Establishing a Hong Kong personal, limited company is not always easy. After all, it is a different system than that of the UK. Setting up a Hong Kong company is not even comfortable. Setting up an established company in the UK can take years to accomplish. However, setting up a Hong Kong company is difficult, but it can be time-consuming and complicated. Here are some benefits of Hong Kong company formation:
There is no difference in the voting procedure between an established company in the UK and a Hong Kong limited company formation. Because a limited company exists solely to function as an entity separate from its shareholders, there is no need to have an annual general meeting. It means there are no chances for the shareholders to discuss business and how it should be run. Also, because no one living in Hong Kong can have a vote, there is no need to choose a voting procedure.
One of the most significant benefits of Hong Kong limited company formation is that it allows you to avoid paying tax on the investment. If you were to do this in the UK, you would have to pay income tax on any profit made, except for some business expenditure types. Most businesses in the UK do not benefit from this arrangement, but many do. You can save a lot of money this way and are better off financially in the long run. Besides, you will not be subject to the double taxation treaty, which applies to companies incorporated in the UK.
A Hong Kong limited company also allows you to enjoy all the benefits of a fully functional private company, without the hassles. It includes access to a stock market and capital. You must have a registered office with a private company and pay taxes on your dividends (even though they are exempt). You also must comply with several rules including annual payments, filing of annual returns, paying the S corporation, and so forth. With a Hong Kong company, there are none of these things.
Limited company benefits also include the ability to change the ownership structure, as the company’s name and control are legally vested in a single shareholder. It allows you to alter your share structure as you wish. For instance, you could add or remove directors, increase, or decrease the outstanding shares, and more. You would not need a third party to approve any of these changes. It will also be simpler to sell the shares if you wish to, as the shareholders will already have authorized the transfer of their claims.
Hong Kong limited company formation also allows you to appoint one corporate secretary for the formation term. The maximum number of shareholders that can be set is four. Once established, the Corporate Secretary is given authority to handle and maintain its accounts and bookkeeping.
Also, under the Hong Kong Limited Company formation laws, no transfer or exchange of stocks can occur between the company and any third party, unless otherwise stated in the Articles of Association. Transferring of shares is only possible when an election of a new director or a winding-up petition is submitted to the court of law. Only in these circumstances can you transfer your shares. If you do not follow this rule, then you are liable to pay income tax on all profits from the sale of your company’s shares.
Besides, to maximize the benefits of limited liability, it is advisable to choose a registered office in Hong Kong. It means that all your official documents will be filed in the offices of the Companies House. It will save you a great deal of time, as you will not have to visit each office to file your documents personally. Instead, you may appoint one or more employees in each location, and they can take care of all your documentation without fear of personal prosecution.