Hong Kong Company Incorporation Guide (1) - General Information

Location

Hong Kong is located in the South China Sea 100 miles south east of Guanzhou (formerly known as Canton). As of the 1 July 1997 under the Sino-British Agreement of December 1984 Hong Kong became a Special Administrative Region (HKSAR) of the People's Republic of China. The Basic Law, which is the Constitution of the HKSAR, is intended to maintain the HKSAR and the PRC as separate governmental, legal and economic systems. This is known as the "One Country, two Systems" concept. Hong Kong is governed by a Chief Executive and an Executive Council. Although there is a legislature, the administration is executive led and generally pro-business. Hong Kong is ranked the freest economy in the world.

Legal System and Taxation

The legal system of Hong Kong is based on English Common Law supplemented by locally enacted Ordinances. Hong Kong is guaranteed a high degree of autonomy from 1997. It is generally allowed to enact and enforce its own laws. The Hong Kong Companies Ordinance has many similarities to the British Companies Acts. There are an excellent range of professional services available as Hong Kong serves as the major business centre for the whole of the Far East. This is unlikely to change in the foreseeable future.

One of the major advantages of utilising a Hong Kong company is that there is no immediate suggestion that the company is a tax avoidance vehicle as Hong Kong is major trading entity in its own right. Hong Kong is one of the world's largest importer and also one of the world's largest exporter. The vast majority of the 50,000 Hong Kong companies incorporated annually are local trading companies doing real business in the region.

Language

The official languages are English and Chinese, with English being used in the commercial and political context and Cantonese Chinese used widely in industry and domestic trade.

Currency

The Hong Kong Dollar which is officially pegged to the US Dollar at USD1=HKD7.78

Exchange Control

None.

Type of Laws

Common Law based on English Common Law.

Principle Corporate Legislation

Hong Kong Companies Ordinance (Cap 32). Details can be viewed at the following link:
http://www.justice.gov.hk/Home.htm