{"id":5184,"date":"2017-10-09T11:36:55","date_gmt":"2017-10-09T03:36:55","guid":{"rendered":"https:\/\/www.tannerdewitt.com\/business-hong-kong\/"},"modified":"2018-11-29T15:03:06","modified_gmt":"2018-11-29T07:03:06","slug":"business-hong-kong","status":"publish","type":"post","link":"https:\/\/www.tannerdewitt.com\/zh-hans\/business-hong-kong\/","title":{"rendered":"Legal update: Doing business in Hong Kong"},"content":{"rendered":"<p style=\"text-align: justify;\"><em>This article was originally published in London Business Matters&#8217; <a href=\"http:\/\/www.londonbusinessmatters.co.uk\/archive\/2017-10\/mobile\/index.html#p=48\" target=\"_blank\" rel=\"noopener\">October 2017 issue<\/a>.<\/em><\/p>\n<p style=\"text-align: justify;\">The Hong Kong Government encourages free enterprise. The formalities and requirements for establishing a business are simple and straightforward. Generally there are no regulations concerning a company\u2019s minimum capital, the degree of local\/overseas participation in the ownership or capital structure, or the relative proportion of local to overseas staff.<\/p>\n<p style=\"text-align: justify;\">There are no exchange control or money market restrictions inhibiting the free flow of capital into or out of Hong Kong, dealings in foreign exchange may be freely carried out and capital can be held in any currency. Efficient local banks and branches of most multi-national banks provide highly competitive banking services. Every investor has a wide range of business vehicles\u00a0 to choose from when wishing to set up business in Hong Kong. All enterprises are subject to the same rules.<\/p>\n<p style=\"text-align: justify;\">The most common forms of business vehicles foreign investors choose are:<\/p>\n<ul style=\"text-align: justify;\">\n<li>Private limited companies<\/li>\n<li>Branch offices of overseas companies<\/li>\n<li>Representative offices<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><strong>Private Limited Company<\/strong><\/p>\n<p style=\"text-align: justify;\">Incorporating a new company is the most common and preferred method of establishing a business presence in Hong Kong.<\/p>\n<p style=\"text-align: justify;\">To establish a Hong Kong company, a minimum of one shareholder, one director and a secretary is all that is required. Neither the shareholder(s) nor the director(s) need to be resident in Hong Kong. Shareholders and directors can be either individuals or companies. However, at least one director must be a natural person. There is no prescribed minimum amount for share capital.<\/p>\n<p style=\"text-align: justify;\">A limited liability company in Hong Kong is not required to file its accounts with the Registrar of Companies in Hong Kong (although it must do so with the Inland Revenue Department for tax assessment purposes) and therefore such information remains confidential.<\/p>\n<p style=\"text-align: justify;\"><strong>Branch Office<\/strong><\/p>\n<p style=\"text-align: justify;\">Where a company incorporated outside Hong Kong establishes a place of business or branch office in Hong Kong as an extension of the investing company, it is referred to as a \u201cnon Hong Kong company\u201d.<\/p>\n<p style=\"text-align: justify;\">Such branch offices are generally subject to the same legal and tax consequences as limited liability companies incorporated in Hong Kong. Non-Hong Kong companies must register their branch with the Registrar of Companies within one month from commencement of business in Hong Kong. Branches are legally required to file returns and, if required in their home jurisdiction, audited accounts, on an ongoing basis.<\/p>\n<p style=\"text-align: justify;\">The non-Hong Kong company remains fully liable for all the obligations of the Hong Kong branch office.<\/p>\n<p style=\"text-align: justify;\"><strong>Representative Office<\/strong><\/p>\n<p style=\"text-align: justify;\">Like a branch, this is a means by which a company incorporated outside Hong Kong establishes a place of business in Hong Kong. A representative office however can only fulfil a limited range of functions. \u201cRepresentative offices\u201d are particularly useful for foreign companies that wish to analyse the Hong Kong market prior to committing itself to making a bigger investment in the city.<\/p>\n<p style=\"text-align: justify;\">Whereas a branch and Hong Kong company can conduct full operations, a representative office may only collect information or maintain contacts with customers, so-called promotional and liaison work. A representative office cannot enter into contracts, except for employing staff and contracts necessary for running the office (for instance renting office space and for utilities). Since a representative office cannot undertake business in Hong Kong, it should not generate any profits.<\/p>\n<p style=\"text-align: justify;\"><strong>Taxation<\/strong><\/p>\n<p style=\"text-align: justify;\">The Inland Revenue Department is responsible for tax matters in Hong Kong. Hong Kong has a different tax regime and is treated as completely separate to the People\u2019s Republic of China (PRC).<\/p>\n<p style=\"text-align: justify;\">Hong Kong operates a territorial basis of taxation under which taxes are only imposed on profits or income with a Hong Kong source. Foreign-sourced income generally is not taxable.<\/p>\n<p style=\"text-align: justify;\">Hong Kong has a simple, predictable and low tax system. The principal direct taxes are profits tax on business profits, salaries tax on salaries and property tax on income from property (apart from miscellaneous duties such as stamp duty).<\/p>\n<p style=\"text-align: justify;\"><strong>About Tanner De Witt<\/strong><\/p>\n<p style=\"text-align: justify;\">Tanner De Witt is an established and recommended independent law firm in Hong Kong. Our firm and lawyers, many of whom have international law firm backgrounds, receive top ratings from industry publications such as Chambers and Partners and Legal 500.<\/p>\n<p style=\"text-align: justify;\">Our primary focus is business law in Asia. We provide legal advice and representation in the following areas: Corporate and Commercial; Litigation and Dispute Resolution; Insolvency and Restructuring; Employment; Immigration; Family and Private Client; Intellectual Property, Financial Services and White Collar Crime.<\/p>\n<p style=\"text-align: justify;\">Our clients include public and private companies, multinationals, partnerships and individuals involved in a wide range of activities, both within Hong Kong and internationally. As an established Hong Kong law firm, we operate in many industry sectors. These vary from Hospitality to Aviation; from Banking and Insurance to Fashion; and Food and Beverage to Private Equity.<\/p>\n<p><em>For more information about business in Hong Kong, contact:<\/em><\/p>\n<p style=\"text-align: right;\"><a href=\"\/?p=362\">Eddie Look<\/a><br \/>\nPartner | <a href=\"mailto:eddielook@tannerdewitt.com\">Email<\/a><\/p>\n<p style=\"text-align: right;\"><a href=\"\/?p=365\">Tim Drew<\/a><br \/>\nPartner | <a href=\"mailto:timdrew@tannerdewitt.com\">Email<\/a><\/p>\n<p style=\"text-align: right;\"><a href=\"\/?p=366\">Edmond Leung<\/a><br \/>\nPartner | <a href=\"mailto:edmondleung@tannerdewitt.com\">Email<\/a><\/p>\n<p style=\"text-align: justify;\">Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This article was originally published in Lond&#8230;<a class=\"read-more\" href=\"https:\/\/www.tannerdewitt.com\/zh-hans\/business-hong-kong\/\">Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[205,206,234,241],"tags":[],"class_list":["post-5184","post","type-post","status-publish","format-standard","hentry","category-news-media-zh-hans","category-latest-news-zh-hans","category-legal-update-zh-hans","category-corporate-and-commercial-law-zh-hans"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Legal update: Doing business in Hong Kong - 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