BUSINESS ADVISORY

Hong Kong Branch Establishment Guide

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A Hong Kong branch means a local branch of a company (headquarters) located in Korea and other overseas countries, which  It is a different concept from a local corporation in Hong Kong (Private Limited Company).

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Comparative example:

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1. Headquarters in Hong Kong, Korea:

- When accounting for the Korean head office, it is treated as an overseas branch, and the legal entity is the Korean head office.

- In Hong Kong, Offshore Company's Hong Kong  classified as business

- When accounting, create a separate account for the Hong Kong branch and insert it into the head office’s general ledger (Hong Kong branch’s fair-value is applied)

- In the event of a branch default (or claim), the head office  Legal debt accrual

- Transactions between the head office and branch offices are classified as internal transfer.

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2. Hong Kong subsidiary of the Korean head office:

- A Hong Kong local corporation in which the Korean headquarters holds a majority stake, and the Hong Kong corporation becomes a legal entity.

- Classified as a Private (or Public) Limited Company in Hong Kong

- In the case of accounting, prepare an independent audit report of the Hong Kong subsidiary and prepare consolidated financial statements with the head office

- In the event of a branch default (or liquidation), it is processed within the capital of the Hong Kong corporation.

- Transactions between the head office and branch offices are classified as Internal Transaction within a group.  (Adjustment of internal transactions when preparing consolidated financial statements)

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Requirements when establishing a branch  :

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- Must have an office entity in Hong Kong (lease agreement or Hong Kong work address)    

- Korean corporation business registration certificate (English / within the last 3 months)

- Notarized English translation of the articles of incorporation and registered copy (within the last 3 months)

- Shareholder List in English 

- In the case of a listed company, prepare listing registration documents

- Notarized documents or notarized English translation of recent financial statements and audit reports in English

- Passport copies and abstracts in English of all shareholder directors of the head office

- A copy of the Hong Kong branch manager’s passport and proof of address in English

- expense :  HKD 12,000 (branch establishment,  Hong Kong corporation interpersonal service for 1 year, bank account opening (includes consulting fee for 1 location)

Period: 13 to 15 business days from the date of submission of documents (Certificate - Branch registration certificate)  

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** The branch name must match the corporate name of the head office.

** The branch must prepare an annual audit report in English and submit it to the Hong Kong Business Registration Office every year for public disclosure.