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  • Form of entity

    Limited private companies

    Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the corporation. Directors are elected by the shareholders or the board of the corporation. Officer could be appointed by directors to run the day-to-day operations of the corporation.

    Note: Additional forms of entity structures also exist and could be useful in some instances but are not covered in this guide either because they are less commonly used types of entity structures or they are not as likely to be relevant to the reader.
  • Entity set up

    Limited private companies

    • Up to 50 shareholders
    • Right to transfer shares restricted
    • Invitation to public to subscribe for any shares or debentures prohibited
    • Generally no personal liability of the shareholders
    • Taxed on its profits at a corporate level. No tax on capital gains or dividends
    • Typical corporate documents include:
      • Articles of association
      • Certificate of incorporation
      • Business registration certificate
      • Board resolutions
      • Shareholders' resolutions
      • Share certificates
      • Common seal (optional) and
      • Registers.

    Board of directors has overall management responsibility.

    Annual return, notification of changes (such as share capital and directors) and creation of certain charges must be filed with the Companies Registry.

    Limited public companies

    No restrictions on number of shareholders, right to transfer and invitation to public to subscribe for shares or debentures.

    Interim and annual report also to be filed with Hong Kong Stock Exchange if the public company is listed in Hong Kong Stock Exchange.

    Companies limited by guarantee (without a share capital)

    Same as limited private companies, except liability of shareholders limited by the company's articles to the amount that the shareholders undertake to contribute to the assets of the company in the event of it being wound up.

  • Minimum capital requirement

    Limited private companies

    No minimum capital requirement.

  • Legal liability

    Limited private companies

    Shareholders of a corporation are generally not liable for the debts of a corporation aside from their financial contribution to the corporation.

  • Tax presence

    Limited private companies

    A limited private company is taxed on its business profits at a corporate level. There are no tax on capital gains or dividends.

  • Incorporation process

    Limited private companies

    File Incorporation Form, Notice to Business Registration Office and Articles of Association with the Companies Registry.

  • Business recognition

    Limited private companies

    Well regarded and widely used.

  • Shareholder meeting requirements

    Limited private companies

    Save for an annual general meeting, regular meetings are not mandatory.

  • Board of director meeting requirements

    Limited private companies

    Regular meetings are not mandatory unless required by a shareholders' agreement and/or articles of association. However, it is recommended to convene board meetings to approve corporate changes and significant transactions.

  • Annual company tax returns

    Limited private companies

    Must annually file tax returns with the Inland Revenue Department.

  • Business registration filing requirements

    Limited private companies

    Business registration with the Inland Revenue Department valid for 1 or 3 years is required.

  • Business expansion

    Limited private companies

    There is usually no need to change the articles of association as the business expands, unless the business scope is clearly stated in the articles. There may be a need to change the business scope in the business registration certificate.

  • Exit strategy

    Limited private companies

    Exit usually takes place by:

    • Voluntary winding up of the company
    • Sale of shares or
    • Sale of assets.
  • Annual corporate maintenance requirements

    Limited private companies

    • Annual general meeting: Generally required to hold an annual general meeting of shareholders 9 months after the end of its accounting reference period. Audited financial statements must be tabled at the annual general meeting. The annual general meeting can be replaced by written resolutions by all shareholders. This requirement may be waived for certain companies.

    • Annual Return: Generally required to be filed with the Companies Registry within 42 days after the date to which the return is made up to with updated company's information, including the shareholders' and the directors' information.

    • Audited financial statements: Required to be prepared up to the end of the financial year of the company in accordance with the Hong Kong GAAP.

    • Renewal of Business Registration Certificate
  • Director / officer requirements

    Limited private companies

    At least 1 director; at least 1 director must be a natural person.

    For more information on directors’ duties, see our Global Guide to Directors’ Duties.
  • Local corporate secretary requirement

    Limited private companies

    Company secretary must be either a Hong Kong corporate or an individual who is a Hong Kong resident.

  • Local legal or admin representative requirement

    Limited private companies

    None beyond the required natural director and company secretary.

  • Local office lease requirement

    Limited private companies

    None required.

  • Other physical presence requirements

    Limited private companies

    Each Hong Kong company must have a registered office in Hong Kong.

  • Sufficiency of virtual office

    Limited private companies

    Sufficient.

  • Provision of local registered address by law firm or third-party service provider

    Limited private companies

    Allowed.

  • Provision of local director or corporate secretary by law firm or third-party service provider

    Limited private companies

    Allowed. Starting from March 1, 2018, company service providers are required to apply for a Trust or Company Service Provider License from the Registrar of Companies.

