| name | t1k:hk-corp |
| description | Hong Kong private company operations guide — Companies Ordinance (Cap. 622), no-par-value share system, two-tier profits tax (8.25% first HK$2M, 16.5% above), territorial taxation + offshore claim, annual NAR1 filing (42-day rule), Business Registration renewal, audited accounts (mandatory all sizes), no-treaty-with-Vietnam exceptions, share allotment process, HK-Vietnam DTA. Written for foreign founders running a HK Ltd. |
| keywords | ["hong kong company","hong kong private limited","hk ltd","cap 622","companies ordinance hk","hkco","profits tax hong kong","hk ird","inland revenue department hk","offshore claim hk","dipn 21","nar1","annual return hk","business registration hk","br renewal","hk audited accounts","hk corp secretary","glac","tricor","boardroom","hk-vietnam dta","hk vietnam tax treaty","no par value","share allotment hk","nsc1","scr significant controllers register hong kong"] |
| argument-hint | [topic: incorporation | profits-tax | nar1 | offshore-claim | share-allotment | cross-border] |
| effort | medium |
| version | 0.3.2 |
| origin | theonekit-core |
| repository | The1Studio/theonekit-core |
| module | t1k-legal |
| protected | true |
Hong Kong Private Company Operations
Knowledge-base skill for incorporating + operating a Hong Kong private company limited by shares — particularly for foreign founders (e.g., Vietnamese citizens) using HK as their operating company HQ. Critical advantages: territorial taxation, no FX controls, HK-Vietnam DTA.
Skill Scope
IS: Framework + methodology for HK Cap. 622 compliance, profits tax planning, annual filings, corp-sec engagement, cross-border structuring with US/Vietnam.
IS NOT: Substitute for HK-licensed corporate counsel, company secretary, or CPA. Final filings and audits must be by HK-licensed professionals.
When to activate
| User asks about… | Primary reference |
|---|
| "HK incorporation", "Cap 622", "private company limited" | references/hk-corp-essentials.md § Companies Ordinance |
| "HK profits tax", "8.25%", "two-tier tax rate" | references/hk-corp-essentials.md § Tax |
| "offshore claim", "non-HK sourced profits", "DIPN 21" | references/hk-corp-essentials.md § Offshore claim |
| "annual return HK", "NAR1", "42-day rule" | references/hk-corp-essentials.md § Annual compliance |
| "share allotment HK", "NSC1", "issuing new shares" | references/hk-corp-essentials.md § Share allotment |
| "HK-Vietnam tax treaty", "HK-VN DTA" | references/hk-corp-essentials.md § Cross-border |
| "GLAC", "Tricor", "company secretary HK" | references/hk-corp-essentials.md § Corp secretary |
Reference: references/hk-corp-essentials.md contains the comprehensive 5,800-word HK corporate operations guide with full statute citations (Cap. 622, IRO Cap. 112), current fee schedules, and HK-Vietnam DTA mechanics.
⚠️ The 3 critical things to understand
1. Territorial taxation = the dominant strategic advantage
Unlike the US (worldwide taxation), HK only taxes HK-sourced profits. If your value-creating activities happen outside HK (e.g., dev team in Vietnam, customers in US/EU), you can file an offshore claim for 0% HK profits tax on those earnings.
- Two-tier rates:
- First HK$2M of HK-sourced profits: 8.25%
- Above HK$2M: 16.5%
- Only ONE entity in a group can use the lower rate (group-level election)
- Offshore claim mechanics: IRD scrutinizes; need documentation of where value is created. Cite DIPN 21 (Departmental Interpretation and Practice Notes No. 21).
- Common scenario: if dev team is in Vietnam (ByteonLab), customers are global, and only the company office + bank are in HK, the operating profit likely qualifies as offshore.
