Benefits of Company Registration in Hong Kong
If you are considering establishing a new company in Hong Kong, you may be wondering about the advantages of foreign company registration in Hong Kong. First and foremost, a foreign company can increase its corporate strength by having access to talented professionals from foreign countries. Second, by setting up a foreign company in Hong Kong, it is easier for your company to enjoy tax benefits. Third, establishing a foreign company in Hong Kong can help you develop subsidiary units in many foreign countries.
There are some main benefits of foreign company registration in Hong Kong that have attracted many domestic and foreign investors. A foreign subsidiary is virtually established in the same way as its parent company. A branch office exists in Hong Kong, and the Companies Registry supervises its work. It is also an extension of the parent company and is thus one of the most popular business structures for foreign entrepreneurs.
The benefits of company formation in Hong Kong for the parent company are no different from other foreign countries. It has the same registration and corporate documents as applied for in your country. Besides, it must comply with the basic corporate compliance requirements as those required in your country. Third, foreign companies need to register with the Companies Registry and pay the appropriate annual registration fees.
On the other hand, foreign companies have some specific benefits that you cannot enjoy because of having a branch office in Hong Kong. The main one is the need for office space because the primary business operations are usually carried out at the parent company’s location. Besides, it has specific requirements such as a legal language and a workplace that meet your industry’s needs. You will also be required to submit annual reports to the parent company and complete other administrative requirements.
Furthermore, a branch office has its personnel, with a limited number of employees. It means that you will have to hire an efficient staff for the Hong Kong operation, and thus the expenses related to employing them will be higher than for a traditional company with branch offices. The cost of operating a branch office will be higher if you require high-level skills compared to an employee hired strictly for administrative purposes.
A branch office needs to comply with the requirements for a business presence, such as: obtaining a business license, registration of company affairs, paying the income tax, paying social security, and maintaining its books. To operate in Hong Kong as a foreign company, you will need a representative office. It is the person who will be handling most of the correspondence between the parent company and the employees of the local subsidiary. The representative office will also be responsible for posts with government agencies, the Hong Kong Stock Exchange, the Reserve Bank of Hong Kong, the Commodity Futures Trading Commission, the Hong Kong Customs and Excise Department the Bank of China.
The benefits of establishing a business presence in Hong Kong through a branch office are the following: it will ensure easy interaction between you and the expatriate staff, maximize the use of resources of your parent company, provide you with a more professional image, attract potential investors, simplify administrative procedures, and create a more uniform corporate identity. You can expect better access to the latest technological advances, including computers and Internet applications, and better access to information and technology. Additionally, establishing a branch office in Hong Kong will facilitate your employees’ acquisition of skills and knowledge.
When you establish a business presence in Hong Kong through a branch office, you will need to comply with specific requirements. First, you must make sure that the firm has obtained the office of the Secretary of State’s consent for its establishment. You must also ensure that it has adhered to all the requirements set out by the Office of the Chief Executive, including the condition that it has a permanent address. Besides, you must make sure that the branch office can function independently from its parent company. Lastly, all foreign companies require you to comply with the Basic Employment Law, which states that employees of a company are only employees if they have been hired through their employer’s legitimate and voluntary agreement and have received their employer’s consent.
foreign company registration in Hong Kong