Registration of a company in Hong Kong for IT business (Part 2). Let's talk about the director

    The more doubtful the office, the more general director (s) folk humor



    At the request of readers of the LAWBOOT Lawyers & Consultants Blog , we continue to develop the topic related to the registration of a company in Hong Kong (aka Hong Kong) , which began in early 2015.

    Based on the title of the article, we will talk about the director of the company. We decided to issue the article in the form of a FAQ. The first few questions are quite easy, and the answer to them can be found quickly by "google". Questions regarding the director’s salary and responsibility, money withdrawal under a service agreement or loan agreement are quite unique, and we hope will be useful to you.


    Who can be the director of a company in Hong Kong?

    The director of the company can be an individual who has reached the age of 18, or a legal entity (company). The director can be of any nationality, as well as be a tax resident of any state (i.e., may not be a Hong Kong citizen).

    Can the director be a shareholder of the company?

    Yes, a director can be a shareholder.

    What is the minimum and maximum number of company directors in Hong Kong?

    The minimum quantity is 1, but the maximum is not set.

    Do I need to pay the director wages?

    The first option: the director of a company in Hong Kong can have the status of employee (employed employee) and receive a salary for his work. In this case, the director will be required to obtain the necessary work permits in Hong Kong, visa, etc.
    At the same time, the company is obliged to pay wages and submit reports in accordance with the internal laws of Hong Kong.

    Second option: the director does not have employee status, and does not receive a salary. This is completely legal, although for CIS residents accustomed to our local law - it looks suspicious.

    It is the latter option that we recommend to our customers.

    What is the responsibility of the director of a company registered in Hong Kong The

    registration authority of The Companies Registry indicates the basic 11 rules that the director should follow, but the rules are rather advisory in nature, for example: to avoid a conflict of personal interests and interests of the company, to act in good faith in the interests of the company, the obligation to keep records, absence abuse of office, etc.

    For violation of one of the rules, the director faces a civil lawsuit from the company and a fine issued by the state regulator. However, the company may compensate the director for losses resulting from non-compliance with its obligations.

    The most common question concerns liability for failure to submit financial statements to a company. If the statements were filed late, the maximum possible fine for this is HK $ 50,000 (somewhere around 6,500 US dollars) and a daily fine of HK $ 700 (equivalent to 90 US dollars).

    For violation of the law related to money laundering, sponsorship of terrorism, etc. - The director may be held criminally liable.

    Can I use the services of a nominee Director?

    Yes, it is quite real. The nominee director is not responsible for the activities of the company, but only appears in the official register of HongKong companies. Contracts are usually signed on the basis of a power of attorney.

    Can a HongKong director sign a contract with herself, as an individual?

    For the most part, it all depends on the specific contract. If this person is an independent contractor of the company, he can sign an agreement with her, being simultaneously the director of this company. At the same time, the company has the right (I will say more - I am obliged) to legally pay for the services of an independent contractor, legally prescribed in the contract.
    It is also possible to sign a loan agreement.

    In any case, it all depends on the text of the contract, which together with the company registration can be ordered from us.

    A very common option is to register a company in Hong Kong with the opening of a corporate account in the Baltic states (for example, Latvia).
    After which the director (who is a shareholder of the company in 99% of cases) opens a personal account in the same bank (for the most effective reduction of transaction costs).
    Having a personal account, the director enters into an agreement on the provision of services with himself (as an individual) on behalf of the company. Payment of a fee for services is made from the bank account of the company to a personal account. After receipt of money in a personal account, they can be freely disposed of.

    Similarly with a loan agreement, but this option involves the return of funds back to the company, for example, after 50 years =)

    A personal account can also be used to distribute dividends between the founders of companies, which, incidentally, are not taxed in Hong Kong.
    In the next article about Hong Kong, we will talk about organizing effective work between your company in Hong Kong and contractors from the USA, Canada and Europe.

    Subscribe, there is a lot of interesting things ahead!

    By the way, you can get a free consultation on registering a company in Hong Kong , opening a bank account or ordering a contract to be written here .

    Only registered users can participate in the survey. Please come in.

    Do you use a foreign company (registered outside the CIS) in your business

    • 7.6% Yes, I use such a company 3
    • 2.5% Yes, I use a company registered in Hong Kong 1
    • 20.5% No, I do not use such a company 8
    • 56.4% No, but I want to start using such a company 22
    • 12.8% No, but I want to register a company in Hong Kong 5

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