Language: The official languages are English and Chinese. English is widely used in the commercial and political sectors, and Cantonese Chinese is used in domestic trade and industry.

Population: Hong Kong is one of the most densely populated areas in the world. The population is approximately 6 million, most of whom are of Chinese origin.

Political System: Hong Kong became a Special Administrative Region of the People's Republic of China on July 1, 1997, after a century and a half of British administration. Under Hong Kong's constitutional document, the Basic Law, the existing economic, legal and social system will be maintained for 50 years.

Under the Joint Declaration that was made between the British and Chinese governments in 1984, the following will remain unaltered for 50 years:

• A local government will continue, and it will have full authority with regard to executive, legislative and judicial matters;
• The legal, social and economic systems will remain in force;
• All forms of property, including inheritance and ownership by non-Hong Kong citizens, will be respected;
• The current economic position, including the financial markets and the HK$, will continue;
• The financial system will remain independent, and China will not seek to raise any taxes in Hong Kong;
• It will remain independent for customs purposes;
• Crown and land leases may be granted for up to 50 years after 1997;
• The freeport will remain.

Taxation: Tax is paid only on income that has its source in Hong Kong; i.e., taxation is not based on residence. No taxation is levied on income earned outside Hong Kong, even when remitted to Hong Kong. For example, if a Hong Kong company's business or trading activities are based outside Hong Kong, no taxes will be imposed.

Hong Kong companies with income earned in Hong Kong are taxed at a rate of 16.5% on profits, and individuals pay a maximum of 15% in taxes on income.

Incorporation: The most common type of company is a private company limited by shares; however, there are also companies limited by guarantee or unlimited. A Hong Kong private company can be incorporated within 15 working days, and ready-made companies are available for immediate use.

Requirements for incorporating a Hong Kong company are:

• The company must have a registered office address in Hong Kong. The address has to be notified within 28 days after the incorporation, to the Registrar of Companies.
• There must be at least two directors, individuals or corporations, who may be of any nationality.
• The company secretary must be an individual or company resident in Hong Kong.
• The minimum number of shareholders is two, and for a private company the maximum number of shareholders is 50. The shareholders may be individuals or corporations of any nationality.
• A Register of Directors and Secretaries, Shareholders and meetings must be maintained at the registered office address at all times. Also, the names and addresses of the Directors and Company Secretary have to be lodged with the Registrar of Companies, and this information is available to the public.
• Every company must appoint an auditor, who has to be a member of the Hong Kong Society of Accountants and must hold a practicing certificate.
• The company must keep accounting records, and these records may be kept at the registered office address or elsewhere at the discretion of the directors. There is no requirement to file accounts with the registrar but with the Tax Authorities.
• The company is required to hold annual meetings: the first meeting within 18 months from the date of incorporation and then no more than 15 months apart. Meetings of both directors and shareholders can take place anywhere, unless limitations are stated in the Articles of Association.
• Private companies are not allowed to issue bearer shares, and the share capital of the company must have a par value.
• The company is not allowed to invite the general public to buy shares or debentures; it is not permitted to purchase its own shares; and the company may not give financial assistance to others to purchase its shares.

The Articles of Association govern the internal affairs of the company. The Memorandum of Association must have at least two subscribers and should include:

• The name of the company
• The names and addresses of the subscribers
• The liability of its members
• The objects of the company
• The different classes of shares
• The share capital and the currency in which the shares are to be issued

1. Hong Kong is the leading Southeast Asian center for both finance and commerce, and it is ranked as the world's third largest financial center after London and New York. There are more than 160 licensed banks and 128 foreign banks represented in Hong Kong.
2. Hong Kong has excellent telecommunication systems that enable international direct dialing to more than 200 centers. The port facilities are the most modern in the world, and the airport is served by most international airlines.
3. Hong Kong is a taxation paradise for companies who wish to base themselves in Hong Kong with foreign earnings, because the principle of taxation is based on source income and not on residence.

• Immediate company availability
• An established international banking system
• Sophisticated company law
• Excellent commercial and communication infrastructure
• No disclosure of beneficial owner
• Exempt from taxes on foreign source income