinational firms in Asia. This is in part due to the territory's colonial roots, which have for the past 150 years made it the natural hub in Asia for British companies, and, in part, to its consistent and longstanding reputation for openness, simplicity of operation and institutional familiarity. As a result, more than 2,000 multinational companies maintain regional offices or headquarters in the territory. Hong Kong is one of the world's leading centres for overseas firms. Over 200 of the Fortune 500 companies have a presence in the territory. The American Chamber of Commerce in Hong Kong, with more than 1,100 corporate members, is the largest American Chamber outside of North America. The Japanese Chamber in Hong Kong reports that more than 2,000 Japanese companies operate from the territory.
Hong Kong is a major transhipment and re-export centre, activities which in turn fuel strong demand for trade support services such as banking and financing. In the wake of the Asian financial crisis new laws have been passed which encourage financial transparency such as the Organized and Serious Crimes (Amendment) Ordinance, which came into operation in June 2000. The law requires money changers and remittance agents to follow anti-money laundering measures such as customer identification and keeping transaction records for transactions over HK$20,000.
It has helped to prevent criminals from using non-bank financial businesses as conduits for money laundering. Hong Kong is the regional headquarters of over 714 multinational companies attracted by a combination of the territory's English common law legal system, its low tax regime and its historical trading links and unique access to the People Republic of China, the world fastest growing economy and biggest potential market. In 2001 alone Hong Kong trade with the mainland totalled US$167 billion.
Hong Kong have no IBC, but only limited companies: private and public limited companies. Public limited companies are mainly used for listing purpose, but can be changed from a private limited company by amending its memorandum and articles of association subsequently. Hong Kong assess taxes only on those profits arrive in or derived from Hong Kong, but not on a Hong Kong company's worldwide income, and Hong Kong have only one kind of tax for a corporation, i.e. Profits Tax which is currently at 17.5% on its assessable profits, not based on its income.
Our clientele include many foreign investors from a wide range of industries. Many of these foreign-owned Hong Kong companies do not have operations in HK and use our office as their registered office address. If a HK company has no operations in HK (e.g. it has no real office in Hong Kong and only uses our office as a registered office, it has a permanent overseas office, it has no staff in HK, its staff and directors rarely come to Hong Kong), then its profits will not be subject to HK taxes subject to the approval of the Hong Kong Inland Revenue Department. A lot of our clients have successfully claimed for taxes not subject to HK taxes in such cases. Unlike most offshore companies, the details of the shareholders and directors of a Hong Kong company are open to public inspection. However the owners of a Hong Kong company can still be anonymous by using our nominee directors and shareholders service.
- Hong Kong Taxation
Hong Kong adopts a territorial source principle of taxation. Only profits, which have a source in Hong Kong, are taxable here. Profits sourced elsewhere are not subject to Hong Kong Profits Tax. The principle itself is very clear but its application in particular cases can be, at times, contentious. To clarify the operation of the principle, we have prepared this simple guide on the territorial source principle of taxation. It gives a brief explanation of how the principle operates and provides simple examples for illustrative purposes of the tests applied to different types of businesses. Hong Kong's basis of taxation on profits from businesses. Hong Kong adopts a territorial basis for taxing profits derived from a trade, profession, or business carried on in Hong Kong. Profits Tax is only charged on profits, which arise in or are derived from Hong Kong. In simple terms this means that a person who carries on a business in Hong Kong but derives profits from another place is not required to pay tax in Hong Kong on those profits. Many places levy tax on a different basis. Unlike Hong Kong, they tax the worldwide profits of a business, including profits derived from an offshore source.
Pre-conditions for liability to Profits Tax. Under the Inland Revenue Ordinance, a person is chargeable to Profits Tax under the following conditions: he carries on a trade, profession or business in Hong Kong. The trade, profession or business derives profits; and the profits arise in or are derived from Hong Kong. The first two conditions are straightforward. Some elaboration is necessary for the third. Let us have a brief look at the basic principles for determining the source of profits. Basic principles for determining the source of profits. The Courts have over the years considered the subject of the source of profits. The following principles have emerged from authoritative court decisions:
Matter of fact. The question of locality of profits is a hard, practical matter of fact. No universal rule can apply to every scenario. Whether profits arise in or are derived from Hong Kong depends on the nature of the profits and of the transactions, which give rise to such profits.
The operations test. The broad guiding principle is that one looks to see what the taxpayer has done to earn the profits in question and where he has done it. In other words, the proper approach is to identify the operations, which produced the relevant profits and ascertain where those operations took place.
Gross profits from transactions. The distinction between Hong Kong profits and offshore profits is made by reference to the gross profits arising from individual transactions. Only those business activities, which directly produce the gross profits, are taken into consideration in determining the source of profits. Activities such as general administration are normally not relevant.
