One of the reasons people consider investing in Hong Kong is the benefits of incorporating a business into this Chinese city. Hong Kong is rated as one of the simplest places to perform business globally, with its legal system based on the “One country, two systems” principle. Setting up a successful Hong Kong business is relatively easy and straightforward, with very few unnecessary red-tapes or bureaucracy.
Moreover, Hong Kong also adopted a very favourable international ownership policy by entitling any company’s shares to be wholly owned by foreigners. As a result, there are not many impediments to setting up an offshore company in Hong Kong. Furthermore, Hong Kong is a beautiful place for doing business. Despite the recent economic slump, the economy is still increasing, giving room for businesses to grow. The central government has taken significant steps to liberalize the economy through Hong Kong incorporation, and this is seen in the formulation of several ordinances covering various business sectors. It was further strengthened by introducing the Consumer Protection Act in 2020, designed to protect small entrepreneurs’ interests.
The main benefits of incorporating a business in Hong Kong are remarkably high. It is primarily because of the low corporate tax rate in Hong Kong, which contrasts with 32 per cent in mainland China. Additionally, despite certain restrictions in the form of a property market and other conditions that apply to ownership of the real estate in China, Hong Kong houses cost less than they would in mainland China. It means that you can purchase your business premises in Hong Kong without incurring substantial capital gains.
Forming a company in Hong Kong also has other advantages. It is highly recommended that you should hire a formation consultant to help you in the process. There are several advantages to using a formation consultant. The first is to help you avoid problems that may arise during the company’s registration, assessment, and subsequent establishment.
The formation consultant will also help you in calculating the cost of incorporating. The most common fee that we paid for the Hong Kong Company was about $300. The second fee that we paid was about the same amount, as our company must have born for the accountant’s service, the letter of appointment, and the registration of its offices. The last fee that we paid was the registration of our company’s secretary.
The main difference between our Hong Kong incorporation and other countries’ companies is that we chose not to incorporate our business in Hong Kong. Instead, we included it under the rules of our standard law system in Singapore. We made this decision to avoid paying the registration fees required for our company in Hong Kong. The next step was to open an office in Singapore to carry on our trade without any hassle. After we received all the necessary documents for our company, we registered it with the Companies Registry.
After receiving the necessary approvals from the concerned departments in Hong Kong’s government, we opened our registered office at the Central Business District (CBD). We had a single board of directors that were our only shareholders. The next thing that we had to do was open a bank account at the Commercial Banking Corporation of Singapore (BCCS) so that our company could receive its banking operations. Our business registration certificate was necessary for the shareholders of our company. The third step involved in our Hong Kong incorporation procedure is to obtain our company’s business registration certificate.
After completing all these procedures, we should submit our business registration certificate to Hong Kong’s relevant departments’ government. These departments will issue the business registration certificate to our company after clearing all the procedures needed by the law. On receiving the certificate, the company’s shareholders must send us a copy of their letter of agreement and document the acceptance of receipt of their application by the inland revenue department.