Introduction
Companies Act can be defined as the legal act that regulates the formation, dissolution and management of companies. It differs from Country to Country. No company can be established without following the norms set by the law. Among the Asia Pacific region, Singapore and Hong Kong are vying with each other to get the attention of the foreign companies to establish their business. Each country has its own entrepreneur friendly policies.
Singapore's Companies Act came into force in 1967. Any business that has more then 20 employees is termed as a Company. Companies in Singapore are governed by the Companies Act (Cap 50, 1994 Rev Ed.). Certain companies in addition to the Companies Act are also governed by other Acts. Example, Banks and Insurance companies are also governed by the Insurance and Banking Acts.
Company Registry of Hong Kong enforces the ordinance in that country and its statuaries are equivalent to English Companies Act. Other then a few amendments there are no major changes in the Act.
Given below is a comparative study for setting up a business in Singapore and Hong Kong.
Requirements for setting up a company
Singapore
- Minimum one shareholder
- Minimum one director who is the citizen of Singapore
- One Company Secretary who is the resident of Singapore
- Registered office address
- Shareholder and director cannot be the same person
Hong-Kong
- Minimum one shareholder
- Minimum one director who is the citizen of Hong Kong
- One Company Secretary who is the resident of Hong Kong
- Registered office address
- Same person can be the secretary, director and shareholder
Types of Companies that can be formed
Singapore
- Sole-proprietorships/Partnerships/Limited Liability partnership
- Private limited company
- Public limited companies
Hong-Kong
- Sole Proprietorship
- Private Company Ltd
- Public Company Limited
- Partnership
Procedure and Timelines for Company Registration
Singapore
- Get company name approval
- Prepare registration documents
- Client to sign company registration documents
- Register company
- Open bank account
- Memorandum and Articles of Association
- Statutory Declaration of Compliance
- Particulars of Shareholders, Directors, Secretaries, etc.
- Certificate of Identity
- Situation of Registered Office/Office Hrs at Time of Registration
- Consent to Act as Director and Statement of Non-disqualification to Act as Director
- A Consent to Act as Secretary
- Time taken to register the Company is normally 1 day.
Hong-Kong
- Choose Company Name
- Get Business Registration Certificate from Inland Revenue Department (includes the following)
- Memorandum and Articles of Association, Articles of Association and appointment of first directors
- Declaration of Compliance
- Notice of Appointment of First Secretary and Director
- Consent to Act as Director
- Notice of Situation of Registered Office
- Letter of appointment of first directors
- Minutes of First Directors' Meeting
- Sign up Employee compensation Insurance with a bank and make a corporate seal
- Time taken to register a company in Hong Kong is usually 7 - 9 working days.
Advantages of doing Business in Singapore vs. Hong-Kong
Singapore
- Singapore has extensive tax-treaties with other countries
- English is a common language
- Taxes are only on the income sourced within or that is remitted into Singapore from a foreign source
- It has a one-tier corporate tax system
Hong-Kong
- Does not have tax treaties with other countries
- Local language (Chinese, Cantonese) are predominantly used compared to English
- Does not have a good support for double taxation treaties
- Both the company and its shareholders will be taxed on the profits earned
Refer to Singapore Company Setup Services for setting up a company in Singapore and Singapore Companies Act Guide for more information on recent amendments regarding company formation and taxation.
Author: Andrew GMS Chen
Article Source: EzineArticles.com
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