Place where decision is made. The place where the day-to-day investment/business decisions take place is only one factor, which has to be taken into account in determining the source of profits. It is not usually the deciding factor.
Business presence overseas. A business may maintain a presence overseas, which earns profits outside Hong Kong, but the absence of a business presence overseas does not, of itself, mean that all the profits of a Hong Kong business invariably arise in or are derived from Hong Kong. However, in the vast majority of cases where the principal place of business is located in Hong Kong and there is no business presence overseas, profits earned by that business are likely to be chargeable to Profits Tax in Hong Kong.
Profits of trading firms. Contracts for purchase and sale. The factor that determines the locality of profits from trading in goods and commodities is generally the place where the contracts for purchase and sale are effected. "Effected" does not only mean that the contracts are legally executed. It also covers the negotiation, conclusion and execution of the terms of the contracts.
Totality of facts. Following the recent Court of Appeal judgement (Magna Industrial Co. Ltd v CIR) it is now clear that a wider approach is necessary. The proper way is to look at the totality of facts. In other words, all relevant facts have to be considered, not simply the purchase and sale of the goods.
In Magna Industrial Co. Ltd. v CIR, the Court of Appeal noted that: "Obviously the question where the goods were purchased and sold is important. But there are other questions: For example: How were the goods procured and stored? How were the sales solicited? How were the orders processed? How were the goods shipped? How was the financing arranged? How was payment effected?" How relevant facts are considered. In considering the relevant facts the nature and quality of the activities matter more than their quantity. It is the cause and effect of such activities on the profits that is the deciding factor.
Irrelevant facts. Facts not directly related to the trading activities are considered irrelevant in determining the locality of profits. For example, renting office premises, recruiting general staff, setting up office, etc.
General practice. Where the contracts of purchase and sale are effected in Hong Kong, the profits are taxable here. Where the contracts of purchase and sale are effected outside Hong Kong, the profits are not taxable here. Where either the contract of purchase or the contract of sale is effected in Hong Kong, the initial presumption is that the profits are taxable here. However, the totality of facts will have to be examined to determine the source of profits. Where the sale is made to a Hong Kong customer, the sale contract will usually be taken as having been effected in Hong Kong. Where the effecting of the purchase and sale contracts does not require travelling outside Hong Kong but is carried out in Hong Kong by use of telephone, or other electronic means including the Internet, the contracts will be considered as having been effected in Hong Kong. Trading profits are regarded as being either wholly taxable or wholly non-taxable here. Apportionment is not appropriate.
Sale or purchase commissions. The place where service is performed. When a business earns commission by securing buyers for products or by securing suppliers of products required by customers, the activity which gives rise to the commission income is the arrangement of the business to be transacted between the principals. The source of the income is the place where the activities of the commission agent are performed. If such activities are performed in Hong Kong, the income has a source in Hong Kong.
Factors such as the place where the principals are located, how they are identified by the commission agent, and the place where incidental activities are performed prior or subsequent to the earning of the commission are not generally relevant in determining the source of the commission income. In the event that the commission income is earned by a person carrying on a business in Hong Kong but the activities which give rise to the commission are performed entirely outside Hong Kong, the commission is not taxable in Hong Kong.
Advance rulings. It is apparent from the foregoing that it may not always be easy to determine with certainty the source of the profits of a business. To provide certainty in the operation of the territorial source principle, the Inland Revenue Department will, commencing in April 1998, provide advance rulings on the source of profits of a business for Profits Tax purposes. The service is subject to the payment of a fee. Full particulars will need to be provided before an advance ruling can be given. Please write to the Assistant Commissioner, Unit One, Inland Revenue Department, 14/F, Revenue Tower, 5 Gloucester Road, Hong Kong for further details of the procedures for seeking advance rulings on source matters.
One of the major advantages of utilising a Hong Kong company is that there is no immediate suggestion that the company is a tax avoidance vehicle as Hong Kong is major trading entity in its own right and the vast majority of the 50,000 Hong Kong companies incorporated annually are local trading companies doing real business in the region.
- Hong Kong Profit Tax
With effect from April 1, 2003, the rate of taxation for company profits is presently 17.5%. Companies are liable to Profit Tax based on the profit derived from a source in Hong Kong during the actual year of assessment ending March 31 or on the results of the accounting year ending in that year of assessment. A branch of a foreign corporation is liable to Profits Tax in the same way and at the same rate as a Hong Kong Company. If a company engaged in re-invoicing negotiate and concludes contracts outside Hong Kong but does not accept orders there, any profits which arise have an off-shore source and are not normally subject to Profits Tax. Letters of Credit will be received to the Hong Kong Company from buyers in another country and the L/C will then be transferred or back-to-back to suppliers in Hong Kong or South East Asia. The Hong Kong Company will earn a price differential.
