HONG KONG FAQ

Company Incorporation

Hong Kong Companies Ordinance does not propose any restriction for a minimum amount of share capital, a limited company shall be set up at least one share. Generally, the standard share capital is 10,000 shares, HK$10,000 in Hong Kong. Please note that all shares must be paid up and issued to company shareholder(s).

The Hong Kong company set up must possess at least one shareholder and one individual director. The company also needs a company secretary and designated representative of the Significant controller register, who is a Hong Kong resident or a Hong Kong corporate. The registered office and location of keeping Register(s) must be based in Hong Kong.

Tailor-made company by e-registration just 1~2 working days upon receiving sufficient due diligence documents and full advance payment if you’re an individual director and individual shareholder.

Accounting Auditing Taxation

Hong Kong profits tax rate is at 16.5% (15% for unincorporated business).
From the year of assessment 2018/19, the profits tax rate for the first HK$2 million of assessable profits will be lowered to 8.25% (half of the current profits tax rate) for corporations and 7.5% (half of the standard rate) for unincorporated businesses.
This tax rate concession is restricted to only one enterprise nominated among connected entities (i.e. has control over the other party or under common control of the same party).

i) a certified copy of Balance Sheet and Profit and Loss Account in respect of the basis period;

ii) a tax computation with supporting schedules showing how the amount of Assessable Profits (or Adjusted Loss) has been arrived at ;

iii) and other documents and information as specified in the Notes and Instructions.

In all cases if you cannot lodge a tax return by the due date or the extended due date, an estimated assessment will be issued and you may be required to pay more tax. You may also be subject to penalty proceedings which include payment of penalty, or even prosecuted.

Trading

Samples with a value below HKD1000 may not be declared, but please keep the relevant invoices. The government can ask you the reason for not declare within 2 years.

Samples with a value of HKD1000 or above must be declared.

If it is not a sample, customs declaration is required regardless of the value of the goods.

Before using letters of credit you should consider their advantages and disadvantages.

The main advantage of using a letter of credit is that it can give security to both the seller and the buyer.

Advantages for sellers

By asking for an appropriate letter of credit a seller is reassured that providing they present documents in order and within an agreed timeframe they will receive their money in full and on time

A letter of credit is one of the most secure methods of payment for exporters as long as they meet all the terms and conditions

The risk of non-payment is transferred from the seller to the bank (or banks)

 

Advantages for buyers

When a buyer uses a letter of credit they get a guarantee that the seller will honor their side of the deal and provide documentary proof of this 

Disadvantages of letters of credit

It’s important to be aware of the additional costs involved in using a letter of credit. Banks make charges for providing them, so it’s sensible to weigh up the costs against the security benefits.

If you’re an exporter you should be aware that you’ll only receive payment if you keep to the strict terms of the letter of credit. You’ll need to give documentary proof that you have supplied exactly what you contracted to supply.

Using a letter of credit can sometimes cause delays and other administrative problems.

Government to make the registration more user-friendly and convenient to the public, a food trader is only required to register once for all the food that he imports/ distributes. However, should he change the categories and classification of food that he imports/ distributes after the registration, he is required to notify Director of Food and Environmental Hygiene within 30 days after the change occurs.