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Select the following topics you are interested:

Summary of Statutory Requirements for Hong Kong Companies
1. Director, Shareholder and Secretary
2. Share Capital
3. Annual Return
4. Audit Requirement
5.
Business Registration Certificate

Summary of Tax System in Hong Kong
1. Inland Revenue Ordinance
2. Stamp Duty Ordinance
3. Estate Duty Ordinance
4. Tax allowances

Employment




Summary of Statutory Requirements for Hong Kong Companies

1. Director, Shareholder and Secretary

Private companies must have at least one director and one shareholder who may be either individual or company. Public companies (or private companies in a public group) must have individuals as directors. All companies must have a secretary who is a resident of Hong Kong if the secretary is an individual, or have its place of business in Hong Kong if the secretary is a body corporate.

2. Share Capital(Go back)

There are no minimum capital requirements. Authorized share capital bears capital duty at a rate of 0. 1% payable on company formation and on any subsequent increases.

3. Annual Return (Go back)

Every Hong Kong companies shall in each year hold an Annual General Meeting, and a private company having a share capital shall file with the Registrar of Companies an annual return within 42 days after the most recent anniversary of the date of incorporation of the Company.

4. Audit Requirement (Go back)

Every Hong Kong company must have an annual audit performed by qualified independent auditor. The Inland Revenue Department will request audited accounts for the purpose of assessing the Company's liability to Hong Kong taxation.

5. Business Registration Certificate (Go back)

All companies carry on business in Hong Kong are required to obtain a Business Registration Certificate from the Inland Revenue Department, and the certificate is required to be renewed each year at an annual fee of HK$2,600.

For further information relating to Hong Kong Companies Ordinance, please go to Registrar of Companies.

Summary of Tax System in Hong Kong

Taxation in Hong Kong is based on the "territorial" concept, and it is only income with a Hong Kong source which, by and large, is subject to tax. The three main pieces of revenue legislation in Hong Kong are:

* the Inland Revenue Ordinance
* the Stamp Duty Ordinance
* the Estate Duty Ordinance

1. Inland Revenue Ordinance (Go back)

There are three distinct headings under which tax is levied:-

a) Property Tax
Property tax is levied on the owners of real estate which is situated in Hong Kong at the standard rate. The assessable value is the total consideration payable to the owner for the right to use the property. Companies are exempt being liable to Profits Tax on any such income.

b) Salaries Tax
Individuals are charged to salaries tax on any income with a Hong Kong source which has been obtained from an office, employment or pension. Only income arising from within Hong Kong is taxable. In certain situations, no tax is levied on remuneration for services performed outside Hong Kong. Even though services are rendered in Hong Kong, an employee may not be subject to salaries tax if the period spent in the territory does not exceed a total of 60 days during each year of assessment.

Salaries tax is determined on a sliding scale according to the taxpayers' "net chargeable income".

c) Profits Tax
Individuals, corporations, partnership and all unincorporated business ventures carrying on a business in Hong Kong are subject to profits tax on profits which are generated from sources within the territory. Profits tax is levied only on "revenue profits" and not income of a capital nature. There is no capital gains tax. Only profits which arise in Hong Kong, or are derived from a Hong Kong source, are subject to profits tax.

For more information on Inland Revenue Ordinance, please go to IRD.

2. Stamp Duty Ordinance (Go back)

Stamp duty applies to documents evidencing transactions which involve immovable property, stocks or shares. Some instruments attract a fixed amount of duty per instrument while others are subject to ad valorem duty. Instruments which are chargeable with stamp duty are:-

* instruments for the conveyance or lease of immovable property in Hong Kong
* agreements for sale of immovable residential property in Hong Kong
* instruments for the sale, purchase or other transfer of Hong Kong stock
* Hong Kong bearer instruments; and
* duplicates and counterparts

3. Estate Duty Ordinance (Go back)

Estate duty is a duty, or tax, on property which is located in Hong Kong and which passes on the death of an individual. It is the fact that the deceased's property is situated in Hong Kong which give rise to the liability for estate duty. The duty is leviable whether or not the deceased was domiciled in Hong Kong or was a national or resident of Hong Kong. Estate Duty has been abolished since February 2006.

