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Comparison Between Hong Kong and China Registered Companies

Updated:2018-2-9 15:09:04    Source:www.tannet-group.comViews:194

It is of great importance for foreign investors to know the differences between Hong Kong and China registered companies when doing business in China. It would be easy to assume that the registration of a Hong Kong company and a Mainland China company would be more or less the same but this is far from the case. Because actually Hong Kong and China registered companies operate under very different legal systems and are registered by different authorities.

I. Legal System
Chinese government implements “One Country, Two Systems” Principle for Hong Kong Special Administration Region. Therefore, Hong Kong operates under an almost completely different legal system to the Mainland.

Hong Kong: Companies registered in Hong Kong are subject to the laws of Hong Kong under the Companies Ordinance (Cap. 622);

China: Companies registered in Mainland China are subject to the “Company Law of the People’s Republic of China”.

II. Registration Body
Given that their respective legal systems are different, it thus makes sense that company registration in Hong Kong and China are administrated by different bodies.

Hong Kong: Companies are registered by the Hong Kong Companies Registry;

China: Companies are registered by the AIC (Administration for Industry & Commerce).

III. Business Scope
In some jurisdictions, a company can only operate in the fields they are approved for - this is known as their “business scope”.

Hong Kong: there is no requirement for a Hong Kong-registered company to define their business scope;

China: companies registered in Mainland China can only conduct activities which they have been approved to include on their business scope by the AIC.

IV. Registration Number
Chinese companies are each issued unique registration numbers - so how do those numbers differ for Hong Kong & China registered companies?

Hong Kong: Limited liability companies are issued a unique 7 digit registration number by the Hong Kong Companies Registry. (Note that not all businesses are registered as limited liability companies).

China: All entities are issued with an 18 digit company registration number by the AIC. (Note that the previous 15 digit registration numbers are being phased out before end of 2017).

V. Company Secretary VS. Legal Representative
Certain roles are mandated in companies registered in different jurisdictions – for Hong Kong & China registered companies the most obvious difference is with Company Secretary and Legal Representative.

Hong Kong: must nominate a Company Secretary – this role can be held by either an individual or a body corporate, who reports directly to the board of directors and the chairman. There is no official role of “Legal Representative” in a Hong Kong company.

China: no requirement for a Company Secretary, but each company must appoint a Legal Representative – this role is held by an individual is deemed to be a “responsible person” and serves as the “legal embodiment of the company’s interests”.

VI. Company Name
There are important differences to be aware of with the naming of Hong Kong & China registered companies.

Hong Kong: the Hong Kong Company Registry operates a completely bilingual service, so companies can be registered with:

- only a Chinese name
- only an English name or
- both a Chinese and English name
Note that Chinese names are registered in Traditional Chinese characters.

China: all companies must be registered with a Chinese name in Simplified Chinese characters. Although an English name can be registered this is not core to a Chinese company’s registration.

Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website www.tannet-group.net, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.

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