- Hong Kong Company Formations From - £660.00
Coddan is your one stop solution for incorporating and managing businesses in Hong Kong, China and throughout Asia. In over of eleven years experience providing advice to international clients we are well positioned to incorporate and manage your business efficiently and cost effectively. Our services can be tailored as required and confidentiality is assured.
We provide everything you need to easily and affordably incorporate your business in Hong Kong. Coddan provides complete and confidential corporate management services. Included are wide range of financial and administrative services to individuals and corporate entities, as a base for their international and local business activities in Hong Kong and China. Our mission is to provide high quality services to our clients over the long-term at competitive fees. You will find that we are able to render certain additional services exceedingly valuable when the time factor is of special importance.
We offer a choice of Hong Kong (HK) company formation packages to suit your practice requirements. We do not cut costs on expertise and quality but still maintain a cost effective pricing structure. We process all Hong Kong companies formation orders within 24 hours from the time we receive payment (please allow for extra time on weekends). We offer a choice of Hong Kong company formation packages to suit your practice requirements. In Hong Kong, company can be divided into "company limited by shares", "company limited by guarantee", and "unlimited company". Each of them has its own advantages and disadvantage. Our professional and experienced staffs can help you to set-up your business in Hong Kong.
Our services include: formation of Hong Kong limited companies. Formation of unlimited companies. Acts as Hong Kong Company Nominee Secretary. Provide Accounting Services. Provide Taxation Services. Provide Auditing Services. Acts as Business Consultant. Deregistration. Formal liquidation. Our professional and experienced staffs can provide company secretary services to your company. It includes: acting as company nominee secretary of your company. Assisting and advising on establishment of new companies in H.K / Overseas. Organizing and witnessing required meeting of directors and shareholders alongside preparation of minutes. Preparing and filing annual returns. Alternation of director or secretary. Transfer of share. Changing company name. Changing of company Hong Kong registered address. Share allotment. Applying for Deregistration of Limited Company.
Hong Kong is not an offshore center in the traditional sense of the word but rather a territory which offers a non-discriminatory low tax regime governed by the "territorial principle" under which only income arising in or derived from Hong Kong is taxable in the jurisdiction. As such its attraction lies not in the tight secrecy and minimal corporate disclosure and administrative requirements which characterize a number of offshore common-law island jurisdictions but rather in low tax rates, generous tax deductible allowances, a policy of only taxing income sourced from within the jurisdiction and the complete absence of capital gains taxes, withholding taxes, interest taxes, sales tax & VAT.
Hong Kong company formation procedures. A client shall fill in and submit to us the Formation Form for providing the details of proposed company name, shareholders, directors, secretary and registered office. Then we shall check and confirm if it is registrable within two to three working days. We shall prepare all the documents for incorporating a company, including Memorandum and Articles of Association, appointment of first directors and secretary, notice of registered office and application for business registration certificate. The client will sign all the documents (but not dating any) and return the same back to us. We shall arrange the filing of the documents to the Companies Registry and apply for business registration certificate. After obtaining the business registration certificate from the Inland Revenue Department, the documents (including chops and certified true copies) will be sent to the client, and then the company can be used. The procedures are usually completed within two weeks (excluding transit time of documents).
We promise to deliver fast and professional Hong Kong formation services at a low cost. All services are guaranteed to be legal and filed with proper governmental agencies. We pride ourselves that our activity on behalf of our clients has earned their confidence and respect worldwide. Together with our partners (including legal firms, banks and accountancy practices), we can offer a formidable team to address our client's needs. Companies incorporated or registered in Hong Kong are governed by the Companies Ordinance (Chapter 32 of the Laws of Hong Kong).
On 2 July 2003, the Legislative Council of the Hong Kong Special Administrative Region of the People's Republic of China ("Hong Kong") passed the Companies (Amendment) Ordinance 2003 ("Amendment Ordinance"), which is an ordinance to amend the Companies Ordinance of Hong Kong2. The Amendment Ordinance came into effect on 13 February 2004. The amendments include, among other matters, enhanced shareholders' rights, changes in requirements regarding directors and shareholders, and procedural improvements. The purpose of this article is to outline briefly several of the most important elements of the Amendment Ordinance, discuss the impact of the Amendment Ordinance particularly in relation to the Closer Economic Partnership Arrangement between Hong Kong and the Peoples Republic of China ("CEPA") and consider several outstanding issues not addressed in the Amendment Ordinance.