Revenue (Abolition of Estate Duty) Ordinance 2005

The Revenue (Abolition of Estate Duty) Ordinance 2005 ["the Ordinance"] comes into effect on 11 February 2006. No estate duty affidavits and accounts need to be filed and no estate duty clearance papers are needed for the application for a grant of representation in respect of deaths occurring on or after that date. The estate duty chargeable in respect of estates of persons dying on or after 15 July 2005 and before 11 February 2006 ("transitional estates") with the principal value exceeding $7.5 million will be reduced to a nominal amount of $100.

(Go back)

4. Tax allowances (Go back)

Year of Assessment 2008/092007/08 2006/072005/06
HK$HK$HK$HK$
Basic allowance 108,000100,000100,000100,000
Married person's allowance 216,000200,000200,000200,000
Child allowance
  For the 1st and 2nd child (For each qualified child)    50,00050,00040,00040,000
  For the 3rd to 9th child (For each qualified child) 50,00050,00040,00040,000
  Additional for each child born in the year 50,00050,000NANA
Dependent parent allowance, each
  basic 55-59 15,00015,00015,00015,000
  basic >=60 30,00030,00030,00030,000
  additional 55-59 15,00015,00015,00015,000
  additional >=60 30,00030,00030,00030,000
Dependent grandparent allowance, each
  basic 55-59 15,00015,00015,00015,000
  basic >=60 30,00030,00030,00030,000
  additional 55-59 15,00015,00015,00015,000
  additional >=60 30,00030,00030,00030,000
Single parent allowance 108,000100,000100,000100,000
Disabled dependent allowance 60,00060,00060,00060,000
Dependent brother/sister 30,00030,00030,00030,000
Education allowance 60,00060,00040,00040,000
Home mortgage interest 100,000100,000100,000100,000
10 years10 years10 years7 years
Elderly residential care expenses 60,00060,00060,00060,000
Contribution to retirement schemes 12,00012,00012,00012,000

Notes to Allowances:

Single Parent Allowance
A Single Parent Allowance is granted if an individual had at any time during the year of assessment the sole or predominant care of a child in respect of whom the individual was entitle during the year of assessment to claim a Child Allowance. The allowance is not due if the individual was married and not living apart from his/her spouse at any time during the year. No Single Parent Allowance is allowable in respect of any second or subsequent child.

Disabled Dependant Allowance
A Disabled Dependant Allowance is granted if an individual is maintaining a dependant who is eligible to claim an allowance under the Government Disability Allowance Scheme. This allowance is granted in addition to any allowance already being claimed.

Dependent Brother or Dependent Sister Allowance
Commencing from the year of assessment 1996/97, a Dependent Brother or Dependent Sister Allowance is granted if an individual or his/her spouse maintains an unmarried brother/sister of his/her own or of his/her spouse and the person so maintained at any time in the year of assessment was -
(a)under the age of 18 years;
(b)of or over the age of 18 years but under the age of 25 years and was receiving full time education at a university, college, school or other similar educational establishment; or
(c)of or over the age of 18 years and was, by reason of physical or mental disablility, incapacitated for work.
A Dependent Brother or Dependent Sister allowance may be granted for each brother/sister maintained. A brother/sister is only treated as maintained by the person or by the spouse of the person if, at any time during the year, the person or the spouse had sole or predominant care of the brother/sister. A Dependent Brother or Dependent Sister Allowance and a Child Allowance shall not both be given in any year of assessment in respect of the same dependent person.



Employment (Go back)

The work force of Hong Kong is perhaps its greatest asset. The Employment Ordinance provides a framework to govern the terms and conditions of employment. There is no statutory minimum wage.




For further information, please call CNFC Mrs. Iris Ng at 25224909 or e-mail to us on client_service@cnfc.com.hk