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Hong Kong laws (section 154, Hong Kong Companies Ordinance) require every company incorporated in Hong Kong to have a company secretary. The company secretary could either be an individual resident in Hong Kong or a corporate establishment based out of Hong Kong.
Why you need a Company Secretary?
The benefits of having a company secretary does not only extend to complying with the law. Company secretaries also have other essential responsibilities that extend to governance, administration and decision making in a company. Here are the essential reasons why you should have a company secretary on board your new company.
- It is required by law. The Hong Kong Companies Ordinance mandate every company incorporated in Hong Kong to retain the services of a Company Secretary or company secretarial service. It is impossible to have your company listed on the Hong Kong stock exchange without having a qualified Company Secretary.
- Regulations, policies and laws guiding business activities in Hong Kong are becoming more complex by the day. Having a competent company secretary on board your company or using the services of a reliable agency offering company secretarial services is essential to easily navigating the increasingly complex legal and regulatory business environment in Hong Kong and ensuring that your company always stays on the right side of the law.
Duties of a Company Secretary
If you operate an active company, your company secretary will be tasked with a lot of daily duties and responsibilities. These duties generally cover a wide range of administrative and management functions and may range from personnel management; organizing and maintaining the company’s corporate and statutory documents; helping the company comply with laws and government regulations; as well as positively interacting with directors and officers of the company and counseling them on the fundamentals of corporate governance.
The company secretary is certainly tasked with a lot of responsibilities. Some of them are outlined here.
- The company secretary is in charge of maintaining and updating the company’s statutory books, which include the registers of shareholders and directors. These books are kept in the custody of the company secretary and he/she is tasked with updating them when necessary. The company secretary is also responsible for overseeing the production and distribution of company accounts and reports to shareholders and members of the company.
- The company secretary is responsible for organizing and attending meetings of the board of directors/shareholders. In these meetings, the company secretary prepares the minutes of meetings, helps in the formulation of the agenda and ensures that proper meeting procedures are complied with.
- Another responsibility of the company secretary is preparing and filing the company annual returns with the Hong Kong Company Registry. Company annual returns are required to be filed with the company registry on a yearly basis and it serves as evidence that the company is a going concern.
- The company secretary is responsible for helping the company carry out its post incorporation filings. During the lifetime of a company, there may be need to effect some changes or alterations in the corporate set up of the company. Post incorporation filings are required to be done with the company registry in order for these changes and alterations to be legally valid. Some of these filings include: addition or removal of directors or shareholders; transfer/allotment of shares; change of the company name; change of the objects of the company; increase or decrease in the company’s share capital; alteration of the company’s registered address etc. Whenever the company decides to alter some aspects in its corporate set up, the company secretary has to prepare the necessary documents and file same with the company registry in order for the alterations to attain legal validity.
- A company secretary also provides professional advice and guidance to the company’s directors and shareholders on corporate governance issues. He or she should be able to proffer solutions to help the company establish a viable corporate structure.
- Company Secretaries do not only work and collaborate with the company’s shareholders, directors and officers, they also have to work and collaborate, on behalf of the company, with different government regulatory agencies responsible for overseeing the activities of companies registered in Hong Kong. These agencies include the Company Registry, Hong Kong Stock Exchange and the Inland Revenue Department. The company secretary has to ensure that the company is always in compliance with the regulatory measures initiated by these agencies from time to time.
- The company secretary can also carry out other miscellaneous duties, for example helping the company apply for business registration certificate or its renewal. He or she could also assist in opening the company’s corporate bank account.
Who to appoint as a company secretary?
In choosing a company secretary for your company, you should go for a specialized company secretary and not just anybody. The company secretary you choose to bring onboard your company should possess certain fundamental qualities. What are these qualities? Find them below :
Expertise in Corporate Governance
Company Secretaries, being the corporate governance expert in a company, need to have some professional and formal training in corporate governance and company secretarial services. They should equally be up to date with changes and developments in corporate governance and the regulatory and compliance framework affecting your company.
The Company Secretary must ensure that he or she is abreast with the business of your company. They should understand the rudiments of transforming corporate governance ideals into workable policies, procedures and processes for your company. They should be able to develop these procedures and policies in a manner that is practical and easy to implement.
A good company secretary should be able to plan and organize activities within his or her scope of control. The necessity of a company secretary having the ability to plan cannot be overemphasized considering the fact that the company secretary is in charge of organizing and planning company meetings and complying with a lot of schedules and deadlines. These responsibilities, by their nature, require a great degree of planning ability.
The job brief of company secretaries include working with senior members of the company which includes shareholders, directors, managers, executives and investors. A company secretary should be able to effectively pass across information to this group of people, either orally or through writing.
He or she should be able to exhibit tact, emotional intelligence, language skills, negotiation ability and diplomacy to ensure that others understand and agree with his or her point of view. The ability to listen well and understand instructions is also a basic skill of a company secretary. The company secretary should be aware of the goals, strategies and plans of the company and should be able to make decisions that bring the company closer to these goals.
