AC Business Consulting (Shanghai) - Investment,Business Registration,Accounting,Sourcing,Procurement,Translation

Establish Hong Kong company

Advantages

Set-up requirements

Set-up procedure and time required

Annual maintenance fee

Our service

The comparison with BVI company

The comparison with unlimited company

1. Advantages

Generally, Hong Kong companies are being used because of following advantages:

	With British legal system as background which is well adopted, Hong Kong has very stable social and political environment. English and Chinese as bilingual legal language.
	Being international center of information exchange and transportation hub. Close to and with excellent relationship with Mainland China
	Wide freedom on choosing the company name
	No restriction on the business scope except special business which requires special certification
	With very low tax rate. Tax exempt for income not incurred in Hong Kong (offshore income) f) No restriction on the capital and do not need capital verification
	With very active and freedom in manpower, logistic, fund transferring and financial activities. No restriction in fund transfer to and from most part of the world. No custom duty on the import-export goods, etc.
	Easy to get the residence certification. The client can apply for the multi-entry into Hong Kong when your company pay tax

2. Set-up requirements

	Minimum 1 shareholder.
	Minimum 1director.
	Directors & shareholders can be same person. No nationality restriction for shareholders and directors.
	Corporate shareholder and director is allowed.
	Minimum subscribed share capital is HK$1.
	Registered address in Hong Kong.
	One Company Secretary and should either be Hong Kong resident or Hong Kong limited company.
	Company name should not be same as those already in company register and can be English only, Chinese only or English plus Chinese
	Company should have complete account book for the annual tax filing
	Company should do the annual return and business license renewal.

3. Set-up procedure and time required

	Tailor made company
	Ready made company

4. Annual maintenance fee

	Company secretary as request
	Company registered address as request
	Service fee for carrying out the duty of nominee directorship or shareholder
	Business Registration renewal
	Company registry annual filing
	Accounting & audit as request
	Tax filing

5. Our service

	Assisting client for set-up company and related issue
	Offering the registered address
	Assisting in opening company bank account
	Providing shareholder or director for the registration purpose
	Offering the company secretary, accounting and auditing service
	Providing advisory service on tax issue and other issue

6. The comparison with BVI company

Generally, Hong Kong Company is more suitable for doing business while BVI Company is more suitable for asset holding. However as situation of client varies case-by-case, professional advice should be sought before making decision. Below comparison is highlight of certain areas and help client to consider using which type of company.

Setup requirement

Purpose and Benefit

Cost in formation, maintenance and cancellation

1) Setup requirement

Recommendation: BVI company is more simple in setup requirement.
	Hong Kong Company	BVI Company
Minimum No. of shareholde	· 1	· 1
Minimum No. of director	· 1	· 1
Minimum issued share capital	· HK$1	· HK$1
Company Secretary	· 1 and should be Hong Kong resident	· Not required
Nationality and address of shareholder and director	· No restriction	· No restriction
Hong Kong registered address	· Required	· Not required . · Keeping of Hong Kong corresponding address is useful for corresponding with registration agent.
Time required to incorporate	· Ready-made: 1 day · Tailor-made: 7 working days	· Ready-made: 1 day · Tailor-made: 12 working days

2) Purpose and Benefit

Recommendation: BVI company is more simple in setup requirement.
	Hong Kong Company	BVI Company
Business image	· Better	· Less good
Resistance of customer and client	· Less resistance as registration is open for public search	· Higher resistance as registration is not open for public search
Risk reduction	· Same	· Same
Tax benefit	· Profits Tax rate 17.5% but exempt for profit not deriving from Hong Kong	· Profits Tax rate Zero but limited to profit not derived from BVI. · Company may still subject to tax of another country
Asset holding	· Asset transfer can be achieved by share transfer · Has to pay stamp duty for share transfer · Updated financial statement is required for share transfer.	· Asset transfer can be achieved by share transfer. · No stamp duty and no financial statement is required for share transfer.
Bank account opening	· Easier and less requirement even for non-Hong Kong resident	More requirement and always request for · Personal banker's reference letter of directors. · Disclosure of beneficiary owner.
		· Purpose of opening bank account.

3) Cost in formation, maintenance and cancellation

Recommendation: BVI company is more suitable for holding of asset. Hong Kong company is more suitable for doing business.
	Hong Kong Company	BVI Company
Cost of formation	· From HK$6,300	· From HK$7,800 (US$1,000)
Annual maintenance	· Business Registration HK$2,600 · Annual filing HK$105 · Accounting, tax filing and auditing required. Service fee starts from HK$4,000 per year · Total annual fee starts from around HK$7,000.	· License renewal US$700, or HK$5.500 · No accounting, tax filing and auditing required
Business cancellation	· No debt company can be de-registered at around HK$2,000 · Debt bearing company has to be winding up at around HK$20,000	· Just not to pay license renewal

7. The comparison with unlimited company

Advantage & use of unlimited company

Set-up requirement

Exemption from Business registration certification fee

1) Advantage & use of unlimited company

Unlimited company is very suitable for business start up because of

its simplicity in application;

its low maintenance cost; and

able to have bank account in company name.

All nationalities is eligible to open an unlimited company in Hong Kong. For business start up case, most unlimited company meets the requirement of business registration fee exemption. In this case, the possible cost of maintaining such an unlimited company can be very low:
Business registration - start up and annual renewal - HK$2,600 or zero (exempted).

Service fee for business registration:

BR application - HK$800 for HK resident, or HK$1,200 for non-HK resident

BR fee exemption - HK$1,000

Accounting & tax filing per year - maybe as low as HK$2,000 because no audit is required. The actual charge depends on income, volumn of transaction and business nature of the company.

For tax purpose, the loss can be carried forward to setoff future year's profit.

For business purpose, an unlimited company can carry out all business just same as a limited company.

2) Set-up requirement

For Hong Kong resident, require Hong Kong ID card photo copy of proprietor and all partners.
For non-Hong Kong resident, require: photocopy of proprietor or all partners' passport;

3) Exemption from Business registration certification fee

Unlimited company fulfilling criteria as below may exempt from payment of Business Registration fee:

Every person can claim one exemption only for each year.
If a person is owner of 2 unlimited companies, he cannot claim exemption for any one of them.
Only applicable to sole proprietor unlimited company.
Both Hong Kong resident and non-Hong Kong resident are eligible.
For service business - average monthly receipt is < HK$10,000
For other business - average monthly receipt is < HK$30,000

For new business registration, you have to pay for the registration fee and wait for refund. As it is a new business, applicant need to prove that the income of the new business will fulfill the income requirement.

For business registration renewal, you can exempt from payment if application is lodged properly. Last year Income record of the business is required to prove fulfillment of requirement.