The benefits of incorporating a private limited company in Hong Kong
One of the main advantages of starting a private limited company in Hong is its favorable taxation rate. The profits tax for a private limited company in Hong Kong is taxed at a 16.5% rate. Besides, the taxation system is territorial which implies that those gains that are derived from the outside of Hong Kong territories are not taxed.
Ease of start-up
Unlike the public limited companies, private limited companies in Hong Kong are easy to set up and has lesser requirements than public limited companies. Besides, the private limited companies are set within one to two working days. However, the pre-registered companies are available for immediate use, and the fact that it does not have a lot of regulations make it more preferred to the investors than the public limited companies.
It has a distinct legal entity
A private limited company is a separate legal entity. That means that it can acquire assets, enter new contracts, it can go into debts, and makes legal agreements using the name of the company. Therefore, a private limited company in Hong Kong is a separate legal entity from the owners and shareholders.
Ability to raise additional capital
Although it might not be as much as it is with the public limited companies, the private limited companies can equally raise additional capital if they need it for whatever reasons. Private limited companies are well recognized by both investors and banks that can easily inject more capital into the business. Besides, they can bring in new shareholders or even issue more shares to the already existing shareholders.
Since a private limited company is a separate legal entity, a company will have a going concern if it has a good standing will. Besides, changes can be made to a private limited company without necessarily interfering with its operations. In certain cases, taxation and other expenses may be affected by selling all or part of the company shares.
Private limited companies allow for ownership transfer
Transferring the ownership of a private limited company from one person to the next is simpler. The ownership of a private limited company can either be partially or fully transferred from one person to another either by selling part or all the company’s shares. It can also be done by issuing new shares to a new shareholder.