Hong Kong Corporate Formation is now one of the most popular business services offered to investors abroad and home. There are many advantages once setting up an entire business in Hong Kong. The high standard of living makes it a hub for international business people and expatriates looking to establish a profitable home business. As two-thirds of the total global middle class is expected to be in Asia, more entrepreneurs from around the globe will be interested in this lucrative continent, and that’s why there is a steady growth of companies registering their businesses in Hong Kong
One of the benefits of doing business in Hong Kong is the low rate of taxes. It will be a significant advantage of Hong Kong corporate formation in that he or she does not have to pay income tax on the profit he or she makes in Hong Kong since the Hong Kong government is open to foreign investment. A business owner in Hong Kong may also freely transfer money to their mother country as they cannot obtain a visa. And last but not least, there are no capital gains tax charges as well. All these are why many people are attracted to do business in this part of the world.
There are also many choices available for a company when setting up an exclusive branch in Hong Kong. Many banks in Hong Kong offer good corporate formation packages in Hong Kong, which is why entrepreneurs can easily pick the package that best suits their needs. Corporate building in Hong Kong also has other benefits. Here, a company can enjoy tax benefits and enjoy low or no administrative fees.
When it comes to choosing a company for corporate formation in Hong Kong, entrepreneurs have two different types of options. They can either go for a” Sole Proprietorship” or a” Company Commercial Unit”. Both have distinct advantages and disadvantages. Let’s take a look at them now.
The “Sole Proprietorship” is a simple process that allows a company to own its building and manage its affairs. This process involves an application to the Companies Registry Bureau and the payment of an administration charge. This company registration can be followed up after two to three years. To receive this service’s benefits, the company must follow up periodically and submit annual reports to the Registry Bureau. However, to gain company status in Hong Kong, an “inerrant trust” is required, a much simpler procedure.
On the other hand, the “Corporation Commercial Unit” is an entirely different procedure from the sole proprietorship. This business structure’s advantage is that the business owner can choose any company directors and shareholders from among other companies. Company registration with the Companies Registry Bureau in Hong Kong is required before the operation of this system. Moreover, it will allow tax benefits for the company if it qualifies for a tax rebate under the Excise Tax Ordinance on business income. If the company qualifies, it will enjoy the tax benefits of up to 15% on the company’s taxable income.
Now let’s discuss the drawbacks of the company as mentioned above registration. The biggest one is that it needs to be operated continuously for two years to qualify for tax return benefits. Moreover, it needs to submit annual reports to the Registry Bureau and undergo auditing by the Business Supervision Department. Another drawback is the complexity and time required for company registration. Several entrepreneurs who follow-up the registration process found that it needs a lot of effort and time.
With Hong Kong corporate formation company secretary, there are some simple steps to register a new company. The most important thing to be done first is to ensure that the company secretary knows the registration. The next step is to fill up the Application form and submit it to the Registry. After successful submission, the company secretary will contact you by phone or email to provide the necessary information and set the next meeting date. Finally, you should confirm the company registration with the Companies Registry.