[ESTABLISHING A BUSINESS ENTITY IN HONG KONG]
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with the prescribed fee to the Companies Registry: (a) Application for Registration as Registered Non-Hong Kong Company; (b) a certified copy of the instrument defining the company’s constitution (e.g. charter, statutes or memorandum and articles of association); (c) a certified copy of the company’s certificate of incorporation; (d) a certified copy of the company’s latest published accounts; and (e) a Notice to Business Registration Office. The One-stop Company and Business Registration Service is also applicable to the registration of a non-Hong Kong company under the Companies Ordinance. The Certificates of Registration of Non-Hong Kong Company and the Business Registration Certificates can normally be issued within 10 working days. Authorized Representative A registered non-Hong Kong company is required to appoint an authorized representative (which may be a natural person resident in Hong Kong, a solicitors’ firm, a CPA firm, etc.) to accept on the company’s behalf service of any process or notice required to be served on the company. Post-registration Compliance Requirements A registered non-Hong Kong company is subject to less extensive continuing obligations than a Hong Kong company. The basic compliance requirements also include, among other things, the filing of (i) an annual return for which an annual registration fee is payable every year; (ii) statutory returns upon changes in its particulars registered at the Companies Registry; and (iii) tax returns. However, a notable difference when compared with a private company limited
by shares is that a registered non-Hong Kong company is required to deliver a certified copy of its latest published accounts annually together with the annual return to the Companies Registry if such accounts are required by other laws such as the laws of its place of incorporation or the rules of any stock exchange. The accounts once filed will become public records. Branch or Subsidiary? The establishment of a branch of a non-Hong Kong company offers a few advantages over the incorporation of a Hong Kong company. For example: (a) Hong Kong stamp duty is generally not payable on a transfer of shares in a non- Hong Kong company which does not maintain a share register in Hong Kong whereas a transfer of shares in a Hong Kong company will attract stamp duty; (b) a registered non-Hong Kong company is subject to more limited compliance requirements under the Companies Ordinance; (c) separate audit of the branch is not required; (d) the time and costs for the winding up of a Hong Kong company upon cessation of the Hong Kong business can be saved; and (e) there may be tax advantages in the place of incorporation of the non-Hong Kong company. On the other hand, unlike a local subsidiary, a branch is not a separate legal entity and so the non-Hong Kong company will be fully liable for all the debts and obligations of its branch operations in Hong Kong. Also, its accounts will be publicly accessible as mentioned above.
ILN Corporate Group – Establishing a Business Entity Series
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