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Opening a Ltd Company in HK

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  1. #1

    Opening a Ltd Company in HK

    As I know it’s very easy to open a trading company here in hk.

    Can anyone provide the guidance that how much capital is required to open the LTD company. With how many people it can be started. And the business would be online.


    Thanks.


  2. #2

    Join Date
    Jan 2017
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    23

    You can start a HK company with capital of only HK$1 and one director. You will also need a company secretary (person or company).
    You can set up a HK company within hours on line once you have all the information gathered.

    If your business does not require immediate limited liability, then I would recommend starting as a sole trader to see if your business works. This requires less ongoing costs and form filing compared to a limited company.

    Good luck.


  3. #3

    Join Date
    Mar 2007
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    777

    The hard part is opening a bank account...


  4. #4

    Join Date
    Feb 2011
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    Hong Kong
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    Opening a limited company is easy and fast, you can do it online if you have a registered account (have to go in person to verify your identity the first time).

    No cash is needed. Opening a bank account is the trouble, and you need to keep up with audits too! Don't think you can just open it and leave it, as such is the case in other countries. You need to pay money to close the company down too.

    mkusafzai and markranson like this.

  5. #5

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    Compared to the UK, I find it very troublesome here.

    In my opinion, if you don't need a limited company, consider a sole proprietorship...much easier to manage, cheaper and easier to set up, no need to pay accountants, etc...

    markranson and mkusafzai like this.

  6. #6

    Usually when do we need to open bank account? Before registering business or after ?

    Thanks for the details and your time.

    Btw which registered account are you talking about ?

    Quote Originally Posted by SpeakCantonese:
    Compared to the UK, I find it very troublesome here.

    In my opinion, if you don't need a limited company, consider a sole proprietorship...much easier to manage, cheaper and easier to set up, no need to pay accountants, etc...
    Thanks for the details, yes it’s easy to open sole prop and easy to manage.

    Quote Originally Posted by MandM!:
    Opening a limited company is easy and fast, you can do it online if you have a registered account (have to go in person to verify your identity the first time).

    No cash is needed. Opening a bank account is the trouble, and you need to keep up with audits too! Don't think you can just open it and leave it, as such is the case in other countries. You need to pay money to close the company down too.

    Thanks for the details and your time.

    Btw which registered account are you talking about ?

    Audit is required once a year, is it ?

    Quote Originally Posted by muzzdang:
    The hard part is opening a bank account...
    Usually when do we need to open a bank account? Before registering business or after ?

  7. #7

    Join Date
    Jan 2017
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    23

    Cool

    Here is a breakdown of the costs for setting up and running a limited company.

    Company incorporation HK$ 1,720 - one off fee
    Business Registration HK$ 2,250 - yearly fee

    Audit is needed once a year. First audit is 18th months from company incorporation. Cost will vary from HK$ 5,000-15,000+ depending on revenue and the amount of transactions.

    Company secretary to deal with all the government form filling you need to do. Cost about $2,000 a year but you can opt to do this yourself but make sure you understand what you are doing otherwise the fines will mount up. Every time you need to change something about your company - shares, shareholders etc, you will need to pay the government a fee.

    You need an official registered address. A lot of companies offer this if you don't want to use your own address. Cost about HK$ 500 a year.

    Other Considerations
    Develop a financial budget - make sure you know you can make money from your venture before setting up your company. List all your income and costs and see what profit you make. Be realistic.

    Set up your accounting system from the start - you may not think you can afford one at the start and you will use excel instead. You will only pay for this later on. There are plenty of free accounting packages out there.

    Make sure you know your obligations about being an employer and employing staff and MPF.

    Make sure you understand what you can pay yourself as a director of a company and what is and is not applicable to salaries tax and/or profits tax.

    Running a limited company requires your attention on a yearly basis if you don't want the IRD knocking on your door. Do not trust anyone that says, you don't need audits or need to file a particular form. I have seen far too many company directors being fined for being slack when it comes to dealing with government bodies.


    Or you can just set up as a sole trader and pay the $2,250 yearly fee and forget everything else I mention above.<lol> As I mentioned in my previous post, this is the cheapest way to start your business if you are not sure it will succeed and don't require limited liability.


    Bank Account Opening
    Your company needs to exist before you can open a bank account. Normally, to set up a bank account they will request contracts, sales invoices, quotes - something that will show you are a true company and able to trade. This is a bit of a catch 22 I know. Some kind of proof of how you can fund the company and of course attend the dreaded bank interview. Bank of China is normally quite good at taking on new businesses. Try them.

    There is a on line bank in HK that is backed up Standard Chartered and has all the monetary regulations behind it. They are at final stages of the alpha testing (which means its live but you get it for free in case there are any bugs or further enhancements they need to implement) You don't need to be physically in HK to open the bank account, or have contracts etc. All you need is your company details, passport/ID details, fill in an on line form and then for you to take a video of yourself. If you are successful you can have a bank account opened in a week and credit cards (more like visa/mastercard debit cards) in a further week. I opened one and can confirm everything I said. I researched the company heavily before putting my toe in the water (as everyone should). I have no links to the company whatsoever but ow I regularly send clients to them. Happy to provide their website details.

    Good luck.
    simonkwan, shri, mkusafzai and 9 others like this.

  8. #8

    Join Date
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    @TallT - Can you share this bank's info - either via PM or on here?


  9. #9

    I had the most terrible experience with the Bank of China and will personally avoid this bank going forward. They did about everything so I should NOT open an account with them and kept on requesting the most ridiculous demands. I gave up after 3 months...

    If you start as a sole proprietor, keep in mind the option of opening a personal account in your own name (not your business). A business account opening can take 2 months or longer, a personal account can be set up in a few days. This, of course, may all be subject to internal bank regulations and things like that.

    A sole proprietor may use a personal account for his business.

    A personal account gives you the possibility to make invoices and at least get paid, while you have time to open a business account. I believe it is better to work with a business account after all; the private account is just a temporary solution.

    mkusafzai likes this.

  10. #10

    Could you share that banks info here or in Pm. It would be helpful. Thanks


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