[ESTABLISHING A BUSINESS ENTITY IN HONG KONG]
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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 tax advantages in the place of incorporation of the non-Hong Kong company. may be
(e) there
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.
3.2.2 Representative Office
An office in Hong Kong set up by a non-Hong Kong company falling short of an establishment of a place of business in Hong Kong is loosely referred to as a “representative office” or “liaison office.” Such a representative office is not meant to transact any business or create any legal obligations, and its activities are normally restricted to the promotion or marketing of overseas businesses and liaison with potential local customers or overseas offices. It is usually set up by foreign enterprises to establish a physical presence in Hong Kong and familiarize itself with the local business environment as the first step of its entry into the Hong Kong market.
ILN Corporate Group – Establishing a Business Entity Series
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