How to Successfully Complete the Process of Mainland Shareholders Controlling a HK Company

How to Smoothly Handle the Process of Mainland Shareholders Controlling Hong Kong Companies

With the continuous deepening of global economic integration, more and more mainland enterprises choose to set up companies or control Hong Kong companies in order to take advantage of Hong Kong's unique advantages as an international financial center. Hong Kong not only has a mature financial market, a sound legal system, and an efficient business environment, but also enjoys unique policy support under one country, two systems. These factors make Hong Kong a stepping stone for mainland enterprises to enter the international market. However, for mainland entrepreneurs who are new to this field, how to smoothly handle the process of mainland shareholders controlling Hong Kong companies may be a challenge. This article will provide a detailed introduction to this process and offer clear guidance based on relevant news information.

First, mainland shareholders must meet certain conditions to control Hong Kong companies. According to the regulations of the Hong Kong Companies Registry, any natural person or legal entity holding a Chinese mainland ID card can apply to control a Hong Kong company as long as they meet the requirements of relevant laws and regulations. It is worth noting that Hong Kong company law allows one-person shareholding, meaning that even if there is only one shareholder from mainland China, they can still establish and control a Hong Kong company. When mainland shareholders control Hong Kong companies, they usually need to achieve indirect control through offshore companies or trust structures to avoid certain regulatory restrictions.

In practice, the process of mainland shareholders controlling Hong Kong companies involves a series of complex steps. The first step is to determine the company's registered capital and shareholder structure. Hong Kong company law stipulates that the minimum registered capital is 1 Hong Kong dollar, but the actual amount should be reasonably set according to the scale of operations and funding needs. At the same time, mainland shareholders need to clarify their shareholding ratio and ensure its explicit stipulation in the articles of association. For example, when a mainland technology company established a subsidiary in Hong Kong in 2025, it clearly stated its controlling position and further consolidated its control over the subsidiary through board seat allocation.

The second step is to prepare necessary documents and materials. This includes but is not limited to the application form for company name approval, shareholder identity proof documents, draft articles of association, and appointment documents for directors and secretaries. Mainland shareholders should note that all documents submitted to the Hong Kong Companies Registry must be filled out in English or bilingual Chinese-English, and must go through a notarization procedure. For instance, at the beginning of 2025, a mainland real estate company delayed its registration process when establishing a new company in Hong Kong due to failure to timely submit notarized shareholder identity proof. When preparing documents, all materials must be carefully checked to avoid omissions or errors.

The third step is to submit the registration application to the Hong Kong Companies Registry. Mainland shareholders can complete this stage through an agency or independently. If choosing an agency, it is recommended to prioritize those with rich experience and good reputation. These agencies can help mainland shareholders successfully complete the registration procedures and provide additional services such as tax declaration and bank account opening. For example, last year, a mainland logistics company entrusted a well-known agency to register a branch in Hong Kong, completing the entire process within two weeks, greatly saving time and effort.

The fourth step is to handle bank account opening procedures. To operate normally, a Hong Kong company must open a local bank account. Before opening an account, mainland shareholders usually need to schedule an appointment with the bank and prepare all necessary documents, such as the company registration certificate, business registration certificate, and director identification proof. Some banks may require mainland shareholders to personally visit Hong Kong for face-to-face signing to verify identity information. It is worth noting that in recent years, due to the strengthening of anti-money laundering regulations, major Hong Kong banks have become stricter in background checks on account applicants. Mainland shareholders should maintain a good credit record when applying for an account and prepare a detailed business plan explanation.

The fifth step is to comply with relevant tax compliance requirements. Hong Kong implements a territorial source taxation system, which means that only income derived within Hong Kong is taxed. Hong Kong companies controlled by mainland shareholders need to timely declare profits tax and properly keep financial records. They also need to pay attention to the information exchange mechanism with mainland tax authorities to avoid unnecessary trouble caused by double taxation issues. For example, earlier this year, a mainland e-commerce company proactively hired an accounting firm to assist with tax matters after setting up a subsidiary in Hong Kong, effectively reducing potential risks.

Finally, mainland shareholders should also focus on the details of subsequent management. For example, regularly hold board meetings, update the company's registered address and contact information, and promptly respond to emergencies. With changes in the Hong Kong business environment, mainland shareholders should stay informed about the latest legal and regulatory developments to ensure that the company remains in compliance. For example, Hong Kong recently introduced a series of policies encouraging innovation and technological development, attracting a large number of mainland high-tech enterprises to invest and set up factories. Mainland shareholders who seize these opportunities will undoubtedly bring greater development space for their companies.

In summary, while controlling a Hong Kong company as a mainland shareholder is not easy, it can be achieved smoothly by following the correct process and making adequate preparations. In this process, mainland shareholders not only need solid professional knowledge but also should skillfully utilize external resources such as professional agencies and legal advisors to improve efficiency and reduce risks. In the future, with the deep advancement of the Guangdong-Hong Kong-Macao Greater Bay Area construction, economic and trade exchanges between the two places will become closer, and the prospects for mainland shareholders controlling Hong Kong companies will undoubtedly be broader.