Establish a Branch vs. a Subsidiary in Hong Kong

A presentation brought to you byOpenCompanyHongKong.com

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Foreign Businesses in Hong Kong

• Hong Kong is a global business and trade centre and many international companies want to locate their Asian market operations in this business friendly city.

• Foreign companies that want to establish their presence in Hong Kong can open a branch or a subsidiary in Hong Kong.

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Options for Foreign Investors in Hong Kong

• The branch and the subsidiary are the two top choices for foreign companies that enter the Hong Kong market.

• Before starting their operations in the city, foreign companies can also open a representative office, with a limited scope of action.

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Choosing Between the Branch and the Subsidiary in Hong Kong

• The choice between the branch and the subsidiary in Hong Kong will largely depend on the foreign company’s plans for expansion on the Hong Kong and Asian market.

• The foreign company registration options in Hong Kong can also depend on the existing budget and the size of the parent company.

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The Hong Kong Branch

• The branch in Hong Kong is essentially an extension of the foreign company.

• It is not a separate legal entity, it performs the same commercial and business activities and shares the name. The foreign company is liable for its debts and obligations.

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Branch Registration in Hong Kong

• The registration procedure for a Hong Kong branch is simpler than in the case of the subsidiary. This characteristic is advantageous for some foreign investors.

• An Application for Branch Office Registration must be submitted with the Hong Kong Companies Registry.

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The Hong Kong Subsidiary

• The subsidiary is a separate legal entity from the overseas parent company that is 100% percent owned by it.

• The liabilities of the subsidiary do not transfer to the parent company. This business form is registered as a limited liability company in Hong Kong.

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Subsidiary Registration in Hong Kong

• The registration procedure for a subsidiary in Hong Kong is the same as for Hong Kong resident companies.

• The company must choose a suitable name, register with the Companies Registry and obtain the necessary permits for conducting business.

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Cost Considerations Branch vs. Subsidiary in Hong Kong

• The differences between the branch and the subsidiary in Hong Kong imply more than the parent company’s liability.

• The branch has lower incorporation costs and no minimum share capital. The liquidation proceedings for a branch can be simpler than in the case of the subsidiary.

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Company Formation Assistance in Hong Kong

• Foreign companies in Hong Kong can enjoy a series of tax benefits under the double tax treaties concluded by the city.

• You can contact our company formation agents in Hong Kong for more information and help for setting up a branch or a subsidiary.

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