Responsibility and independence
The company secretary is the custodian of the company’s conscience. Being in this position requires the company secretary to have a great deal of responsibility and integrity towards the affairs of the company.
A company secretary should also be able to display courage and be fearless when counseling or guiding the company on corporate governance issues. He or she should be able to exhibit a high level of independence when dealing with other senior staff members of the company and be able to fearlessly bring up issues or concerns that if not properly addressed will negatively impact on the company.
The company secretary should possess the skill to make assessments and take the right decisions, especially when conflicting issues and circumstances arise. He or she should be able to pay attention to detail and ensure that no important issue or consideration escapes his or her attention span.
A good company secretary should be committed to the job. He or she should have the interest of the company at heart and should take decisions that help the company attain its short term, medium term and long term aspirations.
The above are the characteristics of an ideal company secretary. The company secretary which you choose to bring on board your company should possess, at least, a majority of these characteristics. This is due to the important roles a company secretary play in your company.
You certainly do not want to gamble on an incompetent company secretary
Having trouble finding a great Hong Kong company secretary that fits the bill? Contact us and we will provide you with company secretarial services that will help your company stay on the right side of the law and attain its corporate governance objectives.
It is estimated that close to 150,000 companies are incorporated annually in Hong Kong. Hong Kong is undoubtedly one of the major financial centers in the world. Hong Kong is very attractive to international investors and business persons. This accounts for the large influx of foreign owned companies in Hong Kong.
Register with the Hong-Kong company registry
In order to reap the benefits of doing business in Hong Kong, it is imperative that you have a company, or other type of formal business association, registered and domiciled in Hong Kong. Companies (except for sole proprietorships or partnerships) are required by law to apply for a corporate status within one month of commencing business in Hong Kong. All local limited liability companies or non-Hong Kong companies with business concerns in Hong Kong are required to register with the Hong Kong company registry.
There are a lot of benefits of having your company registered in Hong Kong. For example, dividends of a Hong Kong limited liability company are not taxed. Only where profits earned from Hong Kong are equal to or greater than 16.5% of the net profits of the company will a company’s profits be taxed. Also, as a foreigner, you’re free to either be a principal shareholder and/or director of the company. Having a Hong Kong company certainly gives you freedom of entrepreneurship and legal certainty.
Shelf company or new company?
In choosing to get yourself a Hong Kong company, you can either choose to buy a shelf company or have a fresh company registered from scratch. Shelf companies are companies that are registered, but are passive or inactive. After buying the shelf company, you will have to alter the objects clause of the company and change the directors, shareholders and company secretary to the ones of your own choosing.
You may also decide to change the name of your new company, increase the share capital and the registered address of the company to match your preferences. Using our corporate services is a wise choice to get you a list of great shelf companies that will match your business goals and aspirations. We can also help you carry out necessary filings and documentations to personalize the shelf company for you.
Alternatively, you can decide to form a new company from scratch. An advantage of choosing to form a new company includes the ability to imprint your own unique identity on the company. In all circumstances, you should weigh the advantages of buying a shelf company to incorporating a company from scratch. For personalized advice please contact us and we will connect you with one of our specialists to guide you in making the right choice.
A 7-days process
As an investor or business looking to incorporate a new company in Hong Kong, you may be confused as to what steps to take to get this done. Registering your company in Hong Kong isn’t as complex as it seems, especially when you have a reliable agency like us helping you handle the process.
The process of incorporating a private limited company in Hong Kong usually takes about 7 business days to complete, barring any unforeseen circumstance. It starts with choosing the name of your company and getting it approved and ends with getting your incorporation certificate.
If you need us to help you incorporate your Hong Kong Company, you will have to provide 3 company names (in English, in Chinese or both) in order of preference in order for us to get started with your company registration.
You will also need to provide the following details
- The address of at least one director and one shareholder (one address will suffice when the director is the sole shareholder). You will have to attach evidence of these addresses, such as a utility bill or a driving license.
- A copy of your passport
- Which business activities you wish to engage in with your new company. You can lift this out of your business plan. We can help you package a great business plan if you don’t have previous experience creating a business plan.
- A copy of document evidencing payment of assessed fees by bank transfer to our bank account.
Once you’ve provided the documents above, we’ll commence your company incorporation process through the following steps.
1. Name Availability (1 business day)
Once we receive your payment, we will check the availability of the company name. Thereafter, if the name is available, we’ll send to you the documents that you need to complete and sign to get the company incorporated by the Hong Kong company registry.
2. Return of original incorporation documents to us (1-5 business days)
Once you’ve completed and signed the incorporation documents, you should return them to us either through email or courier service (whichever is possible). You should endeavor to do this as fast as possible as this will enable us commence the approval process with the company registry.
3. Incorporation of the company (7 business days)
Upon receipt of the documents and confirmation of your payment, we will start the procedures of getting your new company registered with the Hong Kong company registry. The certificate of incorporation and other incorporation documents should be issued within a 7 working days period.
A company bank account has to be opened within a month of registering your company. We have experts of bank account opening in Hong-Kong. There are also certain demands that a company involved in certain businesses must comply before commencing business in Hong Kong. A company intending to engage in financial services must register with the Ministry of Finance.
