Viewpoints

1. Introduction In accordance with the requirements of the Company Ordinance, every company registered in Hong Kong must have a street address as its registered office. 2. Requirements of the Registered Office By law, every company must have a registered office – it’s the company’s address for formal communications. The registered office must be a real address, but it doesn’t have to be the place where you do business. For example, some companies use their accountants for company secretarial services, and the accountant address as their registered office. PO Box numbers alone are not acceptable. In addition, the Company Ordinance does not specify the number of companies which can be registered at the same address. In other words, an address can be used as registered office by unlimited number of companies. 3. Purpose of Registered Office You must be able to deal promptly with any mail sent there. Companies Registry […]

Profits Tax There is only one kind of tax for a Hong Kong company i.e. Profits Tax (Corporate Income Tax) which is at 17.5% on its assessable profits. There is no Value Added Tax (VAT), and no tax on dividend or interest income in Hong Kong. Basically, a Hong Kong company is not subject to Hong Kong taxes if its operations are not carried out in Hong Kong. In determining whether a Hong Kong company’s operations are carried out in Hong Kong, all the company’s operations (starting from customers’ enquiries about product prices, place of orders from the customer, place of a purchase order to completion of sale and purchase) will be considered to find out which processes are carried out in and outside Hong Kong. The location of bank accounts is insignificant for this matter. For instance, a Hong Kong trading company with a bank account in Hong Kong […]

It is worth for you to consider forming a company in Hong Kong especially if you are engaged in trading business in Asia. The jurisdiction of Hong Kong has the following major benefits: Freest economy in the world, Legal system based on English Common Law, Excellent geographic location, being gateway to China, No foreign exchange control, Low taxes and simple taxation system, Free flow of information, World class infrastructure Small and medium-sized corporations and individuals can enjoy the privileges of large multi-national corporations by setting up their companies and bank accounts in Hong Kong and reducing their taxation expenses. After you set up your company in Hong Kong, it is not obligatory for you to stay physically in Hong Kong while you can have remote control over your Hong Kong company. You do not need to employ any staff or rent an office. Your operating costs are reduced substantially while […]

The New Ordinance was published in the Government Gazette in August 2012. It will become effective on 3 March 2014. From the Commencement Date, all the provisions in the Existing Ordinance will be repealed and replaced by provisions in the New Ordinance, except for the prospectus, and winding-up and insolvency provisions. These two areas will remain in the Existing Ordinance which will then be renamed the Companies (Winding Up and Miscellaneous Provisions) Ordinance. The Securities and Futures Commission has indicated that it will lead the review of the prospectus regime and plans to move the prospectus regime into the Securities and Futures Ordinance (Cap 571). Separately, the Hong Kong Government has said the winding-up and insolvency regime will undergo a separate law review exercise. The table below list all parts of the new Companies Ordinance and its Schedules. You need to use Adobe Acrobat Reader to view or download the […]

The Hong Kong Companies Ordinance (Chapter 622 of Hong Kong laws, hereafter the new CO is set to commence operation 3 March 2014. The new CO will replace the current Hong Kong Companies Ordinance (Cap. 32) (“Cap 32”) The new CO aims to enhance corporate governance, ensure better regulations, facilitate business and modernize the law. When the new CO comes into operation, Cap. 32 will be retitled Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) with core provisions affecting the operation of companies repealed except for those provisions relating to the winding up and insolvency of companies and company prospectuses. New Companies Ordinance Full Text Index Description PDF 1 Companies Ordinance Chinese Version Download 2 Companies Ordinance English Version Download 3 Schedules to the new Companies Ordinance Chinese Version Download 4 Schedules to the new Companies Ordinance English Version Download 5 Subsidiary Legislation Chinese Version Download 6 Subsidiary Legislation […]

1. An employer in Hong Kong is required to make arrangements for relevant employees aged between 18 and 65, who have been employed for 60 days or more, to join a registered MPF scheme. It can select one or more MPF schemes managed by the licensed trustees in the market (e.g. HSBC, Standard Chartered Bank and the licensed insurance companies) and then arrange the relevant employees to join the scheme. 2. Mandatory contributions are calculated on the basis of 10% of an employee’s relevant income. The employer and its employee each are required to pay 5% to the scheme. 3. Maximum and minimum income levels have been set for mandatory contribution purposes. If the employee’s income is less than HK$5,000 per month, he or she will be exempted from making mandatory contributions, but the employer is still required to contribute an amount equals to 5% of the employee’s income. 4. […]

Introduction There is no legal minimum wage in Hong Kong. Wages can be calculated by the hour, day or month, or by piece rate. The Employment Ordinance (Chapter 57 of the Laws of Hong Kong) sets the minimum entitlements for employees, such as statutory holidays, sick and maternity leave, severance and long-service payments. It is up to employers whether to provide additional benefits, such as a Lunar New Year bonus (normally equivalent to one month’s extra pay), medical allowances, subsidized meals, good-attendance bonus, paid holidays over and above statutory public holidays, subsidized transport to and from work, free or subsidized accommodation. Benefits  The Employment Ordinance requires employers to provide a set of basic entitlements. These include:  statutory holidays  sick leave  maternity leave  severance payments  long-service payments Fringe Benefits Some employers offer additional benefits. The most common are:  A lunar new year bonus, usually […]

Gift tax is levied at a progressive rate. Inter-vivos gifts which are not made for valuable consideration attract stamp duty of up to 2.75% where the gift has a value in excess of US$513,000 whereas no tax is payable if the gift is worth less than US$128,000 or where the recipient is a charitable organization.

Foreign Investment Incentives Hong Kong offers no special incentives to overseas investors or foreign-owned firms. Nevertheless, its free-port status, low tax rates, good infrastructure, relative freedom from government interference and substantial available capital make it attractive to potential investors and thus competitive with other countries in the region that do offer specific incentives. Restrictions on Foreign Investment The simplicity of procedures for investing, expanding and establishing a local company is a major attraction for foreign investment in Hong Kong. It is relatively easy to start a company: ready-made company, also known as shelf companies, are widely available and enable a businessperson to walk off a plane in the morning and start operating a firm in the afternoon. The government’s special industrial-land policy features somewhat more complex rules, but it is still less demanding than the policies of many other Asian investment centres. Controls on new investments are almost non-existent, and […]

The Revenue (Abolition of Estate Duty) Ordinance 2005 [“the Ordinance”] came into effect on 11 February 2006. No estate duty affidavits and accounts need to be filed and no estate duty clearance papers are needed for the application for a grant of representation in respect of deaths occurring on or after that date. The estate duty chargeable in respect of estates of persons dying on or after 15 July 2005 and before 11 February 2006 (“transitional estates”) with the principal value exceeding $7.5 million will be reduced to a nominal amount of $100. The old law is set out in the Estate Duty Ordinance. Estate duty had the following characteristics: It was based on the territorial principle and was thus only levied on property situate in Hong Kong. The deceased’s nationality, residence or domicile were completely irrelevant in determining whether an estate duty charge arose. The following examples show when […]