Lexon Incorporations: Corporate, accounting, trust
Lexon Incorporations: Corporate, accounting, trust
Hong Kong: Limited Company

General information about the country

Hong Kong is located on the Kowloon peninsula surrounded by the South China Sea on three sides, as well as more than 260 islands. The main island is Hong Kong Island, where the financial centre and the supreme authorities of the jurisdiction are located.

The political status of Hong Kong has been that of a special administrative region within the Republic of China since 1997.

Prior to this, Hong Kong was a British protectorate for 100 years. The relevant agreement was entered into during the Second War of Peking in 1898, whereby the territory of Hong Kong was leased to Britain for 100 years.

Under British leadership, the use of English had become widespread in Hong Kong, and today it is the second official language of this jurisdiction.

Legislation

Whilst Hong Kong is an administrative district of the Republic of China, the principle of "one country, two systems" as declared by China is legitimate and valid. In accordance with the Sino-British Joint Declaration and the Constitution of Hong Kong, this territory has been granted broad autonomy until 2047 being for fifty years after the transfer of sovereignty. Within this framework, Hong Kong retains its own legislation, monetary system, immigration policy, and its own representation in international organizations. China provides defence and foreign policy of the area.

Thus, the Hong Kong legislation differs significantly from the legal system of mainland China, except for certain items such as the national emblem and symbols.

The legislative acts of Hong Kong are based on the common law inherited from the period of the British rule, and are currently supplemented by local regulations.

Corporate characteristics:

Main:
Company typePrivate Limited Company
Corporate legislationCompanies Ordinance 2012, Cap. 622
Language of company documentsChinese, English
Corporate endingLimited
Authorised capital:
Minimum amountNot regulated
Standard amount100 shares with no nominal value
Standard currencyNot regulated
Permitted currenciesNot regulated
To be paidIssued shares considered to be paid
Shareholders:
Minimum number1
Maximum numberNo restrictions
Publicly accessible recordsYes
Directors:
Minimum number1
Local directorNot required
StatusAt least 1 physical person
Publicly accessible recordsYes
Secretary:
Minimum number1
Local secretaryMandatory
Publicly accessible recordsYes
Reports:
Filing an Annual ReturnYes
Fiscal yearUsually April 01 – March 31
Financial StatementsYes
Publicly accessible Financial StatementsNo
AuditorMandatory
Filing a Tax ReturnYes
Corporate taxation:
On trading incomeTerritorial principle of taxation
On passive incomeTerritorial principle of taxation
Double Tax Treaty network:Applicable only to resident companies

Additional information on taxation

Hong Kong adheres to the territorial principle of taxation of income. Accordingly, the tax at the rate of 16.5% is levied only on the profit of a company which operates in Hong Kong.

In determining whether a company operates in Hong Kong, a series of factors are taken into account which include the following:

  1. Place where the business contracts are entered into
  2. Location of the company’s management and controlling body
  3. Situation of the actual office of a company in Hong Kong
  4. Purchase or sale of goods that are physically located in Hong Kong
  5. Cooperation with suppliers or clients located in Hong Kong

Conclusions

Hong Kong companies are frequently used to purchase goods in the mainland China for further sale in other regions, but may also be used for international trade in a favourable tax regime.

The public policy of Hong Kong is characterized by a low level of intervention in private business. The leading rating agencies evaluate Hong Kong as one of the most business-friendly jurisdictions in the world on a regular basis.

http://lexcorp.com/en/jurisdictions/hong_kong/ - Hong Kong: Limited Company

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