Starting a Company in Hong Kong – Pros and Cons
Starting a company in Hong Kong has many benefits for foreign entrepreneurs. The most significant advantage of company formation in Hong Kong is that it will not be too difficult for you to get a business license. You do not even need to have your own office or rent a place for your business to operate. If you are looking for an office space to set up a temporary agency, you can easily find one in any commercial property in the city.
You are starting a company in Hong Kong. You will still need to decide which type of company you will have. There are three basic types of company structures that you can choose from it. The first one is a Limited Liability Company or LLC. It is the simplest form of company setup, and it also comes with few restrictions. All you need to do is pay the registration fees, and you are done.
However, there are some disadvantages associated with a Limited Liability Company. First, if you become bankrupt, the company will still be liable for the debts of the previous owners. Second, even if you have no employees and run the business solely out of your home, you must register the company in the appropriate bureau. The bureau will then carry out your obligations like paying the annual business taxes. Finally, it will be tough for a new company to acquire a bank loan because it will not be considered a ‘real’ company.
The next type of company structure that you can set up in Hong Kong is an E Registration. An e-registration is similar to a Limited Liability Company, but it comes with more benefits. It is easier to comply with the laws because you do not have the option to incorporate your company in Hong Kong. The company does not come under the Bank of China’s jurisdiction, making it easier for you to obtain loans from financial institutions.
Another advantage of e-registration is that it has reduced risks. It is attributed to the fact that most people who set up an E-register are interested in promoting private limited companies. In addition, these individuals can enjoy the benefits of tax benefits that the government usually provides for its citizens. Finally, it is because registering an E-registered company does not involve creating a permanent structure. In short, an E-registered company enjoys all the benefits that an actual private limited company wants.
Starting a company in Hong Kong without the help of a company secretary is another popular option. Many people do not have the time or the skills to handle the intricacies of running a business. With the help of a company secretary, they can easily manage the company’s daily operations, such as receiving applications, answering calls, and making necessary arrangements.
In addition to the benefits that the company secretary offers, it is essential to note that there are several downsides associated with this method of starting a company in Hong Kong. The first downside is that you will not enjoy the benefits of having your office address. It is because when you register an E-company, you are only issued with a trading address. It means that you are not given the privilege of enjoying office space of your own. In effect, you will be sharing a room with other companies registered with the same Hong Kong company secretary you are using.
The next drawback that you will experience when you start a company in Hong Kong is paying the registration fees required by the law. If you could notbear the costs, then the company secretary will not process your application because you are not registered with the appropriate agency. Furthermore, if you are not satisfied with the services of the company secretary that you have chosen, you are free to leave the company at any time. However, it is essential to note that leaving the company if you are not happy with its performance will lose all the benefits you received from the E-company. Therefore, to minimize these consequences, it is highly recommended that you engage the services of a company secretary registered with the Office of Fair Trading or any other reliable certification body.