By Vlad Cuc, specialist in company formation matters
The virtual office is a physical address and the optional office-related services based on a chosen subscription but without the need to buy or rent office space. When doing business in this manner, company owners and employees can work from another location and still have their business presence guaranteed in Hong Kong.
Foreign investors in Hong Kong have numerous business options when it comes to the type of company they can establish in Hong Kong as well as how they can base their newly incorporated company. The virtual office in Hong Kong is advantageous for small companies as well as start-ups, irrespective of the business field however, it can be a solution for any company. When investors set up a company in Hong Kong via a virtual office, they can benefit from many of the advantages of regular office space, with lower costs. Moreover, it will also maintain a professional business image.
Quick Facts
Best used for
Small and medium companies in Hong Kong
Advantages of a virtual office in Hong Kong
- flexibility; - access to office supplies and features; - lower costs compared to a traditional, rented office; - services on demand as per the virtual office in Hong Kong package, payable only as needed.
Registered address option
Yes
Location
Modern locations in Hong Kong Island, Kowloon and other locations
Coworking spaces
Yes
Individual offices
Yes. Different options and office sizes
Meeting rooms
Yes. Full-services
Connectivity
High-speed wireless internet
Facilities in Hong Kong
- address in Hong Kong; - mail and voicemail forwarding; - secretary, IT support and others.
Secretary services
Upon request, depending on the selected package
Local business telephone
Upon request, for certain virtual office in Hong Kong packages
Rent duration
Monthly options, in most cases
Special packages/plans
Different business solutions including access to meeting rooms and other types of office spaces
Approximate costs in Hong Kong
Starting at approx. HKD 700 per month
Change from traditional office to virtual office in Hong Kong
Yes, possible with our help. The new address is notified to the Companies Registry
The main advantages of the virtual office in Hong Kong are summarized below:
•Lower costs: the monthly or annual lease, as well as the subscriptions to the additional services, are lower when compared to renting an office space in Hong Kong or buying a property and then staffing and equipping it.
•Flexibility: the virtual office offers flexibility both for the employees and the business owners: they can work remote with no need to commute.
•Adequate business image: the image of the business does not lack anything when choosing to work via a virtual office.
•Complete services: most virtual office packages, including the one provided by our agents, include complete general services as well as various additional ones so the business will run smoothly and without any inconveniences.
Because of these particularities, the virtual office may be more suited to some types of businesses, compared to others. For example, when opening a manufacturing business, investors will still need to be concerned with setting up the actual area where the manufacturing process will take place. Our company formation representatives in Hong Kong are ready to offer you personalized advice if you want to open a virtual office in Hong Kong.
The virtual office package in Hong Kong
Our company has significant experience in offering company formation services and virtual office services. The virtual office package we can provide for you and your business contains:
1.Prestigious business address: the virtual office is located in an office building in Hong Kong for a credible and risk-free base for corresponding with clients;
3.Mail collection and forwarding: includes collecting and receiving mail and packages sent to your business at the virtual office address and the forwarding process that comes afterward.;
4.Incoming and outgoing faxes: your business can have access to our local fax number and our specialists will collect and send the faxes to you;
5.A local phone number in Victoria, Hong Kong: useful for direct calls from clients or business partners and for the general company details.
The virtual office package offered by opencompanyhongkong.comincludes all of these services as well as additional ones. The extra services can include the following:
-Dedicated fax service that will include a private fax number for your company;
-Cal redirecting:the calls you receive via the telephone number at the virtual office are redirected to your primary number; this is useful for many investors who set up a company in Hong Kong;
Investors who are interested in working via a virtual office in Hong Kong should note that some of the extra services that can be available to companies would need to be scheduled as needed. However, this is not an issue as most buildings in which virtual offices are based are modern ones, equipped with the necessary facilities as well as options for connectivity (investors will be able to rely on the local internet connection to set up virtual meetings, as needed).
