Hong Kong
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City: Hong Kong
(SAR of China)
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Population: 7,400,000
(est. 2003)
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Languages: English/Cantonese
(official)
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Area: 1,042 sq.
km (land area)
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Currency: Hong Kong
dollar (HKD)
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Fiscal year: 1 April
- 31 March
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Independence status:
SAR of China (from U.K.)
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BACKGROUND
HONG KONG was occupied by the United Kingdom in 1841;
Hong Kong was formally ceded by China the following
year; various adjacent lands were added later in the
19th century. Pursuant to an Joint Declaration negotiated
& signed by China and the United Kingdom on 19 December
1984, Hong Kong became the Hong Kong Special Administrative
Region (HKSAR) of China on 1 July 1997. In this agreement,
China has promised that, under its "one country,
two systems" mechanism, Hong Kong will enjoy a
high degree of autonomy in all matters except foreign
and defense affairs for the next 50 years. Hong Kong
remains a free port with a free flow of capital and
a freely convertible Hong Kong. It is widely recognized
that Hong Kong is and will continue to be a significant
gateway to China.
Legal System
Hong Kong's legal system is based upon English Common
Law, with local modifications and with China Laws. Hong
Kong is having the Executive, legislative and independent
judicial power.
Currency
Hong Kong dollar ("HKD") is pegged to United
States dollars (USD) at a rate of more or less USD1
to HKD7.8 but book transactions with major currencies
like USD and Euro dollar (EUR) are common. As China
permits residents to visit Hong Kong with simplify procedures,
China Reminbi (RMB) is common used in retail or department
stores.
Confidentiality
Particulars of directors/shareholders and the company
capital structures are required to file and for public
inspection. Annual Return is required to file regularly.
For the confidentiality of shareholdings, company may
use nominee shareholders to hold shares on behalf.
Taxation
Hong Kong is employing a simple tax system and is said
to have a territorial system of taxation. Profits tax
is charged on every person carrying on a trade, profession
or busines in Hong Kong in respect of his/her assessable
profits arising in or derived from Hong Kong. The tax
rates are 17.5% (2003) for corporations and 16% (2003)
for unincorporations or individuals. Hong Kong, unlike
Singapore, does not tax foreign source income even if
repatriated back to Hong Kong. There is NO capital gain
tax NOR taxes on dividends to shareholders.
Legislations
A private limited company can have no more than 50 shareholders,
and cannot invite the general public to subscribe to
its share. A private company restricts the rights to
transfer shares. Unlike a public company, a private
company is not required to file a copy of its annual
accounts with the Registrar of Companies. From 13 February
2004, Hong Kong private limited company can be setup
by a minimum of ONE shareholder, ONE director and one
Company Secretary. Shareholder and director can be in
the same capacity. It is by law that the Registered
Office must be in Hong Kong and the Company Secretary
must be Hong Kong resident or Hong Kong corporation.
Every company is required to keep proper books at the
company's Registered Office or place of business in
Hong Kong. Every company must appoint the auditors who
must be members of the Hong Kong Institute of Certified
Public Accountants, "HKICPA"(formerly known
as the Hong Kong Society of Accountants, "HkSA")and
hold practicing certificates. Although there is no requirement
to file accounts with the Registrar, there is a requirement
to file accounts with the Tax Authority.
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