Foreign investors may choose whether to start a new company or purchase a shelf company when expanding in another country. The decision must usually be made based on the legislation of the country. Hong Kong’ Companies Law offers investors the possibility of setting up new businesses or purchasing shelf companies. Our specialists in company formation in Hong Kong will provide all required information about the registration of a new company or the purchase of an already-registered company. Clients will also have the possibility to make a comparison between the two procedures and make the right decision.
The differences between a new company and a shelf company are summarized in this video:
Comparison between a shelf company and a new company in Hong Kong
The clear advantage in choosing to buy a shelf company in Hong Kong is the registration procedure that needs no longer take place. The shelf company also comes with a history, providing thus more credibility to its owner. In addition to this, the investor has the possibility to change its name, to appoint a new director and make other important changes. This ready-made company will also come with a bank account and VAT number. Perhaps the best advantage offered by a shelf company is the possibility to start trading right away.
The registration of a new company, however, also has its advantages. The first one would be the costs. It is less expensive to register a new company in Hong Kong than purchasing a shelf company. Another advantage of the new company is that the owner will select the name, the type of company to be registered and will also appoint the director from the beginning compared to the shelf company where all these must be changed. The founders, according to their preferences, will also choose the registered office address. One important aspect to keep in mind is that the shelf company will already have its Articles of Association. These will need to be amended to include all of the changes the buyer needs to make.
The registration procedure of a new company takes only a few days and our specialists in company incorporation in Hong Kong will draft the Articles of Association and other required documents and submit the registration file.
Features of shelf companies and new companies in Hong Kong
Shelf companies are pre-registered companies kept on a so-called “shelf”, left unused until they are sold. Shelf companies are registered with the purpose to be sold. When it comes to new companies, the owner will select from the beginning the type of company that will be registered, will appoint the director and provide relevant information about the company.
Investors who prefer buying a ready-made company will need to pay special attention to company due diligence. There are many offers for ready-made companies and various packages depending on the type of company and its shelf years. While the idea of a speedy and easy company purchase is appealing to many investors who want to start trading right away, entrepreneurs should only purchase ready-made companies from reliable providers and by paying close attention to the incorporation date and whether or not the company was used for trading before. The verification of the company will typically include a check-up of its incorporation documents. Our company registration agents in Hong Kong can help you with company due diligence and assistance in transferring the ownership of the shelf company.
Clients can contact our company formation staff in Hong Kong to find out the price of a shelf company and the registration fees to be paid when incorporating a new company.
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