It is possible to set up a business in Hong Kong in just two days, but you better know exactly what that means. Fion Sen, co-founder and managing director of Bridges Executive Centre, contacted Localiiz to help our readers weigh the pros and cons of starting a shelf company.
In the case of a whole new company, you can specify your preferred company name, but the registration process time is relatively longer at approximately 10 working days upon signed confirmation.
As its name suggests, a shelf company is an entity that has already been incorporated and is available for selling now. It is legally registered in Hong Kong without any assets or liabilities.
This entity is popular for people who do not have preference in the company name and can’t wait too long to get it incorporated. The whole setup procedure can be accomplished in two days. However, it is important to weigh the pros and cons before purchasing a shelf company.
Advantages of a Shelf Company
Short Processing Time: If you cannot wait until an all-new company is incorporated (usually around 10 working days), you can opt for a shelf company that only takes 1-2 working days to finish the setup. It is preferable for business owners who stay in Hong Kong for a very short period of time.
An Almost Instant Option: Under some circumstances, you will need to do business immediately by having a company registration number on hand, like making an urgent business deal or entering into a tender.
Quick Bank Account Opening: If you opt for an all-new company setup, you will need to wait for around two weeks to get the firm incorporated and bank account ready. Comparatively, if you buy a shelf company, you can open the bank account right away and start your money transactions.
Disadvantages of a Shelf Company
Limited Company Name Choice: When you buy a shelf company, you need to choose your company name from a given shelf list, and cannot specify your preferred company name from the beginning. However, you can change the company name after the purchase.
Maintenance Fee: Since a shelf company has been set up for a period of time already, it could incur different maintenance fees shortly after the purchase like annual return fee, accounting and auditing arrangement fee, etc.
Now that you understand the basic pros and cons of a shelf company, including how fast it takes to finish the setup, you should also understand how to upkeep the company. Therefore, apart from choosing a shelf or new company to start with, it is also crucial to consider the maintenance afterwards. A better approach would be starting the business with a professional and one-stop-shop service provider which can take care of all corporate compliance needs of your company, hence you can focus on your business development and enhancement. The service provider should be able to help you from the beginning: company incorporation, opening the bank account, and obtaining a registered address, to company maintenance like: appointing a company secretary, accounts and audit arrangement, tax-efficient planning, securing a working visa, etc., for which you can leave them all to the professional firm to handle and save yourself the hassle. With attentive assistance, the upkeep will not be hard and your company could run and grow steadily.
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