Notes when setting up a company in Hong Kong

Setting up a company in Hong Kong requires businesses to take into account a variety of factors. In addition to choosing the appropriate legal form, businesses need to pay attention to the registration of the company name, charter capital, registered address, and procedures for applying for a business license (if any). In addition, it is extremely important to understand the tax system, labor regulations, and financial reporting requirements. To ensure full compliance with legal regulations and avoid risks, businesses should consult consultants. Viet An Law would like to note some information for customers when establishing a company in Hong Kong through the article below.

Notes on the company’s secretary and legal representative

Notes on the secretary of the company

A company secretary is an important position in the legal structure of a company in Hong Kong. They act as a bridge between the company and state agencies, ensuring that the company is fully compliant with legal regulations and reporting obligations.

Role of the Company Secretary

• Maintaining records: The company secretary is responsible for maintaining and updating the company’s records and books, including:
  • List of Shareholders
  • Minutes of the meeting
  • Decisions of the board of directors
  • Financial statements
• Liaison with state agencies: The company secretary is the person who represents the company when communicating with agencies such as the Business Registration Bureau, the Tax Department, and other regulatory agencies.
• Ensure legal compliance: The company secretary must ensure that the company always complies with the legal regulations related to business activities, especially the Companies Law.
• Fulfilling reporting obligations: The company secretary is responsible for filing periodic reports with the Business Registry, such as annual reports.

Requirements for the Company Secretary

• Individual: Must be permanently resident in Hong Kong.
• Legal entity: Must be a company registered in Hong Kong and have a corporate and trust services (TCSP) license.

Notes on the company’s legal representative (appointed representative)

Designated Representative is an important concept in Hong Kong’s corporate law. It is an individual or legal entity appointed by a company to carry out legal transactions, representing the company in relationships with state agencies and third parties.

Role of Designated Representative

• Legal Representative: The designated representative has the right to represent the company in legal transactions, enter into contracts, participate in meetings, and perform other legal obligations.
• Liaison with state agencies: The designated representative is the main liaison between the company and state agencies such as the Enterprise Registration Bureau, the Tax Department, and other regulatory agencies.
• Receive notifications: The designated representative is the recipient of notices, administrative decisions, and other legal documents sent to the company.

Requirements for Designated Representatives

• Individual:
  • Must be a director, employee, or member of the company.
  • Must be permanently resident in Hong Kong.
• Expert:
  • It can be an accountant, lawyer, or a person with a corporate and trust services license (TCSP).

Notes on annual tasks

A corporation is an independent legal entity, meaning it is a separate legal person from its owners. The benefit of limited liability through operating as a limited liability company also brings the obligation to comply with various provisions in the Companies Law (Cap. 622). These obligations include the timely disclosure and reporting of specific information about the company, its officers and shareholders, etc., and any changes in such data to the Business Registry so that the public can easily access the latest information of the company held by the Business Registry.

The annual compliance requirements of a Hong Kong company include:

Notes on compliance with the Significant Controller Register

Under the Companies Amendment Law 2018, all companies incorporated in Hong Kong (except listed companies) are required to comply with the requirements of the register of material controllers.

A Significant Controller is an individual or organization that meets one or more of the following conditions:

• Directly or indirectly holding more than 25% of the company’s issued shares.
• Directly or indirectly hold more than 25% of the company’s voting rights.
• Have the right to appoint or dismiss a majority of members of the board of directors.
• Have control or actual control of the company.
• Have control over the operation of a trust or company that is not a legal entity.

Critical Controller Compliance Requirements

To comply with the regulation, the company must:

• Identify the material controller: The company needs to review documents such as the register of members, the company’s charter, and the shareholders’ agreement to identify the key controller.
• Maintaining a Register: The Company must establish and maintain a register of material controllers, including personal information and how it is controlled.
• Appoint a representative: The company needs to appoint a representative to assist the authorities in accessing and inspecting the registry.
• Register keeping: The register must be kept at the company’s headquarters or designated location.
• Update information: The company needs to update the information in the registry when there are changes.