Operating a commercial enterprise, retail shop, a travel agency, a restaurant, an employment agency, business training, a financial services agency require you to obtain a license or permit from the appropriate authorities, so it is important to contact the competent authorities before you set out on any of these types of businesses.
Our 14 years experience can help you
It is recommended to take the help of a lawyer or a qualified business consultant in Hong Kong for professional advice. Our corporate services include providing you assistance in this regard. Contact us and we’ll help you sort out all the paperwork you need to get the necessary licenses and permits to commence your business.
Only when you have completed the steps above, you can you start business activities and enjoy the benefits of having an offshore company in Hong Kong.
International Business Companies (IBCs) are offshore corporations (companies that are incorporated outside the parent country of the owners/shareholders) established under the laws of a country as a tax neutral establishment.
There is still “real” privacy in Hong-Kong
Many Northern American and European countries have stringent privacy, financial, fiscal and regulatory laws that severely limit the ease of doing business. However, there are a few countries (for example, Hong Kong, Singapore, Gibraltar, Macau etc…) that have less restrictive regulatory environments that make doing business much easier. Savvy investors and businessmen (especially the ones engaging in international or offshore businesses) prefer to base their companies in these more business-friendly countries and operate out of them.
One way to identify International Business Ccompanies is that, even if their activities are taxable in other countries, they are generally not taxable in the country where they were incorporated. For example, the profits of IBCs in Hong Kong are not taxed except they earn up to 16.5% of their net profits from doing business in Hong Kong.
Another unique characteristic of an IBC is that the identity and confidentiality of the beneficial owners of the company can be protected. In many of the countries allowing incorporation of IBCs, a beneficial owner can appoint a nominee director and/or shareholder to act as the ‘figurehead’ of the company, while the beneficial owner retains the power to run the company and manage its day to day activities.
IBCs also have extensive corporate powers to carry out a wide range of business activities with minimal restrictions. In Hong Kong, IBCs are allowed to have wide object clauses which can include many unrelated businesses. However, there are some businesses that require a company to have permits or licenses. In Hong Kong, with the right permits and licenses, where necessary, IBCs are free to engage in most lawful businesses.
Another characteristic of IBCs is that there is no requirement to show corporate benefit before incorporating the company or doing business. It is also not mandatory for IBCs to issue shares (whether bearer or registered shares) to other persons or to the general public. IBCs are also not required to appoint local shareholders, directors or other officers to the company. Foreigners are free to wholly own an IBC without local input. However, it is noteworthy that IBCs in Hong Kong are mandated to have a local registered office address and appoint a company secretary who is resident in Hong Kong.
IBC is polymorphous
IBCs can be used for a lot of purposes. They can be operated as special purpose entities, assets protection tools and avenues to deliver professional services. You can use your IBC to buy and sell goods and services, open a bank account and carry out many different business transactions.
Your IBC can also be used to hold real property, shares, bonds and other investments. As a professional, you can register your intellectual property and franchises using an IBC. IBCs also allow you to carry out online businesses and deliver personal services to your clients while working offshore.
Again, having an IBC allows you to open an offshore corporate bank account in Hong Kong. Having a corporate offshore bank account easily allows you to carry out international trade and investment transactions. IBCs also help to avoid limitations (for example sanctions and embargoes) that make international business difficult.
Pros of establishing an International Business Company in Hong Kong (IBC)
IBCs in Hong Kong are not required to pay tax on income, provided they don’t earn up to 16.5% of their net profits from doing business in Hong Kong.
Minimal Business Restriction
Having an IBC in Hong Kong allows you to freely operate your business with minimal regulation from the government. You are free to engage in most business activities without having a license or permit. The ability to conduct your business with minimal regulation gives you the needed flexibility and freedom to grow your business.
Fast Incorporation Process
Incorporating an IBC in Hong Kong could be done within 7 days. You only need to provide relevant documents, pay necessary fees and take the appropriate steps to register your Hong Kong Company.
The KYC procedures required by the Company Registry in Hong Kong are not as stringent as that of many other countries. With a reliable and efficient business set up consultant, incorporating your Hong Kong IBC is a relatively easy process.
Top Notch Financial Services
Hong Kong is a major international financial center with some of the world’s biggest banks offering financial services. You have a wide range of options in opening an offshore bank account in Hong Kong and opening an offshore bank account in Hong Kong is relatively easier than in most countries. Having a Hong Kong based IBC allows you take better advantage of the top notch financial services rendered by Hong Kong banks. Your financial assets are also protected in Hong Kong and you are free to own high-end assets like yachts, real estate and gold without inquisition from the authorities.
In today’s business world, IBCs are becoming the safe and reliable option in doing international business
They are becoming increasingly popular with entrepreneurs and investors who are looking for the opportunity to maximize the potential of their businesses.
Setting up an IBC in Hong Kong can be a complex and intimidating process for a foreigner. However, using the services of a competent business set up consultant makes it much easier. Contact us if you need assistance in establishing an International Business Company in Hong Kong.