The Truth About One Day Hong Kong Company Formation
When a person starts to think about setting up their own company in Hong Kong, the smart thing to do is to research what they’ll need. Inevitably, they’ll come across an advertisement or service provider that offers Hong Kong Limited company formation in just one day; they are usually asked to upgrade or pay a little bit more to avail of the so-called “express” incorporation. But is the “express” incorporation all it is made out to be? And is it really necessary? Let’s explore further.
How can a provider offer “express” incorporation?
The Companies Registry (CR) in Hong Kong has an e-Registry website platform (the “e-Registry”) that accepts incorporation forms and supporting documents 24 hours a day. Through the e-Registry, applications can be processed in as fast as 1 hour, so many service providers use this as an advertisement to attract new leads and customers.
Eligibility of “express” Incorporation
What is often not revealed in “express” incorporation advertisements however is that the CR requires shareholders and directors of an applicant company to submit certified true copies of their identification documents for approval before starting the incorporation process. Now, Hong Kong residents can have the certification of their Hong Kong IDs done by a practising notary public, solicitor, or CPA. Non-Hong Kong residents, however, must get their passports certified at the consular office of their respective countries. Inevitably the certification of supporting documents will amount to extra costs and added processing times, i.e. incorporation will not be as “express” as promised- perhaps in the case of Hong Kong residents it may be possible to obtain the certification within the same day, but for non-Hong Kong residents living overseas, for the most part, it will be unlikely.
Is e-incorporation worth it?
Besides is it essential to have a company incorporated in one day? If using the alternative old school pen and paper hard copy submission method, upon receipt of the original signed documents the Companies Registry will typically only take 4-5 working days to process and confirm incorporation. If a corporate service provider is handling the incorporation, another 1-2 working days may be required to pick up original certificates from the CR and IRD and to order a company kit. So, in total the traditional method will normally take a maximum of 7 working days, assuming all submitted documents are in order.
Realistically speaking, documentary requirements for e-registry account opening will take time, and so the difference between e-incorporation and traditional paper filing incorporation, aside from costs, is minimal. Whereas what can be accomplished in those extra 3 to 4 working days? Is it worth it to pay that much more money to expedite a process by 3 or 4 days? Sure, some suppliers might be willing and ready to do business at any moment, but setting up everything else like a corporate bank account can take several weeks if not months. Even with the emergence of Fintech options, approval of such accounts can take up to a few days as well.
Besides from our experience, many entrepreneurs tend to rush their company’s incorporation only to, later on, struggle with providing the most basic of information, or even responding to messages, not to mention developing their business.
Considering what is required in terms of documentation to set up an account with the e-registry, one-day incorporation may only indeed be an option for Hong Kong residents – of course, foreigners can make use of this option but only if they are present in Hong Kong. Even then, it will be very tight to try to arrange everything in one day so it may still take a couple of days in any case. So it should be considered whether the additional costs that come with expedited incorporation is really worth it. On that note, the rush of one-day incorporation may only be worth it for someone that has a critical deadline to catch otherwise, 3 or 4 extra working days shouldn’t have massive negative implications. After all, a company will last for years, and what’s another few days to set up a company properly.
In fact, if someone wants to have a quick, easy, and streamlined process of incorporating a company, having a quality service provider is the way to go. Proper service providers will not only give all the information needed, but they should also make sure that no mistakes are made and that a company will be up and running within the prescribed time – and then will be able to assist better to maintain the company in the future.
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