Hong Kong

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C
D
- Delaware USA
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- Gibraltar
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- Hong Kong
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- Ireland
- Israel
- Italy
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- Marshall Islands
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- Nevis
- New Zealand
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- Panama
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- Seychelles
- Singapore
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- United Arab Emirates
- United Kingdom

Geography, Population, Languages

Hong Kong is located in the South China Sea, 160 km south-east of Guanzhou. Hong Kong consists of a large number of islands and a part of the mainland, with a total area of approximately 1,104 sq. km. The principal areas are Hong Kong Island, Kowloon and the New Territories. Separating Hong Kong Island and the Kowloon peninsular is Victoria Harbour, which is recognised internationally as one of the world's perfect natural harbours. It varies in width from two to ten kilometres. An additional 13,517 sq. km of land has been reclaimed in the New Territories to provide additional dockyards and warehousing facilities. It is estimated that 100,000 containers a month pass through the port.

The population of Hong Kong is currently 6.9 million, most of whom are Chinese. It is one of the most densely populated areas in the world.

The official languages are English and Chinese, with English being used in the commercial and political contexts and Cantonese Chinese used widely in industry and domestic trade.

History, Political Structure and Law

Hong Kong Island, Kowloon and the New Territories were ceded to Britain in perpetuity in 1842 under the treaty of Nanking, and in 1898, they were leased from China by Britain for a period of 99 years. Until 1 July 1997, Hong Kong was a British Crown Colony. A governor appointed by the Queen presided over the Hong Kong government, which consisted of the executive and legislative councils.

Under the Sino-British Agreement of December 1984, on 1 July 1997 all of Hong Kong reverted back to China and became a Special Administrative Region (HKSAR) within the People's Republic of China (PRC), with its independent legislative, executive and judicial system guaranteed not to change for 50 years. Under the present system of government Hong Kong is administered by a Governor appointed by the United Kingdom, but for all practical purposes government is by a locally elected executive and legislative council. The Chinese take-over of 1997 is expected to bring tremendous business opportunities, with Hong Kong playing an important part in the Chinese economic miracle.

Hong Kong Common Law is based on English Common Law with Ordinances being enacted locally.

Economy and Infrastructure

Hong Kong is the leading South East Asian centre for both finance and commerce and ranks as the world's third largest financial centre after New York and London. There are more than 160 licensed banks, with 85 foreign banks having representative offices in Hong Kong and a further 32 licensed deposit-taking Finance Companies, all of which play an active role in the financing of international trade and commerce. There is a wide range of professional services available.

With China pushing forward with the modernisation of its own economy, the PRC expects Hong Kong to assist in this endeavour. It is widely recognised that Hong Kong is and will continue to be a significant gateway to China. Under the "one country – two systems" philosophy, the HKSAR retains unchanged its capitalist system, legal structure and lifestyle. Hong Kong remains a free port with a free flow of capital and a freely convertible Hong Kong dollar which is officially pegged to the US Dollar. There is no exchange control.

Company Incorporation

The principal Corporate Legislation is the Companies Ordinance (Cap 32). The type of Company used for international trade and investment is the Private Company limited by Shares. A Hong Kong Company has all the powers of a natural person. Off-the-shelf Companies are available. The language of legislation and corporate documentation is English, but Chinese characters may be added if desired.

Trading and business activities are subject to the following requirements: a Company cannot undertake banking or insurance activities or solicit funds from or sell its shares to the Public.

It is possible to establish a Hong Kong registered corporate entity in two different ways:

By incorporating a new Hong Kong Company.
By registering an existing foreign company in Hong Kong under Part XI of the Hong Kong Companies Ordinance.

Incorporation procedure includes the submission of the Memorandum and Articles of Association and a Declaration of Compliance. A Notice of Situation of Registered Office must also be filed. This can either be done at the same time as the Memorandum and Articles of Association and Declaration of Compliance are filed, or within 14 days of the date of incorporation. As a matter of local company law, the company must maintain a registered office address within Hong Kong and appoint a local resident company secretary.

Company names are subject to the following restrictions:

It is not possible to reserve a name.
It is essential to check that there is no similar or identical name on the register, which would prevent the company being incorporated.
A name that implies criminal activity or is otherwise contrary to the public interest is prohibited.
A name that implies royal or government patronage is not acceptable.
Use of the following words in the name or their foreign language equivalents require consent or a licence: Building Society, Chamber of Commerce, Chartered, Co-operative, Imperial, Kaifong, Mass Transit, Municipal, Royal, Savings, Tourist Association, Trust, Trustee, Underground Railway, Bank, Insurance, Assurance, Reinsurance, Fund Management, Asset Management, Investment Fund.
The suffix "Limited" is required to denote limited liability.

The minimum number of directors is two. These may be natural persons or corporate bodies, of any nationality, and need not be resident in Hong Kong. Full details of the directors must be filed with the Public Registry. There is no requirement for board meetings to be held within Hong Kong and directors may be resident anywhere in the world.

A Hong Kong company must appoint a company secretary, who may be a natural person or a corporate body, but the company secretary must be resident in Hong Kong.

The minimum number of shareholders is two. Their details must be filed on the public register. Corporate shareholders are permitted and anonymity can be assured by the use of nominee shareholders.

The standard authorised share capital is HK$ 1,000. The minimum issued capital is two shares with par value. Classes of shares permitted are as follows: ordinary shares, preference shares, redeemable shares and shares with or without voting rights; deferred, founders' and management shares. Bearer shares are not permitted.

Annual Taxation and Fees

Taxation in Hong Kong has the following features:

Hong Kong does not impose tax on non-Hong Kong source income even when remitted to Hong Kong. Consequently if a Hong Kong company's trading or business activities are based outside Hong Kong, no tax is levied. Hong Kong companies with Hong Kong source income currently pay a rate of taxation on profits of 16%.

Hong Kong has no double tax agreement with any country, with the exception of a limited treaty with the USA relating to shipping matters only. Recently Hong Kong has entered into double taxation agreements, basically in relation to shipping and air activities with many countries worldwide.

The Business Registration Fee (BRF), currently HK$ 2,600, is due and payable within one month of the date of incorporation and then annually on the anniversary of the first payment.

Hong Kong companies are required to file audited accounts and must also prepare and file an annual return giving details of the current directors and of shareholders who have held shares in the company at any time during the year. A Hong Kong company's accounting records may be kept at the registered office address or elsewhere at the discretion of the directors. Every company must appoint an auditor who must be a member of the Hong Kong Society of Accountants and hold a practising certificate. There is a requirement to file accounts with the tax authorities but not with the Registrar.