Are you looking for a low-tax system and an attractive business environment for your global operations? Despite the difficulty of starting a new business, finding the right location will provide you with the boost you need to succeed.
Hong Kong is rated as one of the top global cities for business establishments. The city offers an attractive business environment, a secure business environment, and low incorporation costs that support the development of businesses.
As a foreigner, Hong Kong is a great place to incorporate a new business and open a bank account if you want a strong and stable financial center in the world. The process of forming a Hong Kong company and opening a Hong Kong bank account will be clarified in this article.
Setting up a business and starting a new life in Hong Kong is a great idea. With a simple tax-regime system and free-market principles, the city offers low tax rates for residents. The country does not regulate inbound or outbound investments, nor does it restrict ownership based on nationality.
Business owners value Hong Kong's favorable location in the heart of Asia, ease of getting a business license, low taxes, and productive workforce, all of which contribute to the city's success. Its success. Investors and business owners from all over the world flock to this location because it is one of the best places for investments.
These are the major advantages of setting up a Hong Kong company that demonstrate why it remains an important and valuable jurisdiction for businesses:
As Hong Kong occupies a strategic location in the heart of Asia, businesses are able to take advantage of a wide variety of trading opportunities, particularly in China. Hong Kong has this advantage over other locations around the world, and is one of the main reasons why companies choose Hong Kong for their headquarters.
In Hong Kong, forming a company is easy, which makes it a great place to start a business. As Hong Kong's registration and incorporation processes are simple and straightforward, a company can be set up in 3 to 5 days.
Businesses are most concerned with policies that allow them to operate efficiently and with low taxes. Such policy features contribute to business success in a particular jurisdiction. In Hong Kong, business ventures can succeed due to a friendly tax regime and legal infrastructure.
Hong Kong has a territorial tax system under which companies only pay tax on profits generated within the territory (at 16.5%/8.25% corporation tax); no tax is collected on foreign income. Dividends or interest are not subject to withholding taxes, nor are sales taxes, capital gains taxes, or inheritance taxes. For this reason, Hong Kong is considered a low-tax jurisdiction.
A highly-skilled, well-educated, and highly-trained workforce with strong ethics makes Hong Kong a great place to work. In Hong Kong, most workers are professionals and entrepreneurs who have extensive experience and know-how of the growing business culture.
Millions of businesses in Hong Kong are attracted by the legal system and the business-friendly tax policy.
You need to decide what type of business entity you want to form before you can start your business in Hong Kong. You will need this information for tax matters and policy issues.
Structure and objectives of a company should be the same. Hence, companies should choose the right structure for their business ventures. Listed below are some examples of common Hong Kong business structures:
In addition to deciding what type of business structure you want to create in Hong Kong, you must also take into consideration the various aspects that will influence the company's success.
Although it is easier to establish a company in Hong Kong than in any other major city around the world, you still need to follow some steps. Are you interested in starting a business in Hong Kong? Check out these steps to build a business there.
Choosing a company name is the very first step. Chinese and English names can both be used. Name the company using a unique name that is not already being used by another entity. Whenever you have difficulties locating a unique company name for your Hong Kong company, you can contact with the online company register website to see whether it is available.
Your next step is to determine the type of business structure you will use once you have determined the name of your company. Taxation and business policies are all affected by the company's structure, as discussed above.
You must register your company with the government after you have chosen a name and structure for your company. Registering a company will provide many benefits, such as protecting it from risks and liabilities, as well as securing your rights.
A local Hong Kong address needs to be the registered address of your business in Hong Kong in order to be able to register a Hong Kong company. Note, however, that a PO box address cannot be used as your registered address in Hong Kong, which means you must have a physical address.
It is also important to open a business bank account in Hong Kong before forming a company. Your brand will be portrayed in a professional and reliable light, which will further foster a positive impression in your customers' minds. The company should open a corporate bank account as soon as it has been registered with the HK government.
This is a fairly straightforward process. All the necessary documents need to be collected in order to start the process. For opening a corporate bank account in Hong Kong, you will need to provide the following documents.
In order to conduct business in Hong Kong, it is necessary to open a corporate bank account. The brand becomes more credible and also becomes more popular among customers. You need all the required documents to open a bank account, but the process is fairly straightforward.