The Amendment Ordinance represents approximately three years of somewhat tedious and often contentious work by the Standing Committee on Company Law Reform ("SCCLR"). It seeks in its 153 pages to improve the Companies Ordinance, which governs matters related to Hong Kong companies.
Directors: The Amendment Ordinance permits a private company to have only one director5. Where a private company has only one director, that director cannot also be the secretary of the company. It also provides a statutory definition of "Shadow Director".
Members (shareholders): The Amendment Ordinance permits a private company to have only one member.
Insurance for officers and auditors: The Amendment Ordinance permits a company to purchase and maintain insurance for any officer or auditor of the company against any liability to the company in respect of any negligence, default, breach of duty or breach of trust (except for fraud) or incurred in defending proceedings, whether criminal or civil, in respect of negligence, default, breach of duty or trust (including fraud) of which such officer may be guilty in relation to the company or related company.
Shareholders' rights: The Amendment Ordinance grants every member of a company a personal right to sue to enforce the terms of the memorandum and articles of association"'. A director may be removed by an ordinary resolution of members (which may be passed by a simple majority vote) instead of a special resolution (which requires a three-fourth majority vote). The threshold for a members proposal is reduced from "holders of not less than 5% of the voting rights or not less than 100 shareholders" to "2.5% of the voting rights or not less than 50 members".
Statutory declarations or affidavits: The Amendment Ordinance replaces the filing requirements of statutory declarations or affidavits in respect of certain matters with simple written statements 13.
The Amendment Ordinance, to a large extent, reflected the SCCLR's desire to relax certain corporate formalities for private companies". However, equal importance was given to ensuring that companies would continue to conduct their business in accordance with international standards of corporate governance and that Hong Kong would continue to be perceived as a credible jurisdiction by practitioners and the international business community. For many reasons, including an international quality financial infrastructure, free economy and relatively low and simple system of corporate taxation, Hong Kong has been positioned in the offshore world as a credible jurisdiction in which to form a company. However, prior to the implementation of the Amendment Ordinance, several requirements imposed upon Hong Kong companies have deterred some offshore practitioners from actively using the jurisdiction for clients' international activities. The decision to allow Hong Kong companies to be formed with only one member and one director is a major step towards positioning Hong Kong in a more competitive posture vis-a-vis other jurisdictions, most notably those in the Caribbean.
The issue of bearer shares was also considered. Although relaxing the requirement of members to only one, the drafters of the Amendment Ordinance were wary of suggestions that Hong Kong companies should also be allowed to issue bearer shares and ultimately rejected such proposals'9. Given the attention afforded to the issuance of bearer shares by the Financial Action Task Force on Money Laundering, among others, this decision should prove beneficial to Hong Kong.
The one member/one director Hong Kong company that is prohibited from issuing bearer shares should prove more attractive to offshore practitioners registering a wide variety of vehicles for their clients, particularly international trading companies. In addition, the impact of the Amendment Ordinance in terms of offshore practitioners using Hong Kong companies more for their clients is further strengthened by CEPA. The objective of CEPA is to strengthen trade and investment cooperation between the People s Republic of China ("China") and Hong Kong.
The benefits of CEPA only apply to Hong Kong companies. The rapid economic growth of China has attracted the attention of the world and businesses engaged in international activities are keen to begin doing business in or with China. For international businesses willing to form a Hong Kong company, CEPA provides an opportunity to access the World Trade Creation ("WTO") trade liberalisation conditions to which China has agreed several years in advance of the implementation of those WTO rules.
As such, it is likely that the Amendment Ordinance's relaxation of requirements for members and directors, among other provisions, coupled with CEPA will result in offshore practitioners seeking to use Hong Kong companies to do business on a global scale as well as in or with China. Although the Amendment Ordinance is welcomed legislation, many practitioners believe several outstanding issues still need to be addressed. This includes the fact that Hong Kong companies must keep accounting records, and a profit and loss statement and balance sheet must be laid before the company in an annual general meeting together with the auditors report The audit requirement imposes a fairly significant annual cost on a Hong Kong company. Many practitioners have argued that private companies generating below a certain level of revenues or assets should be exempted from the audit requirement. This is common in many other jurisdictions. However, there are at least three reasons why this exemption was rejected.
Firstly, some practitioners, albeit probably a minority, believe that the audit requirement, as opposed to a voluntary system, lends additional credibility to Hong Kong as a jurisdiction in which to form a company. Although this argument has some merit for Hong Kong as a jurisdiction, it does little for the everyday business concerns related to the ongoing maintenance costs of private companies. <
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OFFSHORE SERVICES
HONG KONG LTD
+852 228.31.326
