Hong Kong is the world’s financial center and an international business hub. Hong Kong attracts many foreign investors and entrepreneurs. There are over 340,000 small and medium businesses in Hong Kong. These and future businesses are of utmost importance to the development and growth of Hong Kong’s economy.
Hong Kong is a very attractive location for business owners because of its free trade policy, its global market, and it offers tax and business platforms that are very supportive and business-friendly. Company secretaries who specialize in corporate governance are oftentimes the ones that keep these businesses on track and are making sure that the company meets all specified regulations.
It’s very easy to underestimate the importance of a Hong Kong company secretary service but without their expertise, businesses could very easily veer off track. This article will cover the role and why company secretarial services are so crucial to the success of businesses in Hong Kong.
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Corporate Compliance in Hong Kong
Companies must adhere to specific statutory laws and regulations when setting up and running a business.
There are specific requirements in Hong Kong that companies must meet. One of these requirements is that every business must have a registered office in Hong Kong.
Another condition is that at least one company director must be a natural citizen and either be a resident or non-resident of Hong Kong.
Finally, each business must have one company secretary who is either a natural citizen or a corporate body that has an office registered in Hong Kong.
What is a Hong Kong Company Secretary
To incorporate a company in Hong Kong, businesses must meet specific requirements. One of these requirements involves company secretaries.
In this role, a company secretary has duties far from typical clerical responsibilities. A secretary is a company’s representative who ensures the company is compliant with all laws per the Hong Kong Companies Ordinance.
According to the Companies Ordinance, any and all companies registered in Hong Kong must have a company secretary.
Why is a Company Secretary Crucial to a Business in Hong Kong
A company secretary is one of the most crucial representatives of a business. They are an essential factor in the growth and sustainability of a company.
Legally, there’s no getting around not having one if your business is registered in Hong Kong, according to the Companies Ordinance.
This law is strict because the Hong Kong authorities can even prosecute you for running a business without a company secretary.
A company secretary acts as a liaison or spokesperson between the Hong Kong government and the business.
There are several governmental and regulatory bodies that a company secretary interacts with who regulate the activities and operations of a business.
Some of these include the Registrar of Companies, Stock Exchange of Hong Kong, the Inland Revenue Department, and the Securities and Futures Commission of Hong Kong.
Another important reason why a company secretary is so crucial to a business in Hong Kong is that they make sure that the company is compliant and works under the law.
There are specific legal requirements in setting up and maintaining a business in Hong Kong.
A company secretary makes sure the business operates within these parameters keeping it clear of any illegal activities or government penalties.
What Are the Main Responsibilities of a Company Secretary?
The primary responsibilities of a company secretary not only includes keeping the company compliant in accordance with the law but they extend outside of this and branch off to many different areas. Some of these responsibilities include the following:
- Help with the process of Hong Kong company incorporation
- Registers the business with the Inland Revenue Department of Hong Kong at the business registration office within one month of starting the business
- Apply for any government business license, permit, or business registration certificate required.
- Makes sure the company complies with the Companies Ordinance of Hong Kong
- Maintains the registry such as updating the registered address, company name, or any other company details
- Meets statutory deadlines, maintains statutory records, and assists with statutory compliance
- Provides tax filing services to meet tax obligations such as preparing and filing annual returns to Hong Kong companies registry. All newly incorporated companies must file their first profits tax return 18 months after the date of incorporation. The profits tax return for existing companies is issued the first workday of April and must be filed one month from being issued. Statutory returns must be filed and sent to the Companies Registrar according to the Companies Ordinance.
- Prepares and files resolutions to any corporate compliance matters
- Notifies the company directors and others about company meetings
- Prepare for meetings for the board of directors and shareholders
- Creates and distributes company accounts and reports
- Prepares for the annual general meetings
- Prepare agenda and take the minutes of all meetings
- Stay on top of corporate services governance
- Make sure there is an annual statutory audit by an independent and certified public accountant
Requirements of a Company Secretary
Effective from 1 March 2018, under the Anti‐Money Laundering and Counter‐Terrorist Financing Ordinance (“AMLO”), any person who wishes to carry on a trust or company service business (including company secretary services) in Hong Kong has to apply for trust or company service providers (“TCSPs”) license and comply with the relevant requirements of the AMLO.
