By Vlad Cuc, specialist in company formation matters
Non-profit organizations or charitable institutions can be used to provide assistance and aid in a number of sectors like education or healthcare. These voluntary or non-profit organizations must qualify as a charity in order to benefit from a tax exemption from the Hong Kong Inland Revenue Department.
Not all non-profit organizations
are considered charities or function as such. Those who want to invest in this type of organizations, regardless of its charity purpose, can request the help provided by a team of company registration agents in Hong Kong
Our experts invite you to watch a video on setting up these types of companies in Hong Kong:
Non-profit or charitable organizations in Hong Kong
The purposes generally accepted as charitable under the Hong Kong law include the following:
- poverty relief;
- education support and/or advancement of education;
- religious organizations or those use to promote the advancement of religion;
- other charitable acts for the community.
Investors who want to open a Hong Kong company
and register it as a non-profit organization should be aware that the acts and activities that qualify as charitable under the directives of the Inland Revenue Department are only regarded as such as long as the organization performs these acts to the benefit of the Hong Kong community.
Non-profit organization set-up in Hong Kong
The non-profit organization or charity can be set-up in the form of a trust in Hong Kong. alternatively, investors can open a company.
The legal status of a charity of Hong Kong will be that of a limited liability company, should the investor choose to set-up a company for charitable purposes instead of a fund. The company registration process includes a few basic steps, among which picking up an available name for the future non-profit organization, drawing up the company’s Articles of Association and appointing the company directors.
According to the Inland Revenue Ordinance, legal entities that qualify as charities in Hong Kong are exempt from taxation
. Those who open a Hong Kong company
that is considered a charitable institution will benefit from a profits tax
exemption of the profits obtained are used solely for charitable purposes.