the fastest-growing economic cities globally, Hong Kong has become a popular destination for foreign investors. Companies from all over the world set up their businesses in this Asian financial hub for various reasons. However, there are some expected benefits of company formation in Hong Kong that make it very attractive for both established companies and new startups. The article will discuss some of the company formation services in Hong Kong that both local and international companies can use. The benefits are illustrated below:
Accessible statutory authorities: Start up company Hong Kong served by several statutory authorities, including the Companies Act, the Employment and Industrial Relations Act, the Banking Code, and the Insurance rules and regulations. These laws and statutes make it much simpler for the government to administer the activities of public companies and make rules that are relevant to ensuring compliance with their obligations. Furthermore, these statutory authorities provide that no annual financial statements are incomplete. For instance, a company cannot be notified if it is about to file a winding-up petition unless it has filed the petition within the prescribed period. Hence, it is easy to administer the company and avoid the risk of missing some critical transactions and deadlines.
Easy paperwork: There are no complex procedures or cumbersome forms to file when you decide to establish a company in Hong Kong. As a result, there is no need to send the necessary documentation to the jurisdiction where the company intends to do business. Most importantly, all documentation and registration fees required by the jurisdiction will be paid by the company directly. Thus, easy documentation and registration fee costs are another advantage of establishing a private company in Hong Kong. It is also one reason why many private companies choose to develop in Hong Kong rather than comply with the bureaucracy of complying with local regulations.
No taxation: Most countries require company owners to pay a corporate income tax to the government on their gross revenues. However, Hong Kong provides a simplified reporting method that makes it easier for private companies to comply with this obligation. Most jurisdictions require company owners to pay income tax on salaries and benefits, corporate shares or property, and profits and only pay the corporate income tax when they report their earnings. As a result, most private companies prefer to establish in Hong Kong rather than comply with the cumbersome requirement of collecting income taxes from their employees and shareholders.
No reporting exemption: Companies are not required to report their annual financial statements to the government under the Companies Registration Scheme (DRSS) or the Employers’ Liability Assessment Scheme (ELAS). Moreover, companies are not obliged to give accurate and complete information to their auditors. The advantage of this policy is that it ensures that the company has maintained proper accounts and records of its activities.
Limited liability: Companies can enjoy more benefits if they incorporate Hong Kong rather than any other location. This policy enables private companies limited by guarantee, partnership, or corporation to limit their liability to their creditors. It also provides them with the benefit of unlimited liability protection, provided they comply with the terms of the agreement entered into between them and the lender. The benefits of this simplified reporting system are also related to the lack of requirements associated with tax reporting.
Limited liability: The Hong Kong Company Registration System provides a simplified report of the company’s capital. The system uses two types of registration: the “areas” and the “non-areas”. The “areas” kind of company structure allows the public money invested by the company to be recovered through future capital distributions. In the non-areas type of company structure, the company itself does not benefit from the proceeds from the dividends.