  • Nationality or residency requirements for shareholders, directors and officers

    Limited private companies

    None, except for the company secretary (see Local corporate secretary requirement).

  • Restrictions regarding appointment of nominee shareholders or directors

    Limited private companies

    None, except 1 natural director is required.

  • Summary of director's, officer's and shareholder's authority and limitations thereof

    Limited private companies

    Directors are appointed by the shareholders or the board (if permitted by the articles of association), and the board of directors is the highest authority in the management of the corporation and governs the organization by establishing broad policies and objectives. In contrast, officers may be appointed by the directors to oversee day-to-day operations of the corporation.

  • Public disclosure of identity of directors, officers and shareholders

    Limited private companies

    Identity of directors and shareholders is publicly disclosed in filings with the Companies Registry.

    Starting from March 1, 2018, companies incorporated in Hong Kong (except for listed and exempted companies) are required to create and maintain a significant controllers register. The register will not be publicly available but should be open for inspection by law enforcement officers upon demand.

  • Minimum and maximum number of directors and shareholders

    Limited private companies

    A minimum of 1 shareholder and a maximum of 50 shareholders (otherwise the company will become a public company). A minimum of 1 natural director and no maximum number of directors.

  • Minimum number of shareholders required

    Limited private companies

    1 shareholder is sufficient.

  • Removal of directors or officers

    Limited private companies

    Removal of directors is generally allowed in general meeting (written resolution is not allowed) by an ordinary resolution of shareholders, but note special procedures apply (eg, the director must be given the right to be heard before a decision).

  • Required and optional officers

    Limited private companies

    None, except director and company secretary.

  • Board meeting requirements

    Limited private companies

    Notice to all directors, but directors can agree to short notice.

  • Quorum requirements for shareholder and board meetings

    Limited private companies

    If a company has only 1 member, that member present is a quorum of a general meeting of the company. Otherwise, 2 members is a quorum of a general meeting of the company subject to a higher threshold in the articles of association.

    Quorum of board meetings depends on the articles of association of the company.

  • Must a bank account be opened prior to incorporation, and must the bank account be local?

    Limited private companies

    Not necessary. A company can have a bank account anywhere.

  • Auditing of local financials. If so, must the auditor be located in local jurisdiction, and must the company's books be kept locally?

    Limited private companies

    Audit of financial statements by registered Hong Kong auditors is required, but such audited financial statements are not publicly available. A company’s accounting records must be kept at its registered office or any other place that the directors think fit. If a company’s accounting records are kept at a place outside Hong Kong, the accounts and returns with respect to the business dealt with in those records must be sent to, and kept at, a place in Hong Kong.

    Audited accounts must be approved by the board and tabled at annual general meeting.

  • Requirement regarding par value of stock

    Limited private companies

    No par value.

  • Increasing of capitalization if needed

    Limited private companies

    The company may:

    • Increase its share capital without allotting and issuing new shares, if the funds or other assets for the increase are provided by the members of the company
    • Capitalize its profits, with or without allotting and issuing new shares, and
    • Allot and issue bonus shares with or without increasing its share capital.
  • Summary of how funds can be repatriated from your jurisdiction (ie dividends or redemption)

    Limited private companies

    Funds can be repatriated abroad via dividends, redemption (if the relevant shares are issued as redeemable shares), or share buyback. Different rules and procedures apply in each case.

  • Restrictions on transferability of shares

    Limited private companies

    Shares can generally be transferred, but company may refuse to register the transfer. Note also that the transfer documents must be duly stamped or adjudicated before the transfer can be registered by the company.

  • Obtaining a name and naming requirements

    Limited private companies

    No name reservation system. Name must generally end with "Limited." There are specific words that relate to the government and certain industries, which are prohibited.

  • Summary of "know your client" requirements

    Limited private companies

    Professional service providers generally have their own KYC documents to be completed.

  • Approval requirements for amending charter document

    Limited private companies

    Generally the Articles of Association can be amended by special resolution of shareholders.

  • Licenses required to conduct business in jurisdiction

    Limited private companies

    Generally no license is required, except business registration with the IRD. Certain businesses require special licenses (eg, telecommunications).

  • Process of purchasing and utilizing a shelf company

    Limited private companies

    Shelf companies can be purchased from third-party service providers, but are less common nowadays.

  • Key contacts
    Anderson Lam
    Anderson Lam
    Partner DLA Piper Hong Kong [email protected] T +852 2103 0722 View bio

Sufficiency of virtual office

Hong Kong, SAR

Limited private companies

Sufficient.