Hong Kong

Located on the Southeast part of China. Is washed by the South China Sea from the west, south and east. During 150 years Hong Kong was a British colony, which granted autonomy to Hong Kong in 1997, it will be valid up to 2047. Hong Kong is now part of China.

Official language

English, Chinese

Currency

Hong Kong Dollar (HKD)

Legal system

Based on English common law

Political Structure

Special Administrative Region of the People's Republic of China. Defense and foreign policy area are operated by the Government of the PRC. Hong Kong retains control over the legislation, police force, monetary system, customs duties and immigration policy.

Economy

Hong Kong's economy is based on the free market, low taxation and non-interference of the government in the economy. In 2011 Hong Kong's economy was recognized as the freest economy in the world, the 17th year in a row (183 countries participated in the survey). This is one of the largest financial centers in the world. Most international banks (80 of the top 100) are located in Hong Kong. Hong Kong has become one of the favorite places for foreign investors.

Corporate law

  • Companies Ordinance 1984
  • Business Registration Ordinance
  • Limited Partnership Ordinance
  • Revenue (Abolition of Estate Duty) Ordinance 2005
  • Revenue (Profits Tax Exemption for Offshore Funds) Ordinance 2005
  • Trustee Ordinance

Types of companies

  • Private company limited by shares
  • Public company limited by shares
  • Branch of overseas company
  • Limited partnership
  • Trust

Private company limited by shares

  • There are no requirements regarding the minimum size of the authorized of share capital.
  • The minimum number of shareholders is two. If a company has one shareholder, he becomes personally liable for all debts of the company.
  • The minimum number of directors is one. Directors may be both physical and legal persons. They can be of any nationality and need not be residents of Hong Kong.
  • The company must appoint a secretary - a natural or legal person resident in Hong Kong.
  • Every company must annually register their renewal in the Business Registration Ordinance. If the application for renewal is filed within 42 days from the anniversary of the company, the renewal fee is HKD105 (as of 2012). If the application is filed later, the fee increases proportionally up to HKD 3,480 if the documents are filed 9 months after the due date.
  • Disclosure of beneficiaries to the government is not required.
  • Shares of no par value and bearer shares are not permitted.
  • The name that is identical to an existing one and the name that implies government patronage can not be used.
  • Migration of legal entities from foreign jurisdiction is not allowed.
  • Shareholders' meetings may be held anywhere in the world.
  • A Hong Kong company must keep accounting records. Each company must appoint an auditor who must be a member of the Hong Kong Society of Accountants, and must have permission to professional activities. It is not necessary to submit reports to the Registrar, they are submitted to tax authorities.

Taxation

Hong Kong is not an offshore jurisdiction, but it has a lower tax rate, which is levied only on income earned from the sources in Hong Kong. If a company does business in Hong Kong and profits from sources in another country, then the profits are not taxed in Hong Kong. In Hong Kong there are no taxes on capital gains, dividends and interest, VAT. Income tax is charged only on income derived from trading and business activities in Hong Kong at a rate of 16.5%.

Agreements on avoidance of double taxation

No agreements. Several agreements on information exchange are signed with such countries as Belgium, Thailand, Luxembourg, Austria, Czech Republic, France, Hungary, Indonesia, Ireland, Japan, Kuwait, Liechtenstein, Netherlands, New Zealand, Portugal, Spain and Switzerland.