By Vlad Cuc, specialist in company formation matters
The private limited liability company in Hong Kong is a type of company that has legal capacity and offers the protection of the personal assets belonging to the founders.
Investors who set up a private limited liability company in Hong Kong
(LLC) typically run small and medium-sized businesses. One important characteristic for this type of company
is that it has a separate legal entity and its shareholders have limited liability: they are only liable for the debts of the company according to the amount of investment in the company’s share capital.
The LLC must have at least one shareholder, a company director, and a secretary. The maximum number of shareholders for this type of company is 50 and there are no requirements regarding their residency. The company director
can also be a shareholder. The shares are transferable only according to the specifications contained in the company’s Articles of Association. The shares cannot be traded publicly.
Another advantage of the limited liability company in Hong Kong
is that there is no mandatory minimum share capital
. Moreover, the existing capital is easy to raise. The company does not depend on changes in shareholders and continues its activities after the resignation, insolvency or death of a shareholder or director.
The main traits of the Hong Kong limited company are summarized in the table below:
| Trait || Details |
| Incorporation: || Must be registered with the Companies Registry, according to the provisions of the Companies Ordinance |
| Liability: || The shareholders of the company are only liable up to the extent they have invested in the company |
| Management: || Must have one director and one shareholder |
| Taxation: || The LLC in Hong Kong enjoys a low corporate income tax; there are no withholding taxes on dividends and interest and no VAT |
The LLC enjoys a light taxation regime in Hong Kong, one of the main characteristics that are appealing to investors. The LLC, as a business structure, offers a professional and positive business image, compared to the partnership or the sole trader. What’s even more, the corporation, compared to the sole trader, can have an unlimited duration (or as otherwise specified in the Articles of Association) even in the event of the withdrawal or death of the shareholders. Business continuity and credibility are two important traits that investors take into consideration when opening a private LLC.
How to set up limited companies in Hong Kong
- - the Articles of Association;
- - a completed incorporation form;
- - a notice to the Business Registration Office.
- - details about the share capital as well as about the shareholders;
- - official English translations, when needed.
The business owner must choose a suitable company name that will not infringe any intellectual property rights. The applications for company incorporation are submitted to the Companies Registry in Hong Kong
. Depending on the business field in which they operate, LLCs may need to obtain special permits and licenses
. These documents can be obtained from the Trade and Industry Department of Information.
The investor must open a bank account
for the company incorporated in Hong Kong. The Certificate of Incorporation
and the Business Registration Certificate
can be issued either in electronic form (for online applications) or in hard copy. They both have the same legal capacity. Some businesses will also have to register with the Inland Revenue Department.
Additional information about a LLC in Hong Kong
Private limited liability companies in Hong Kong need to observe the annual reporting and filing requirements. The legal entity must also make certain information available to the public at all times. The accounts must be audited on an annual basis.
Limited liability companies in Hong Kong
are subject to a corporate tax
. Our company formation consultants in Hong Kong
can give you detailed information about the tax obligations for companies.
Limited liability companies in Hong Kong are subject to a corporate tax. Our company formation consultants in Hong Kong can give you detailed information about the tax obligations for companies.
The LLC requires a more complex set up procedure, compared to the sole trader for example. What’s more, the founders of the company will need to observe the provisions for disclosing some information about the company, such as the identities of the directors, the capital of the company and other details, as requested by the Registry. When the business is facing bankruptcy, regardless of the reason, entrepreneurs can choose to wind-up the company. In these cases, it is advisable to seek professional help as the procedure can be a complex one, depending on the number of creditors. One of our agents who specialize in company formation in Hong Kong can also help you wind-up the company.