We recommend verifying all of the facilities at a chosen virtual office location so that you will have a clear image of the facilities that are being offered, the usable space, the available options for extra meeting room space as well as the communications facilities. Some of the issues that can be included on the general checklist are internet accessibility and speed, the existence of meeting room projectors, whiteboards, audio equipment, video conferencing equipment, and extras such as coffee makers and others.
Having all of the needed facilities is important when choosing to work via a virtual office in Hong Kong. We recommend getting in touch with our local company formation agents for more information about the packages we offer for this purpose as well as general information about incorporation.
Company formation in Hong Kong is a simplified process that, nonetheless, requires a set of mandatory steps. Having a registered office is one of these and it is important to decide if this will be in the form of a virtual office (meaning that the address of the office will be used for incorporation purposes). One of our agents can help you make the necessary arrangements if this is the selected method of incorporation and can, later on, help you prepare the company’s constitutive documents as well as handle all of the remaining steps.
Requirements for companies in Hong Kong
Irrespective of whether or not they are run via a virtual office in Hong Kong, locally registered companies (as well as branches of foreign entities) will need to company with the latest tax and reporting laws. These refer to the accounting principles and the need to draw up the financial statements and also to the principles for corporate taxation.
Other requirements for companies may refer to liability, both that of the legal entity and that of the founders and company directors.
Being aware of these requirements is useful before setting up a company in Hong Kong.
Below, our team of Hong Kong company formation agents presents some of the most important issues regarding taxation and accounting:
-the corporate income tax rate is a two-tier one, meaning that it applies at 8.25% on the first 2 million HKD of assessable profits and then at 16.5% on the remaining value; smaller two-tier rates apply to unincorporated businesses;
-dividends that are paid from profits that have been subject to taxation in Hong Kong are not taxable; dividends received by foreign companies are not taxed because they are considered income from a foreign source;
-there is no value-added tax nor a sales tax in Hong Kong;
-the employer and the employee are required to make social security contributions;
-property tax has a standard rate of 15% of the net assessable property value;
- most companies will use a tax year that coincides with the calendar year;
the profits tax returns are to be filled and submitted within one month after they are issued (they are issued by the Inland Revenue Department on April 1st in most cases);
-Hong Kong has signed more than 40 double taxation agreements and for this purpose, a company is a resident when it is incorporated in this jurisdiction or when it is incorporated outside of Hong Kong but it is managed and controlled from the Special Administrative Region.
Our agents invite you to watch a short video about virtual offices in Hong Kong:
Virtual office according to the type of company in Hong Kong
A virtual office packages can be useful for many types of businesses. In most cases, the type of the company is not a criterion on whether or not this means of running the business will be suitable, rather it is important to decide if the types of services that are being offered can be adapted to work in this manner, if remote work, as opposed to having an ongoing office presence, is an option for the business model.
A virtual office in Hong Kong can be a suitable option both for a partnership and a limited liability company, if the business is one that can be structured in this manner. In general, companies that offer services that are not location-dependent are the ones to benefit the most from using this option. For example, freelancers can benefit greatly from working from a virtual office if they do not wish to make their home address public. Moreover, the professional look of the office, and any other extra services that may be included in the package, will help the entrepreneur or its start-up create a good and professional business image from the very beginning.
Understandably, the virtual office is more suited to small or medium businesses or sole traders in Hong Kong (although this business form that can be preferred by entrepreneurs who run their own business has the greatest level of liability). A medium-sized company can still function very well using a virtual office, especially if part of the team does not need to be present in the office at all times (for example, an IT company can have a virtual office at a Hong Kong address while all or part of the programming team works remote).
A virtual office in Hong Kong can be useful for: freelancers, entrepreneurs, start-up companies, partnerships between two or more professionals (such as accountants or lawyers) and even for companies that wish to expand to Hong Kong (scale-up) but to not have the resources for a permanent, fixed and traditional office space. For the latter, the virtual office is a suitable solution that will allow them to open a company in Hong Kong (or a branch) and establish their presence in the Special Administrative Region. This allows a foreign company to be present on the market for local clients, without having to set up a new location, or a store that will allow them to expand.
