By Vlad Cuc, specialist in company formation matters
Shelf companies are legal entities that have been registered and are put on hold until they are sold to entrepreneurs. Our company formation experts in Hong Kong can help you purchase a ready-made company and customize it to meet your business needs.
Table of Contents
What are the main characteristics of shelf companies?
A shelf company is a legal entity that has been incorporated but has not been used for trading. It is sometimes called an aged company.
Some of the main traits of shelf companies, as well as some of their most important advantages, are described in the list below.
- They are already registered: this means that they have a Business Registration certificate issued by the Company Registry.
- They were not used for trading: this means that they were never engaged in business or commercial activities.
- They can be personalized: the name of the Hong Kong shelf company (if available) can be changed, and so can the authorized capital; the new owner can also appoint more than one director.
- They are a convenient alternative: the business can start more rapidly compared to when an investor opens a new company.
| Quick Facts | |
|---|---|
| Legal entities available for shelf company | Limited Liability Company (LTD)
|
Time required for purchasing the company |
Approximately 2 working days, not including due diligence |
Types of features it includes (corporate bank account, VAT number, etc) | It is already registered Can include a corporate bank account |
| The advantages of a shelf company | The incorporation has already taken place
The company can be used for immediate business operations |
| Appointing new directors (yes/no) | Yes |
| Capital increase allowed (yes/no) | Yes |
| Certificate of no commercial activities (yes/no) | Upon request |
| Modify the objects of activity (yes/no) | Yes |
| Participants in the purchase procedure | The buyer (natural or legal person) and the seller (usually a legal person) |
| The uses of a shelf company | Can be used in many different business fields |
| Documents necessary for the purchase | The buyer's personal identification documents. The shareholder's details will be updated with the Hong Kong Companies Registry |
| Taxes applied to a shelf company |
The corporate income tax, social security contributions, stamp duty, real property tax, etc. Hong Kong does not levy VAT or taxes on dividend distributions |
| Changing the registered address (yes/no) | Yes |
| Aged shelf company available (yes/no) | Yes. Costs differ in this case |
| The institution where corporate changes are registered | Companies Registry |
Can anyone buy a shelf company in Hong Kong?
Yes. There are no nationality restrictions on company ownership in Hong Kong. You may purchase a ready-made company even if you are not a Hong Kong resident and do not plan to become one.
What steps must I follow when buying a shelf company in Hong Kong?
The main step for those who opt to buy a ready-made company instead of incorporating one is the ownership transfer phase, which involves signing the documents that appoint the new company owner(s).
Before this, the interested entrepreneur may also:
- Research their available options;
- Understand the requirements for corporate compliance in Hong Kong;
- Decide on their purchase option, following a due diligence process (see below);
- Provide the required documents for drawing up the ownership transfer documents;
- Wait for the processing of the changes with the Companies Register.
Do you offer special packages for those who buy shelf companies in Hong Kong?
Yes. Our team is available to provide the required service to purchase a ready-made company in Hong Kong.
Our shelf company package can include the following:
- Company selection: our team is ready to provide assistance in selecting a shelf company based on specific investor criteria, such as age or type;
- Due diligence: we help our clients with a thorough company verification meant to identify any indicators that might translate into a risky investment; we look at the company’s financial records as well as any previous activities, if there are any;
- Banking and finance: we assist clients during the procedures required for changing the bank account holder for the company;
- Final procedures: we also handle post-transfer steps such as changing the company name, adding more objects of activity as well as other particulars changes that need to be notified to and registered with the Companies Registry.
Upon request, our team offers services related to Hong Kong company bank account opening. Our options include:
- Physical bank account opening (one account) for the price of USD1,000. Attendance is required in this case;
- Digital bank account opening (one account) for the price of USD500.
Can I make changes to the company after I purchase it?
Yes. This is a common practice, and the choice may depend on one’s business goals, along with other factors. Once the company ownership transfer is complete, you can:
- Change the company name: provided that the new name is available for use and complies with the general policy on company names in Hong Kong (and the restrictions that can apply, for example, to using certain words);
- Make changes to the share capital: you can issue new shares, change the types of shares, increasing the company’s capital;
- Change the business scope: you may change the company’s main object of activity;
- Change the address: all companies must have a local registered address in Hong Kong, however, this can be changed if the new owners decide to do so;
- Select a new company secretary: the requirement to have a company secretary applies to all Hong Kong companies, however, the current owner of the business may appoint a new one.
All changes brought to the purchased shelf company are made through the one-stop notification of change of company particulars, a service available under the Companies Registry.
Our agents invite you to watch a video about the advantages of a Hong Kong shelf company:
How are shelf companies taxed in Hong Kong?
As a locally registered business in Hong Kong, the shelf company will be subject to the following taxes:
- Corporate income tax rate: 8.25% on the first HKD 2 million of assessable profits and 16.5% on the remainder;
- Capital gains tax: 0%;
- Withholding tax on dividends, interest, and royalties: 0% for resident companies;
- Value-added tax: there is no VAT or sales tax in Hong Kong;
- Social security contributions: expected from both the employer and the employee; the employer pays a contribution of 5% of the employees’ salary in most cases;
- Real property tax: 15% of the net assessable value of the property;
- Stamp duty: charged in some cases; for the transfer of Hong Kong shares, this is 0.2% of the value of the transferred shares.
If you are interested in knowing more about how to open a company in this location, contact us for details and the advantages of every type of company available for registration in Hong Kong.