Qualities to Look For in a Company Secretary or Corporate Secretarial Services
There are other qualifications to look for other than the eligibility requirements of a company secretary. Some of these qualities include the following:
- Professional training and experience in corporate governance. This person must stay current on all regulatory practices and regulations.
- Strategizing and experience in business operations. Advise and come up with strategies for compliance requirements.
- Exceptional planning skills. Must be able to organize meetings and ensure compliance according to a timeline.
- An effective communicator. A company secretary’s primary role is to pass the information to government and regulatory agencies, directors, shareholders, and investors. They must negotiate, be diplomatic, and be a team player.
- Full of integrity. The company secretary is privy to many of the company’s records, so you want someone who will keep all of the information confidential.
Benefits of Using an Agency or Corporate Secretarial Services
There are benefits of using a Hong Kong company secretary service such as an agency or firm.
Most agencies and firms have years of professional experience guiding offshore companies with their compliance services.
When agencies help with the registration process, their addresses can be used, which means you wouldn’t necessarily have to have your own office to attain a registered office address.
These agencies specialize in providing companies with a professional company secretary and therefore have a lot of experience when it comes to company secretarial services.
This is especially important if you’re in a new business and just learning the ropes. Their expertise in corporate governance is unmatched. Company secretarial services can help you avoid a lot of mistakes.
According to the 2018 amendment to the Companies Ordinance, all companies must prepare and maintain a Significant Controllers Register. The agency can prepare, maintain, and update this registry, eliminating some extra work on your end. There is no substitute for company secretary services in Hong Kong.
Corporate governance is a very specialized area. That’s why it is so beneficial to have access to an agency that provides knowledgeable and experienced company secretaries. For more information, contact us here.
ReachTop KSHK CPA, Ltd. is one of the most reliable and trusted firms in Hong Kong, for specialized services that cater specifically to your business needs.
Contact Reachtop KSHK for a free consultation
FAQ
Can a sole director serve as a company secretary in Hong Kong?
Neither the sole director nor shareholder can serve as a company secretary in Hong Kong. There must be more than one director in order for a director to serve as a company secretary.
What does a company secretary do?
A company secretary acts as a custodian of statutory documents, acts as a liaison between the company and government agencies, takes care of government filings, oversees the statutory books, and ensures the company’s operations comply, etc.
Can you use the agency’s address that provides the corporate secretarial services as the company’s registered office address?
When agencies are involved with the registration process, you can use the agency’s address as the registered office address.
What is the companies registry?
Local limited companies or non-Hong Kong companies incorporated outside of Hong Kong but have an established place of business in Hong Kong must be registered with the companies registry.
Do you need a company secretary in Hong Kong?
As per Section 474, Cap. 622 of the Companies Ordinance, you will not be able to register your company without a company secretary. There is no getting around this regulation.
Who can be a company secretary in Hong Kong?
Effective from 1 March 2018, only a person or corporate with the Trust or Company Service Provider (“TCSP”) license or those exempted from the TCSP (e.g. Licensed CPA) can provide the company secretary service in Hong Kong.
Is a company secretary the same thing as a secretary?
A secretary handles clerical duties where a company secretary oversees the company’s operations and ensures that it stays within the parameters of the law.
What does the maintenance and custody of statutory books entail?
The company secretary is responsible for maintaining and making statutory documents available, changing any details of the company, and for the production and publishing of company account records.
How do company secretaries facilitate tax compliance?
Company secretaries facilitate the registration of the company, handle any tax issues that arise, and file tax returns.
Can you appoint a new company secretary?
Yes, you can appoint or change the company secretary at any time.