A foreign company may wish to incorporate a wholly-owned Hong Kong company as a subsidiary. Companies incorporated in Hong Kong may be public or private and may be limited by shares or by guarantee. The vast majority of companies in Hong Kong are private companies limited by shares.

Nature and key conditions of a private company limited by shares

Company name	-	Must be unique and must not include certain restricted words. It may be in English or Chinese or both.
Share capital	-	Must have a share capital, but there is no restriction on the minimum or maximum share capital.
Shareholders	-	There may be anything between one and 50 shareholders. The liability of each shareholder is limited to the share capital they have invested.
Registered office	-	A company must have a registered office address in Hong Kong. This serves as the company's legal address for notices and proceedings and can be different from the business address.
Directors	-	One is sufficient . Directors may be corporations unless the company is part of a listed group or individuals of any nationality, domicile and residence.
Company secretary	-	The company, however, must appoint a company secretary (to ensure compliance with ongoing legal returns, accounts, audit and other requirements) who, if an individual, must ordinarily resident in Hong Kong, or if a body corporate, have its registered office or a place of business in Hong Kong.
Registration	-	A company is incorporated by submitting the necessary documents and fee to the Registrar of Companies.
Ongoing compliance	-	A company must observe its statutory obligations under the Companies Ordinance and file annual returns, specified forms etc. within the prescribed time period on an ongoing basis.
Tax	-	Profits tax is payable on profits generated in Hong Kong. In Hong Kong, many items are tax deductible.

Process and cost of incorporating a private limited company

Investors may engage advisers to help with this process:

Step 1 - check whether the proposed company name has already been used by another company by conducting a name search at the Companies Registry's Cyber Search Centre on the internet (website : www.icris.cr.gov.hk) or at the Companies Registry's Public Search Centre on the 13th floor, Queensway Government Offices, 66 Queensway, Hong Kong.

Step 2 - submit the following to the Companies Registry:

• A copy of the company's Memorandum and Articles of Association certified as true by a founder member
• An "Incorporation Form" in a specified form (Form NC1 – for company limited by shares or Form NC1G – for company not limited by share)
• The prescribed fee of HK$1,720. Capital fee of HK$1 for every HK$1,000 of share capital up to a maximum of HK$30,000. If the application is unsuccessful, the registration fee of HK$1,425 and the capital fee may be refunded.

• Buy a company off the shelf ie a ready made company that is already incorporated. There are many agencies which provide this service. Shelf companies provide an immediate solution. However, if you are required to change the company name and specific provisions in the Company’s Memorandum and Articles of Association, it will take longer time.
• • Purchase an existing business. The acquiring enterprise can either buy the assets which make up the business or buy the shares of the company owning the assets. Although potentially complex to negotiate, buying a business is a quick way to meet the qualification criteria for companies to enjoy the preferential export terms to and market access in the Mainland afforded by the Closer Economic Partnership Arrangement (CEPA). For more click here.