2. HK-Vietnam Double Taxation Agreement (DTA) — exists, with reductions
| Cross-border flow | Withholding |
|---|
| HK → Vietnam (dividends) | 0% from HK (no WHT on outbound divs); Vietnam side may tax recipient |
| Vietnam → HK | Vietnam imposes WHT on outbound; DTA reduces (typically 5-10% on dividends, 5-10% on royalties) |
| HK ↔ Vietnam (interest, royalty) | DTA reduces; see DTA Articles 10/11/12 |
Compare to US: no US-Vietnam treaty exists. So distributions to Vietnamese shareholders flow much more cleanly via HK than via US.
3. Audited financial statements are mandatory — for ALL HK companies
Regardless of size, every HK private company must produce audited financial statements annually by a HK-licensed CPA.
- Cost: HK$15,000–50,000/year depending on transaction volume + complexity
- Audit deadline: ready for AGM (within 9 months of FYE; or written resolution)
- This is a significant ongoing cost not always anticipated by foreign founders
Annual compliance calendar
| Item | When | Cost |
|---|
| Business Registration Certificate (BR) renewal | Annually on registration anniversary | HK$2,200 |
| Annual Return NAR1 | Within 42 days of incorporation anniversary | HK$105 (on-time); HK$870–3,480 if late |
| Profits Tax Return BIR51 | 1 month after IRD issues notice (typically April–May) | $0 (filing fee); audit cost separate |
| Audited accounts | Ready for AGM (9 months post-FYE) | HK$15K–50K |
| Particulars changes (officers, address, articles) | Within 14 days of change | HK$105 per filing |
| AGM | Within 9 months of FYE (or written resolution) | $0 |
Corp secretary services
Most foreign-founded HK companies use a TCSP/CSP (Trust or Company Service Provider). Common choices:
| Provider | Cost | Notes |
|---|
| GLAC (Global Link Asia Consulting) | HK$6–12K/year | Singapore-based; used by The One Game Studio. Vietnamese support. |
| Tricor | HK$10–15K/year | Mid-size; good for growing companies |
| Boardroom | HK$12–18K/year | Singapore-headquartered; full multi-jurisdiction |
| CC Corporate | HK$5–10K/year | Budget HK option |
Services typically include: registered office, company secretary, annual return filing, share allotment paperwork, particulars changes.
Cross-border with US Delaware sister (PlayableLabs Inc. context)
If you have both an HK Ltd + a Delaware Inc., the structure matters:
| Structure | Pros | Cons |
|---|
| Sister entities (current) | Simple; each entity taxed independently | Intercompany transfers require arm's-length pricing |
| DE holds HK (US-on-top) | VC-investor friendly; clean US fundraising path | Triggers US tax on HK profits when distributed up |
| HK holds DE (HK-on-top) | HK territorial taxation may shelter US profits | VCs prefer DE-on-top; HKEX-only IPO path |
Most common transition: start as sister entities, restructure to DE-on-top before US-led Series A (~$20–40K legal cost). Section 351 of US tax code allows tax-free contribution; HK side requires stamp duty 0.26% of NAV on the share transfer.
Action items
First 30 days
- Confirm registered office + corp-sec contract (GLAC, etc.)
- Verify BR certificate is current
- Open USD operating bank account (Airwallex / Payoneer / HSBC) — Airwallex easiest for foreign founders
- Maintain Significant Controllers Register (SCR) internally
Annual cadence
- Renew BR every year
- File NAR1 within 42 days of incorporation anniversary
- Engage HK-licensed CPA for audit + profits tax return
- AGM (or written resolution) within 9 months of FYE
- Update SCR for any ownership changes
Cross-border considerations (with DE sister)
- Written intercompany services agreement between HK + DE + ByteonLab VN
- Transfer pricing study (~HK$25–80K) if revenue > HK$400M or material related-party transactions
- Master File + Local File for BEPS Action 13 compliance (large groups only)
- Monitor PE risk — clear contracting scope to avoid "HK has PE in US" or vice versa
Companion skills
t1k-delaware-incorporation — DE sister entity setupt1k-foreign-owned-tax — US side of cross-border (5472, transfer pricing)t1k-cap-table-admin — HK cap-table is simpler than US; this skill mainly relevant for the DE entity
See also
