Company Formation in Hong Kong
Hong Kong Corporate Formation is now among the best business services offered to international investors worldwide. The high standard of living in Hong Kong makes it a preferred location for investments by foreign investors. There are many advantages after setting up a small business in Hong Kong. It is a convenient place for investors to set up their business as there is a vibrant economy with fast-growing markets.
One of the significant benefits of Hong Kong corporate formation as opposed to any other parts of the world is the “One Country” provision under the agreement made between the creditor and the debtor. This provision states that the business owner will be taxed only on the income from that country. Other than that, the business owner will enjoy the benefits of the corporate tax-free system in Hong Kong and will not have to pay income taxes to any government agency.
The next benefit that follows company registration is the company administration. After the formation, the company can deal with its issues and problems, and the local administration will not interfere. The local administration in Hong Kong follows a code of conduct that they have established. Therefore, a company formation in Hong Kong is easy and hassle-free. The company administration consists of simple steps like giving the director the necessary instructions to carry out the company’s activities, paying the appropriate bills, and giving the required reports on a timely basis. Even the payment of the annual rent and cost of other expenses are made at this point.
The benefits of company formation in Hong Kong extend beyond the simple ones, such as easy registration and simple administration. A company enjoys several advantages when it is duly registered.
One of the essential benefits of incorporating a company in Hong Kong is that it enjoys tax benefits. Companies are granted the privilege of issuing an annual return called the “taxation balancing certificate”. This process reduces the amount of tax paid by the company.
Another critical advantage that company registration in Hong Kong gives to the company is that it makes it easier for the company to do business. Companies must file their annual return and all their tax payments with the government within a specific time. If the company fails to comply, the penalty is severe. The failure to comply can result in the suspension or revocation of the company registration. The penalties and consequences become more severe if the company fails to submit the annual return on time.
There are several other benefits that the company registration in Hong Kong provides the business owner. A company registered in Hong Kong has the advantage of having its headquarters in the country. It means that its directors and employees benefit from offices and facilities in the country, including its library and conference rooms. Thus, the company can save on travel costs for meetings outside the country, and it also reduces the expense of international fuel charges. The business owner will also be able to apply for and receive loans and advances from lending institutions in the country. These include local banks and commercial establishments.
Business owners should remember that company registration in Hong Kong does not restrict them from taking up joint ventures or dealing with foreign investors. However, they still need to followup on the progress of projects financed by these investors. Companies may also choose to sell the shares of the companies they own or transfer the remaining shares to another shareholder. After that, the owner will need to submit a tax return to the concerned government agency.