How to Register a Hong Kong Subsidiary?

6 min read|Last Updated: June 20, 2022|

Registering a Hong Kong Subsidiary

Registering a subsidiary company will take you a longer period than setting either a branch office or a representative office in Hong Kong. However, it will grant you tax benefits and better trade deals and opportunities compared to the other two available options.

The process of incorporating a subsidiary company in Hong Kong starts with preparing a signed and completed application form. The other documents that you will require when incorporating a subsidiary company in Hong Kong include:

  • Incorporation documents
  • The memorandum of your parent company
  • The parent’s company articles of association
  • The incorporation certificate of your parent company
  • Identification documents
  • Bank letters belonging to those serving as your company’s officers.

Further, incorporating a subsidiary in Hong Kong requires you to pay registration and a capital fee upfront awaiting the certificate of incorporation. Besides, for you to obtain a business registration certificate, you will be required to register with the Inland Revenue Department (IRD). Other additional licensing might be required before starting the operations of the subsidiary company in Hong Kong depending on the industry that the intended business lies.

Additional requirements for setting up a subsidiary in Hong Kong?

The other requirements that you will have to meet when setting up a Hong Kong company include:

  • At least one director for your company
  • A company secretary
  • The subsidiary must have an appointed auditor who should be a member of the Hong Kong Society of Accountants and he or she must have a practicing certificate.
  • At least one shareholder but no more than 50 shareholders.

Steps to register a subsidiary company in Hong Kong?

A subsidiary company in Hong Kong is set up in these 4 simple steps.

1. Choose the type of company

A subsidiary is not the same as the parent company. The person who is setting up a subsidiary should choose the type of business. However, a subsidiary is often set up as a private limited company. You will then proceed to choose the name of the business or decide to retain the parent name. Nonetheless, in either case, the chooses name must be approved by the Hong Kong Companies Registry.

A name search of a company should first be conducted and the name must meet all the required company naming processes in Hong Kong. When you are choosing a name for your Hong Kong business, you can either use an English name, a Chinese name, or both.

2. File Articles of Incorporation

The incorporation of a Hong Kong company is made with the Companies Registries (CR). When registering a limited company, you may choose to deliver the following documents via the online platform, e-Registry. The documents include:

  • Incorporation Form: this is often done by the companies that are limited by shares.
  • A copy of the company’s Articles of Association
  • Issue a notice to the business registration office

Once you obtain the incorporation certificate, you should then visit the Trade and Industry Department for other relevant permits and licenses that will depend on the industry within which your company lies.

3. Application for the business registration certificate

The third step during the incorporation process is to register with the business registration office of the IRD. The process is often done together with the company incorporation. If it was not done during incorporation, then it must be done within the first month of the business operation at the Hong Kong Companies Register by submitting a notice to the Business Registration Office.

4. Open a corporate Bank Account

The process of opening a corporate bank account in Hong Kong is simple and required minimal paperwork. Depending on the type of bank that you choose to have an account with, you will be required to show the proof of residence plus additional documents as per the bank requirements.

steps to register a subsidiary company in Hong Kong

What are some of the existing laws that govern the Hong Kong subsidiary?

Subsidiaries operate in Hong Kong as private limited companies and thus are treated as separate legal entities from their parent companies. Therefore, when you are thinking of incorporating a subsidiary company in Hong Kong then you should know that your parent company will not be liable for anything that a subsidiary company engages itself.

That implies that your Hong Kong subsidiary company will operate under completely different managerial aspects from the parent company and the management must be in-line with the required Hong Kong laws of the Company’s Registry.

Besides, the subsidiary company will have its independent accounts, transactions, litigation, and or incur all the losses or enjoy the benefits thereof. The subsidiary company that you are incorporating in Hong Kong can either use the parent name or you can choose to use a different name. In either case, the name you settle on must be approved by the Companies Registries of Hong Kong.

What are the benefits of a Hong Kong Subsidiary Setup?

As mentioned earlier, the subsidiary company in Hong Kong operates as a private limited liability company. Therefore, you will enjoy several benefits just as other companies in addition to the benefits that come with doing business in Hong Kong’s environment. Some of the benefits include:

  • Incredible Flexibility: The subsidiary is an independent entity and thus its activities are not tied to those of the parent company. Therefore, it has the freedom to perform the business activities as the parent and include others if necessary.
  • Simple and low taxation rates: As mentioned earlier , a subsidiary operates as a private limited company and thus its taxation rate is the same; the corporate taxation rates of a Hong Kong subsidiary is 16.5%.
  • Independence: The most essential part of forming a subsidiary company in Hong Kong is the fact that it is independent of the parent company abroad.
  • Limited liability: A Hong Kong subsidiary has a limited liability which implies that both the founders and the parent company have a limited liability of the obligations and the debts that have been incurred by the subsidiary company.
  • Distinct management: The management of the subsidiary is distinct from that of the parent company; the Hong Kong subsidiary is expected to handle and manage all its accounts and bookkeeping including transactions independently

In summary, the expansion of a foreign company to Hong Kong is that simple and straight forward. As mentioned earlier, you will have the option of expanding to Hong Kong through setting a branch office, having a representative office, or incorporating a registered subsidiary company. All these are good, but a subsidiary company is advantageous since it can operate as a separate entity from the parent foreign company.

How to Register a Hong Kong Subsidiary? FAQs

What are some of the major drawbacks to having a subsidiary company?2020-12-29T04:33:53+00:00

The major disadvantage of a subsidiary company is the fact that it will be required to operate as a separate legal entity. That is disadvantageous since the parent company managers might not be able to make major decisions whether they concern the products, finance, among other significant issues.

What are the benefits of a subsidiary company in Hong Kong2020-12-29T04:33:29+00:00

There are several benefits that a subsidiary company have, and they include:

  • Flexibility: this implies that a subsidiary company will not have to operate under the parent company and thus will choose the range of products it deals in on its own.
  • Separate entity: It can sue, be sued, and the parent company is not held liable for any debts that the subsidiary company runs into.
  • Taxation: since it is incorporated in Hong Kong as a private company it will enjoy the normal lower corporate tax rate of 16.5%.
How do I incorporate a subsidiary company in Hong Kong?2021-06-10T16:46:37+00:00

If you want to set up a subsidiary company in Hong Kong, then you need to follow 4 simple steps:

  • Initiate the incorporation process by a qualified incorporation agency like Paul Hype Page.
  • Choose the business entity that you would like your new company to operate under.
  • You will be expected to draft the company’s formation document as required by Hong Kong law.
  • Present and file all the required documents and submit the fees for the process to proceed.
  • Finally, apply for the business licensing and relevant permits according to the industry that your company lies.
What is a subsidiary company in Hong Kong?2020-12-29T04:31:06+00:00

A subsidiary company is an extension of a foreign company into the Hong Kong territories. Though it operates as an independent company from the parent company, it will still have connections to the parent company like controlling the stock.

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