Setting Up and Managing a Hong Kong Ltd: A Comprehensive Guide

In this article, you will learn about the essential steps and considerations for setting up and managing a Hong Kong Limited company.

Onboarding

When establishing a Hong Kong Ltd, it is mandatory to undergo Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures as part of the due diligence process. Both shareholders and directors can be natural persons or legal entities.

For Natural Persons: The following documents are required:

• Certified copy of passport

• Certified proof of address

Additional KYC Requirements:

• Second certified copy of ID

• Professional reference letter provided by a lawyer or accountant

• Source of wealth declaration

For Corporate Directors: If you have corporate directors, the following corporate documents are required:

• Certified copy of the Certificate of Incorporation or a similar document evidencing the entity’s existence

• Certified copy of the Register of Directors

• Certified copy of the Register of Shareholders

• Certified copy of valid passport of the Directors

• Certified copy of a recent utility bill (issued no more than three months ago) of the Directors

• Certified copy of valid passport of the Shareholders holding 10% or more shares

• Certified copy of a recent utility bill (issued no more than three months ago) of the Shareholders holding 10% or more shares

For more details on the additional KYC requirements, refer to our helpdesk article here.

Nominee Directors and Shareholders

Nominee Directors: If you prefer not to be a company director, you can appoint a Nominee Director. Otonomos can provide a Corporate Nominee Director who will have no economic power and will only execute decisions made by the shareholders of the company.

Nominee Shareholders: Otonomos can also provide Nominee Shareholder positions for your Hong Kong entity. However, it is essential to disclose the Beneficial Owner of the entity.

Renewals

Hong Kong Ltd companies must be renewed annually on the anniversary of their incorporation date.

To ensure your Hong Kong Ltd remains in good standing, renewal payments should be made promptly, thereby avoiding penalties for late payments.

Entity Management

Annual Return: In Hong Kong, it is mandatory to provide an annual return, which must be filed at the time of your entity’s renewal. Timely submission of annual returns is crucial for processing the entity’s renewal.

Profit Tax Return (PTR): Filing a Profit Tax Return (PTR) is mandatory in Hong Kong to maintain the entity in good standing.

Annual General Meeting (AGM): An Annual General Meeting (AGM) is required for all companies incorporated in Hong Kong. It provides shareholders with an opportunity to review the company's performance and make important decisions about the company’s future.

Closing Down the Entity

There are two methods to close a Hong Kong Ltd: formal dissolution or company strike off.

Company Dissolution: To correctly shut down the entity without any loose ends, you can file for a company dissolution. This method ensures that everything is handled properly.

Company Struck Off: If the entity fails to pay renewal fees or submit the required statements, it can be struck off. This method is an alternative to dissolution and occurs when the company is no longer in good standing.

Setting up and managing a Hong Kong Ltd requires careful attention to compliance and regulatory requirements. Understanding these steps will help ensure your entity remains in good standing and is well-managed throughout its lifecycle