Hong Kong ranked 3rd in the Global Financial Center Index 2019 as one of the world's leading banking sectors. There are 71 international banks in the country, and a daily volume of foreign exchange of $274.6 billion. Hong Kong is a great place to start a business to have access to numerous international banks and to be located in the heart of a global financial hub.
However, you have to ensure that the process is followed correctly before you open a bank account. Selecting the bank that will best suit your business needs is essential if you want to ensure all your needs are met.
Many businesses have moved away from the traditional method of conducting business to online banking due to the internet and digitization. The demand for international bank accounts and virtual banking in Hong Kong has been growing as a result.
Hong Kong offers self-service banking through mobile applications and at-the-window service through virtual banking. Banking of this type allows customers to have direct communication with their banks through the use of video, audio, and chat channels.
Virtual banking in Hong Kong primarily serves to replace physical branches with various electronic channels.
For foreigners who cannot travel to Hong Kong, international bank accounts offer numerous advantages. Foreign or offshore accounts are those that are opened in a jurisdiction different from that of the company. International bank accounts or offshore bank accounts have become an excellent option for foreigners who wish to open a bank account in Hong Kong without physically being there since COVID-19 has restricted travel.
A business owner can operate in multiple currencies with an offshore bank account without having to pay high fees. Additionally, business owners can obtain credit and debit cards linked to different currencies, and take advantage of special investments and discounted international payments. Accessing your finances from anywhere in the world is easy with online banking.
The following requirements must be met in order to open an account with HSBC, ICBC, Bank of China, Citibank, or any other HK bank:
The bank account can still be opened if none of the criteria above apply to your business. In this case, you would need to provide a compelling argument. It is possible to schedule an appointment for you with Hong Kong banks such as Hang Seng, OCBC, Wing Heng, and Standard Chartered through the online company register team.
Because Hong Kong's banks have strict requirements, their due diligence processes can be a bit complicated. Online company register team can help you open a bank account in Hong Kong despite all the obstacles. Online company register team is neither responsible nor liable for a bank's decision to open an account for a specific company. (Banks have the right to decide whether to open an account for a particular company or not.)
Financing is the most important aspect of any corporate entity. Accounting and finance act as the back bone of the corporate structure without proper accounting structure and framework there is no corporate nor financial prospect of the company.
Realizing vitality of accounts, Cap. 622 has the provisions related to this matter. As per the general view of these provisions of Cap. 622; A corporate entity is required to keep and maintain financial records of the company and in addition to this a company is supposed to prepare annual audited financial statement of the company and meant to disclose it to shareholders of the company and if company is a public company then such disclosure shall be made to the general public.
These liabilities are to ensure that investors and creditors of the company should be kept informed about the financial performance and current financial position of the company.
Such types of statutory requirement regarding audited accounts statement are the result of public campaign which introduced the public revelation of the company’s accounts so that fraud on part of investors shall be avoided by the joint stock companies and that was the basic motivation which was concluded as the introduction of such provisions in 1st Companies Act of the England, back in 19th century.
This didn’t remain there, and such disclosure doctrine remains an integral part of modern company laws and serves as the beacon of light for matters related to corporate governance even in today’s world of modernization and versatility.
Cap. 622 does not completely change the script of provisions of predecessor companies ordinance, but it poses some modifications for the provisions related to accounts and auditors of the company. Some of main modification are as follows:
We shall discuss these modifications and other matters related to accounts of the company later on. Stay tuned with us and keep reading to enrich your minds with legality of company’s pre- register and post registration process. Now let’s move to the procedural obligations pertaining to operations and maintenance of company’s bank account.
Read here: How to set up a company in hong kong?
Dealing in cash is the very depreciated and unappreciable practice in corporate world thus to run the financial affairs of the company, a bank account is indeed in dire need. Now we shall discuss the matters related to the opening criteria and operating mechanism of corporate account in the bank because company’s bank account will be quite different from conventional bank accounts.
It is a well-known fact that pertaining to relevant circumstances company’s account would have to closed, if opened and may need to be re-opened or open a new one, there is one key point that must be remembered which says that any such closure or opening of bank account should occur with the consent of director(s) of the company.
