Three Types of Company Registration
Are you interested in foreign company registration in Hong Kong? If so, then this article will give you all the information you need. Here is your complete list of business registration in Hong Kong, which includes detailed, actionable tips you can take right now to help make your launch into Hong Kong a big success. Knowing the benefits of company registration in Hong Kong will also help you understand what you are getting for the money you spend in doing so. To begin, here are the four main types of company that can be established in Hong Kong:
Limited liability company (LLC): This type of foreign company registration in Hong Kong allows limited partners to act as its directors and shareholders. Limited company formation in Hong Kong also allows limited liability. Here, the company has limited liability because its directors and shareholders cannot pay the company’s debts, such as paying the profits tax. The limited liability feature of the limited company formation in Hong Kong comes from the fact that only a few people or entities have any standing to bring a lawsuit against the company. Thus, limited company formation enables the company owners to protect their assets and income. The downside is that the limited company has less flexibility and control than the other types of company formation.
Public limited company (PLC): This is one of the simplest forms of company registration in Hong Kong. It works by allowing a limited partnership or company to manage its affairs through a Board of Directors appointed by the shareholders. The company enjoys all the privileges and benefits of a publicly traded corporation, such as having limited liability. The only disadvantage is that the limited liability means that the company’s profits have to be paid through the profits tax.
Private limited company (PLC): Like the PLC, the private limited company has limited liability. However, profit protection is not given to its shareholders. Instead, it is given to the manager or the director who manages the affairs on behalf of the shareholders. Unlike the public limited company, this type of company formation has some advantages. First, it is simpler to set up, faster to process, and a lower registration fee. However, it does not enjoy the benefits of the other two company formation types.
Public limited company: As its name indicates, this company type’s primary function is to register a business. It is managed by an agent or officers of the government who grant the company operating license. It enjoys most of the benefits of a publicly traded corporation, such as unlimited liability. However, it cannot appreciate the new horizons provided by the Registration of Business (ROC) scheme. Furthermore, the company cannot issue shares to its shareholders and only deal with the registered agents for trading purposes.
Limited partnership (LP): This company formation is a simple way of setting up a Hong Kong domiciled business. Two or more people can act as the company, with each one playing a shareholder’s role. The profit-making potential is the same as that of a public company. Moreover, it can have limited liability while still being able to carry on trading. Like the PLC, the Limited Partnership can enjoy some of the benefits of company registration in Hong Kong.
Private company: This is a highly complex company structure that enables a foreign company to set up a share of its own in a domestic business. A nominee director can act as the company’s manager, and a nominee shareholder can also be an employee of the business. The company can make its profits by trading the stock or issuing dividends. However, the company is restricted from making direct investments in the domestic market. Direct investments require an application and a license, and the profits made here are not tax-determined.
It is easy to register a company in Hong Kong. There are three ways to do so: through an agent, by self-registration, or through a company incorporation package. Though using an agent is costlier than the other two, it ensures that your company gets registered in Hong Kong under its name and can handle its transactions for a more extended period. On the other hand, self-registration allows you to open a company account online and use an appointed person as the company’s registrant and company secretary. Company incorporation packages are cheaper but not offered by all business establishments. To find out if a package is suitable for your business, contact the company registrar at its office in Hong Kong or China’s authorised registration company.
foreign company registration in Hong Kong