Hong Kong has long been recognized as a premier jurisdiction for setting up a company, attracting entrepreneurs and investors from around the globe. Its strategic location, robust legal framework, and business-friendly policies create an ideal environment for both local and foreign businesses. The city boasts one of the lowest corporate tax rates in the world, starting at 8.25%, along with a straightforward registration process that allows companies to be set up remotely. In 2024, the Hong Kong Companies Registry reported a surge in new company registrations, with 145,053 new companies registered during the year.
This article serves as an updated guide on incorporating a Hong Kong limited company in 2025.
Rules on Company Names
The Hong Kong Companies Registry has specific rules and requirements regarding the naming of a Hong Kong limited company.
Language
A company can be registered with either an English name, a Chinese name, or both. However, a combination of English letters and Chinese characters in a single name is not permitted.
Company name must end with “Limited”
An English company name must end with “Limited,” while a Chinese name must conclude with “有限公司” (which translates to “Limited Company”). The abbreviation “Ltd” is not acceptable. Company names in Hong Kong cannot end with “Inc.”.
Identical or confusing names
The proposed company name must not be identical or confusingly similar to any existing company names registered in Hong Kong. The Companies Registry has the authority to direct a company to change its name if it is deemed too similar to another registered name.
Prohibited company names
Company names are prohibited if it:
- constitutes a criminal offense,
- is considered offensive or contrary to public interest,
- suggests a connection with the government or other government agencies
If the prospective company name contains specific words which could be confused with official government bodies, then prior approval from the Companies Registry is required. These terms include “chamber of commerce”, “trust”, “association”, or even “CPA”.
Appointing the Key Personnel of the Hong Kong Limited Company
These are the roles that must be appointed in a Hong Kong limited company:
Directors: Hong Kong limited companies are required to have at least one director. Directors must be at least 18 years old and not bankrupt or convicted of serious crimes. The directors can be of any nationality, and the directors can be residing anywhere in the world. Hong Kong directors do not need to be Hong Kong residents. However, the director’s residency may affect the company’s ability to open a bank account.
Shareholders: Hong Kong limited companies require a minimum of one shareholder, with a maximum of 50. Shareholders can also be directors, and they can be individuals or corporate entities. Hong Kong allows the use of Nominee shareholders, where shares in the Hong Kong company are held on behalf of the actual ultimate beneficial owner. However, disclosure of the ultimate beneficial owner is required in the significant controllers register as of 2018.
Company Secretary: Hong Kong limited companies must appoint a company secretary, who must be a Hong Kong resident or a Hong Kong corporate entity. This role involves maintaining statutory records and ensuring compliance with legal obligations of the Hong Kong government. If a company has only one director, that individual is prohibited from serving as the company secretary. This rule is in place to ensure proper governance and accountability within the company’s management structure.
If a Hong Kong corporate entity is appointed as the company secretary, it must have a registered office in Hong Kong, and be a holder of a valid Trust or Company Service Provider (TCSP) license issued by the Hong Kong Companies Registry. (Further Reading: Company Secretary FAQ)
Designated Representative: The role of the designated representative is to assist law enforcement and regulatory authorities regarding the company’s Significant Controllers Register (SCR). They are responsible for maintaining communication and ensuring compliance with relevant regulations.
The designated representative must be a resident of Hong Kong, and must either be a shareholder, a director, an employee, an accounting or legal professional, or a TCSP license holder.
Registered Office Address
Hong Kong limited companies are required to maintain a registered office address, which must be a physical address. The use of a P.O. Box is not permitted. The registered office is where the company must keep its statutory records, such as the register of directors, shareholders, and minutes of meetings. If the statutory records are kept in a place other than the registered office, then the Companies Registry must be notified by submitting Form NR2.
The name of the company must be displayed clearly at the registered office, and the office must be accessible during business hours. Failure to properly display a company name can lead to fines of up to HK$10,000.
Share Capital Structure
Hong Kong limited companies can have a share capital structure denominated in any major currency. The company must issue at least one share to at least one shareholder.
Documents required to incorporate a Hong Kong company
To incorporate a Hong Kong company, clients are required to provide the following information and documents:
- Proof of identity: For local directors and shareholders, this includes a Hong Kong ID; for non-residents, a copy of an international passport
- Proof of address: For local directors and shareholders, this includes a Hong Kong ID; for non-residents, a copy of an international passport
- Incorporation form: Basic information regarding company information, desired structure, and due diligence related to and customer background
The Hong Kong Companies Registry allows the use of electronic incorporation for Hong Kong companies to be incorporated remotely through their government portal. Electronic incorporations have streamlined the process of setting up a Hong Kong company to as little as 1-2 business days.
Open a Bank Account for the Hong Kong limited company
Opening a bank account can often be the most difficult part of setting up a company in Hong Kong. The best method to approach this process is to assess the needs of the company and assess the likelihood of successfully opening a bank account with each type of bank.
The first decision is whether the company needs a bank account with the traditional brick and mortar banks or a digital financial service. Both types serve clients in different ways, and often, the best strategy is to actively apply with both. Ask us how we can leverage our relationship with the banks to help you open a business bank account in Hong Kong.
Yearly Business Registration Renewal and Compliance
These are the main obligations that a Hong Kong limited company needs to fulfil each year to maintain good legal standing:
- Filing of the Annual Return (Form NAR1): Hong Kong limited companies are required to file an Annual Return (Form NAR1) with the Companies Registry within 42 days of their incorporation anniversary each year. The Form NAR1 updates the Hong Kong Companies Registry on essential details such as company particulars, directors, shareholders, and the registered office address.
- Business Registration Certificate Renewal: Hong Kong companies are required to renew their Business Registration Certificate annually. This certificate must be displayed at the company’s registered office. The notice for renewal will be sent to the company’s registered office address each year around the time of the incorporation anniversary.
- Updating and maintaining the Company Statutory Records: Accurate statutory records, including registers of directors and shareholders, minutes of meetings, and financial records, must be kept by the company as these may be subject to inspection by regulatory authorities. Updating and maintaining the company statutory records is the job of the company secretary.
- Audited Financial Statements: Hong Kong limited companies must prepare audited financial statements annually, which must comply with Hong Kong Financial Reporting Standards and have been signed off by a practicing CPA in Hong Kong
- Filing of the Profits Tax Return: Hong Kong limited companies must file a Profits Tax Return (Form BIR51) with the Inland Revenue Department (IRD), which includes details of assessable profits and tax computations. The return should be filed along with the audited financial statements. The IRD will then issue a tax bill based on the submitted tax computations.
Conclusion
Hong Kong has seen a sharp rise in the number of new companies being setup in 2024, and the trend is set to continue in 2025. The strategic location and favourable tax regime make Hong Kong an attractive jurisdiction for setting up a company.
