Hong Kong is known for its excellent infrastructure, free economy, and low taxes. Its location in Asia, close to Mainland China, makes it an ideal location for businesses operating in the Asian market and worldwide.
Key facts about subsidiaries in Hong Kong
is the most popular business form chosen by foreign companies in Hong Kong
. The subsidiary is a private limited liability company registered in Hong Kong
treated as a separate legal entity from its parent company, thus the liabilities of the subsidiary do not extend to the parent company, as they would in the case of a branch in Hong Kong.
The four main traits of the subsidiary in Hong Kong can be summarized as follows:
• Independence: this is possibly the most important trait of the subsidiary, as the company in Hong Kong is completely independent of the parent company abroad.
• Limited Liability: the subsidiary is a Hong Kong limited liability company meaning that both the founders and the parent company only have limited liability in terms of debts and obligations incurred by the subsidiary.
• Distinct Management: the management of the subsidiary is separate from that of the parent company; the subsidiary handles its own accounts and accounting.
• Flexibility: the subsidiary is independent of the parent company and this also extends to the business activities; it can perform the same business activities and others if needed.
The subsidiary can have the same name or choose a different one and it can have the same listed activities or these can differ. However, it is important that the name of the company is approved by the Companies Registry
. Our tool allows you to perform a preliminary name check
for the subsidiary. There is no minimum or maximum share capital for a subsidiary in Hong Kong
and subsidiaries are subject to the same tax regime and tax rates applicable to private limited companies.
The basic requirements for a subsidiary include:
Our company formation specialists in Hong Kong
can tell you more about the accounting requirements for subsidiaries and other types of companies
Register a subsidiary in Hong Kong
· - the application form, signed and completed;
· - the incorporation documents for the subsidiary;
· - The parent company’s Memorandum and Articles of Association and Certificate of Incorporation;
· - Documents for the appointed company officers: identification documents, proof of residence and a bank letter.
A registration fee and a capital fee apply. The procedure usually lasts between four and seven days. After the company is registered, a Certificate of Incorporation will be issued. After registration, any company must register at the Inland Revenue Department and obtain a Business Registration Certificate. Companies will also need to open a bank account and apply for any necessary business licenses, according to the type of activity they perform.
Requirements for Hong Kong subsidiaries after registration
After the company is registered with the Trade Register in Hong Kong
, it must also register with the Inland Revenue, which is the tax authority in this country. The Inland Revenue will issue the Business Registration Certificate which will enable the subsidiary to operate in Hong Kong
The next requirement is for the subsidiary directors
or representative of the company to open a corporate bank account with a Hong Kong Bank. Our Hong Kong company formation agents
can assist with the opening of the bank account. Once these requirements are complied with, the Hong Kong subsidiary
may apply for the business license which will be issued by the competent authority. It must be taken into account that certain special licenses could be required, depending on the activity of the subsidiary
Taxation of subsidiaries in Hong Kong
As mentioned above subsidiaries in Hong Kong
will be treated the same as local companies in terms of taxation. The corporate tax for a Hong Kong subsidiary
is 16,5%, which is one of the lowest in Southeast Asia. Apart from that, the parent company may also file for certain tax exemptions or credits depending on the double taxation agreement its home country has signed with Hong Kong.
Subsidiaries must also comply with the same accounting regulations as Hong Kong companies. They must file their tax returns within one month of their issuing by the Inland Revenue Authority. The tax year in Hong Kong starts on April 1st and ends on March 31st the next year.
Our company formation consultants in Hong Kong
are ready to assist you and answer any questions. Please contact us
for additional information.