Finding the suitable manner in which the business can be successfully run from a virtual office is an important management decision on the part of the company founders. When needed, the proper package for a virtual office in Hong Kong does allow for extra office or meeting room space, meaning that small or medium companies can indeed cut expenses and direct them towards marketing, research or the general development of the business, as needed in their field.
As far as choosing the right type of company is concerned, our team of agents who specialize in company formation in Hong Kong can provide you with important information about each business form, its incorporation requirements and the subsequent accounting and reporting requirements that will apply.
The private limited liability company is the preferred business form in the Special Administrative Region given the fact that is combines an easy and fast registration with low requirements and limited liability for the founders. This means that the shareholders are only liable up to the extent of the capital they have invested in the company and they are not liable with their own assets, as it would be the case for a sole trader or a general partnership (as well as the one acting as general partner in a limited partnership). Moreover, the limited liability company is suitable for both small and medium-sized companies – both of which can easily manage their business from a virtual office if the type of activity allows for this manner of work. Investors should keep in mind that apart from following the steps for registration and the ones for acquiring the virtual office package, they will also need to apply for special permits and licenses.
Doing business in Hong Kong
Hong Kong has an open policy towards foreign investment and allows for full foreign ownership in case of company formation. There is no specific investment approval policy for business projects, however, investors are expected to observe the basic laws as well as comply with the requirements set forth in the Companies Ordinance.
When you choose our incorporation services, our company incorporation agents in Hong Kong will make sure that your business runs smoothly and that all of the legal requirements are taken care of. This refers not only to the actual regulations for registering the company with the Companies Registry but also to those that are needed for tax and annual accounting and reporting.
According to data from the Registry, there were 7,931 companies incorporated in Hong Kong at the start of the year (January 2020). This number, as well as its evolution in the first quarter of the year, can be summarized as follows:
-there were 7,829 private companies, 96 guarantee companies, and 6 public companies in January 2020;
-February saw an increase in the number of guarantee companies, 23, with a total number of companies incorporated of 4,627;
-In March there were 8,424 private companies and 73 guarantee companies, with a total number of companies incorporated of 8,514.
The Registry also informs that there were 267,268 documents delivered for the registration of companies in March 2020.
The number of private companies remains high in Hong Kong, as this is the preferred business form, in the case of local and foreign investors alike. A virtual office is a suitable option for this type of company because the business form is suited to small or medium-sized operations, unlike the public company, which is suited to large corporations.
If you are an entrepreneur in Hong Kong, the virtual office can be a suitable option if you run a small company, an online business, if you have just opened a start-up or are interested in a scale-up. The overhead expense in a business will naturally differ according to field, size and many other criterion, however, the virtual office is a suitable solutions for all company owners who wish to save on these types of expenses.
As work-from-home becomes more popular, and the number of employees and professionals who work in this manner increases, industries are looking for new ways to become more flexible and many will avoid entering into a lease agreement for an office space when the virtual office is a more suitable option.
Once investors set up a company in Hong Kong that operates via a virtual office, they can request the services provided by our accountants in Hong Kong. Our team will assist with the preparation of the annual financial statements and their submission for companies that are subject to this requirement. We also offer solutions for compliance with tax filing and payment.
If you are a business owner who is interested in knowing more about how the virtual office can be used to incorporate, and how this option can be adapted in your case, our Hong Kong company formation consultants can help you with detailed information about company registration in Hong Kong and company management in Hong Kong. Please contact our Hong Kong company incorporation specialists if you have any questions.
Roger Pay is the Managing Director of our company and an experienced company incorporation specialist. He will help you open your company in Hong Kong as fast as possible.
Call us now at+852 35651861to set up an appointment with our company formation experts in Hong Kong. As our client, you will benefit from the joint expertise of local lawyers and consultants for opening an offshore company in Hong Kong.
We offer:
- prompt response to your inquiry (maxim 24 hours);
- cost-efficiency: competitive company formation prices;
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I would definitely recommend the team of company formation experts at OpenCompanyHongKong.com to every foreign businessman that wants to establish a business here. Quick responses and excellent personalized approach to clients!