Every task in corporate world is done by following a pre-defined procedure and contravention of prevailed procedure results in the penalty. So, for opening the bank account of the company, a resolution should be presented before the board and must be passed in order to open the account. Below is the sample resolution in this regard:
That a HK$ current account needs to be opened in the name of the company with the XYZ Bank in its Central Branch in Hong Kong. This account shall be operated by the [name of the director(s) or person(s)], singly or if jointly then [name of the person(s) or director(s)] should operate this company’s bank account.
When the resolution shall pass successfully, in accordance with company’s constitution then printed form of this passed resolution shall be the part of meeting’s minutes. Now let’s come to the documents which needs to be attached with the account request form to the bank so that bank can proceed with its legal and corporate obligations. Following documents should be attached with the bank’s account request form:
There are some notes for the sake of disclaimer and to let the reader of this article aware of do’s and don’ts while following this procedure. These disclaimer or cautionary notes are:
There is one security feature or provision which can further strengthens the security aspect of company’s bank account. Necessary security measures should be taken so as to ensure secure use of company’s accounts. It is advised that whenever the bank’s signatory operates the bank account of the company, on behalf of the company then company’s rubber chop should be stamped at the place where signatures are required. Where company’s rubber chop is not found then signatory shall personally be held liable for that transaction or any amount withdrawn on the cheque, signed by signatory.
Corporate world is full of abuses and probability thus exist each and every time that any person whether in executive or managerial position can indulge in fraudulent activities. Financial fraud leads all other types of fraud because the harm it can cause shall last longer than any other corporate fraud after create a company in Hong Kong. Now let’s get familiarized with the procedure through which signatory can be changed. Simply approval of company’s board is needed to change the signatory. Have a look on the sample resolution below:
It is submitted that method of operation of company’s HK$ current account no. XX-XXXXX-XXX opened in the Central Branch of XYZ Bank, Hong Kong, should be considered cancelled, revoked and that in future this account shall be operated by [name of the person(s) or director(s)], jointly.
Just as we need to submit certain documents while opening the bank account, certain documents shall need to be submitted while changing the signatory, these documents are:
There can be the situation where company needs to close its bank account after create a company in Hong Kong such as in the situation of winding up of company, consistent financial irregularities and many more. Because there is no word of absolute in the corporate world. Let’s summarize our discussion and now let’s come towards the procedural matters related to the closing of bank account of the company.
First of all, we need to present the resolution before the company’s board of director that in xyz situation it is quite obvious that company’s bank should temporarily or permanently be closed. Sample resolution is as follows:
It is submitted that company’s HK$ Current Account no. XX-XXXXXX-XXX, opened in the Central branch of XYZ Bank in Hong Kong. Now pertaining to [explain the reason, if applicable] company’s bank account should be closed and for the procedural formalities, bank should be notified accordingly.
It must be noted that, process for the closing of bank account shall only be processed if company’s board ratifies this proposed resolution. So, after obtaining board’s approval to commence the proceedings of closure of bank account on the part of bank, certain procedural obligations are needed to be followed. Following are some of the documents which needs to be submitted to complete these procedural obligations:
Do I need any documents to open a bank account for a Hong Kong company under KYC?
KYC personal certificates are required to open a bank account in Hong Kong. A certified passport copy is required for any shareholder with 10% or more shares in the company, for all directors, and for all beneficial owners. Director's bank references are also required.
For a Hong Kong company, how long does it take to open a bank account?
To open a bank account in Hong Kong, business owners as well as shareholders, directors, and beneficial owners must be physically present. To open a bank account in Hong Kong, the appointment must be confirmed with the banks within 7-20 working days. Some Hong Kong banks have moved their online application process to compensate for travel restrictions resulting from COVID-19.
For more information on how to open a bank account if you can't visit us in Hong Kong, please contact us at online company register.
What can Onlinecompanyregister.com do for you?
The purpose of this article is to describe the benefits of forming a Hong Kong company, different types of business structures available to owners, and the importance of opening a business bank account. From international business accounts, virtual banking services to traditional type businesses, there are many options available to open a bank account.
Online company register team can help you open a bank account or start a business in Hong Kong! With thousands of satisfied customers over the years, we have incorporated thousands of companies. Contact us for help with your banking needs.