Company Registration in Hong Kong for IT business (Part 2). Let's talk about the director
The more doubtful the office, the more general the director (s) folk humor
At the request of the readers of the LAWBOOT Lawyers & Consultants blog , we continue to develop the topic related to the registration of the company in Hong Kong (aka Hong Kong) , launched in early 2015.
')
Based on the title of the article we will focus on the director of the company. We decided to make an article in the form of a FAQ. The first few questions are quite easy, and the answer to them can be found quickly by “googling”. The questions regarding the salary and responsibility of the director, the withdrawal of money under the service agreement or loan agreement are quite unique, and we hope that they will be useful for you.
Who can be the director of a company in Hong Kong?
The director of a company can be a natural person who has reached the age of 18, or a legal entity (company). A director may be of any nationality, as well as be a tax resident of any state (i.e. may not be a citizen of Hong Kong)
Can the director be a shareholder of the company?
Yes, the director may be a shareholder.
What is the minimum and maximum number of company directors in Hong Kong?
The minimum number is 1, and the maximum is not set.
Does the director need to pay a salary
The first option: the director of the company in Hong Kong may have the status of employee (employed employee) and receive a salary for their work. In this case, the director will be required to obtain the necessary permits for employment in Hong Kong, a visa, etc.
At the same time, the company is obliged to pay wages and submit reports in accordance with the domestic laws of Hong Kong
The second option: the director does not have the status of employee, and does not receive a salary. This is completely legitimate, although for residents of the CIS accustomed to our local law, it looks suspicious.
This is the last option we recommend to our customers.
What is the responsibility of the director of a company registered in Hong Kong
The Companies Registry registration authority specifies the main 11 rules that the director should follow, but the rules are more of an advisory nature, for example: avoiding conflict of personal interests and interests of the company, acting in good faith in the interests of the company, the obligation to keep records, no abuse of office, etc. .
For violation of one of the rules, the director is facing a civil lawsuit from the company and a fine imposed by the state regulator. However, the company may reimburse the director’s losses incurred as a result of non-compliance with its obligations.
The most common question concerns liability for failure to file company financial reports. If statements were filed out of time, the maximum possible penalty for this is HK $ 50,000 (about $ 6,500) and a daily fine of HK $ 700 (equivalent to $ 90).
For violation of legislation related to money laundering, sponsoring terrorism, etc. - The director may incur criminal liability.
Can I use the services of a nominal 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 companies of Hong Kong. Contracts are usually signed on the basis of a power of attorney.
Can the director of the Hong Kong company sign a contract with him as an individual?
For the most part, it all depends on the specific contract. If this person is an independent contractor of a company, he can sign an agreement with her, being at the same time a director of this company. At the same time, the company has the right (I will say more - it is obliged) to pay the services of an independent contractor quite legally, stipulated 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 registration of the company, can be ordered from us.
A very common option in practice is to register a company in Hong Kong with the opening of a corporate account in the Baltic States (for example, Latvia).
Then the director (who in 99% of cases is a shareholder of the company) opens a personal account in the same bank (for the most effective reduction of transaction costs).
Having a personal account, the director concludes on behalf of the company with himself (as an individual) an agreement on the provision of services. Payment of fees for services made from the company's bank account to a personal account. After receiving money on 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, by the way, are not taxable in Hong Kong.
In the next article about Hong Kong, we will talk about the organization of effective work between your company in Hong Kong and counterparties from the United States, Canada and Europe.
Subscribe, there are many interesting things ahead!
By the way, you can get a free consultation on registering a company in Hong Kong , opening a bank account, or order writing a contract here .
At the request of the readers of the LAWBOOT Lawyers & Consultants blog , we continue to develop the topic related to the registration of the company in Hong Kong (aka Hong Kong) , launched in early 2015.
')
Based on the title of the article we will focus on the director of the company. We decided to make an article in the form of a FAQ. The first few questions are quite easy, and the answer to them can be found quickly by “googling”. The questions regarding the salary and responsibility of the director, the withdrawal of money under the service agreement or loan agreement are quite unique, and we hope that they will be useful for you.
Who can be the director of a company in Hong Kong?
The director of a company can be a natural person who has reached the age of 18, or a legal entity (company). A director may be of any nationality, as well as be a tax resident of any state (i.e. may not be a citizen of Hong Kong)
Can the director be a shareholder of the company?
Yes, the director may be a shareholder.
What is the minimum and maximum number of company directors in Hong Kong?
The minimum number is 1, and the maximum is not set.
Does the director need to pay a salary
The first option: the director of the company in Hong Kong may have the status of employee (employed employee) and receive a salary for their work. In this case, the director will be required to obtain the necessary permits for employment in Hong Kong, a visa, etc.
At the same time, the company is obliged to pay wages and submit reports in accordance with the domestic laws of Hong Kong
The second option: the director does not have the status of employee, and does not receive a salary. This is completely legitimate, although for residents of the CIS accustomed to our local law, it looks suspicious.
This is the last option we recommend to our customers.
What is the responsibility of the director of a company registered in Hong Kong
The Companies Registry registration authority specifies the main 11 rules that the director should follow, but the rules are more of an advisory nature, for example: avoiding conflict of personal interests and interests of the company, acting in good faith in the interests of the company, the obligation to keep records, no abuse of office, etc. .
For violation of one of the rules, the director is facing a civil lawsuit from the company and a fine imposed by the state regulator. However, the company may reimburse the director’s losses incurred as a result of non-compliance with its obligations.
The most common question concerns liability for failure to file company financial reports. If statements were filed out of time, the maximum possible penalty for this is HK $ 50,000 (about $ 6,500) and a daily fine of HK $ 700 (equivalent to $ 90).
For violation of legislation related to money laundering, sponsoring terrorism, etc. - The director may incur criminal liability.
Can I use the services of a nominal 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 companies of Hong Kong. Contracts are usually signed on the basis of a power of attorney.
Can the director of the Hong Kong company sign a contract with him as an individual?
For the most part, it all depends on the specific contract. If this person is an independent contractor of a company, he can sign an agreement with her, being at the same time a director of this company. At the same time, the company has the right (I will say more - it is obliged) to pay the services of an independent contractor quite legally, stipulated 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 registration of the company, can be ordered from us.
A very common option in practice is to register a company in Hong Kong with the opening of a corporate account in the Baltic States (for example, Latvia).
Then the director (who in 99% of cases is a shareholder of the company) opens a personal account in the same bank (for the most effective reduction of transaction costs).
Having a personal account, the director concludes on behalf of the company with himself (as an individual) an agreement on the provision of services. Payment of fees for services made from the company's bank account to a personal account. After receiving money on 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, by the way, are not taxable in Hong Kong.
In the next article about Hong Kong, we will talk about the organization of effective work between your company in Hong Kong and counterparties from the United States, Canada and Europe.
Subscribe, there are many interesting things ahead!
By the way, you can get a free consultation on registering a company in Hong Kong , opening a bank account, or order writing a contract here .
Source: https://habr.com/ru/post/298378/
All Articles