Corporate Law at Hong Kong
Here’s a detailed overview of Corporate Law in Hong Kong, a major international financial center known for its business-friendly legal framework:
Corporate Law in Hong Kong
1. Legal Framework
Corporate law is primarily governed by the Companies Ordinance (Cap. 622), the principal statute regulating companies.
Hong Kong law is based on common law, influenced by English law.
The Companies Registry administers company registration and regulation.
2. Types of Companies
Private Limited Company
Most common business entity.
Limited liability to shareholders.
Restriction on maximum 50 shareholders.
Cannot offer shares to the public.
Public Limited Company
Can offer shares to the public and be listed on the stock exchange.
Subject to stricter regulatory requirements.
Sole Proprietorship and Partnerships
Unincorporated businesses.
Partners/shareholders have unlimited liability.
Company Limited by Guarantee
Commonly used for non-profits.
3. Company Incorporation
Minimum requirements:
At least one director (individual, can be foreign).
One shareholder (individual or corporate).
Company secretary (resident in Hong Kong).
Registered office address in Hong Kong.
No minimum capital requirement; typically HKD 1 is sufficient.
Incorporation is fast (usually within 1–2 business days).
4. Corporate Governance
Companies must hold an Annual General Meeting (AGM) unless waived.
Maintain statutory registers: members, directors, secretaries, charges.
Directors owe fiduciary duties and must act in good faith.
Filing of annual returns and financial statements with the Companies Registry.
Audited accounts required for most companies.
5. Taxation
Corporate tax (Profits Tax) rate is 16.5% on assessable profits.
Territorial tax system: only profits sourced in Hong Kong are taxable.
No VAT, no capital gains tax, no withholding tax on dividends.
Double Tax Treaties with multiple countries.
6. Foreign Investment
100% foreign ownership permitted.
No restrictions on repatriation of profits or capital.
No exchange controls.
7. Compliance Requirements
Annual filing of:
Annual return with the Companies Registry.
Profits tax return with the Inland Revenue Department.
Maintain proper accounting records.
Compliance with Anti-Money Laundering (AML) regulations.
8. Advantages of Incorporation in Hong Kong
Strategic location and gateway to China and Asia.
Robust legal system with strong protection for investors.
Simple, low-cost incorporation and maintenance.
Strong banking and financial infrastructure.
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