Company formation in Hong Kong can be extremely easy, particularly if you have the help of an experienced Company Formation Company. It can be difficult to handle certain issues and it is also essential that you use professionals who are willing to take care of all the legal work for you. However, it’s important that you do your own research before deciding on which company to use and make sure they have the experience and credentials to meet your needs. Here is what you should look for when deciding on your Company formation provider in Hong Kong:
Company formation in Hong Kong requires one of two company forms: Limited liability partnership (LLP) and Public limited company (PLC). In the Limited liability partnership there is only one director and shareholders with no rights of share ownership. The company secretary is the person in charge of day to day company operations. In the Public Limited company, there are two official bodies, one is the Hong Kong stock exchange and the other is the Hong Kong financial affairs authority. Both of these bodies will provide the necessary supervision. For instance, if the company wishes to issue shares on the stock market, they will have to comply with the rules and regulations of the Hong Kong stock exchange.
Company formation in Hong Kong also requires you to register a company name. You can choose from several different options including a Limited Liability partnership (LLP), Public limited company (PLC), Companies’ Registration, Business Number, and so forth. After choosing the company name and registering it with the Companies office, you will be able to make any business transactions and enjoy all the benefits of having a company. However, before making any business transaction, it is important that you understand how much your profits tax will be. You need to pay this first, before you can make any further business transactions with the clients of your company.
There are three basic tax schemes in Hong Kong, resident sales tax (either zero percent or 10 percent), corporate tax, and other taxes such as stamp duty and property tax. In order to ascertain the amount of tax you are liable to pay, you should contact your tax agent. He will be able to assist you fully in determining your tax regime. If you are a non-resident of Hong Kong, you will still have to pay tax on your taxable income, irrespective of whether you reside in Hong Kong or not.
The second taxation system in Hong Kong is the withholding tax system. This system is used to curb wastage of production by companies. It works by restricting the number of shares issued by companies to their employees. Shares can only be withheld if the employee has been paid his monthly salary for the specified number of work hours. This system of withholding tax is very effective in ensuring that companies do not run short of production.
The third taxation system in Hong Kong, which is utilized by most companies is the double-entry bookkeeping system. In this system, a company’s books are kept by an independent firm that is not related to any particular bank. This independent firm keeps the books of every company that is registered with it. In case of company formation in Hong Kong, the new company is subject to the double-entry bookkeeping system until it receives its certificate of registration from the bank. Once the company gets its certificate, it is then free to decide its own tax rate in Hong Kong.