How much does it cost to set up each type of corporate vehicle used to invest in real estate?
The fees for incorporating a company having a share capital include an application fee of HK$1,720 if delivered in hard copy, and HK$1,545 if in electronic form.
On the other hand, for a company not having a share capital the fee for incorporation is calculated according to the number of members stated in the company's articles of association. The fee is HK$170 (for 25 or less members), HK$340 (for more than 25 but not exceeding 100 members), and an additional HK$20 for every 50 members or less after the first 100 members. This fee is subject to a maximum of HK$1,025.
Any party that applies for the incorporation of a Hong Kong company or registration of a non-Hong Kong company under the Companies Ordinance is deemed to have made a simultaneous application for business registration. From a cost perspective, this means that the prescribed business registration fee and levy must also be paid to the Companies Registry (in addition to the incorporation fee above). There are two types of business registration certificate, namely the one year certificate and the three year certificate. The amount of fees payable under a certificate generally depends on the commencement date of the registration certificate. For a one year certificate, the amount payable (ie registration fee plus levy) is HK$2,150 (subject to review from time to time), whereas for a three year certificate the amount payable is HK$5,650 (subject to review from time to time).
In order to register a place of business in Hong Kong, the non-Hong Kong company must pay an application fee of HK$1,720 if delivered in hard copy form, and HK$1,545 if in electronic form. In addition, it must pay a business registration fee and levy to the Companies Registry. There are two types of business registration certificate, namely the one-year certificate and the three-year certificate. The amount of fees payable under a certificate generally depends on the commencement date of the registration certificate (ie the date of commencement of business). For a one year certificate, the amount payable (ie registration fee plus levy) is HK$2,150 (subject to review from time to time), whereas for a three year certificate the amount payable is HK$5,650 (subject to review from time to time).
The main costs of setting up a partnership are the costs involved in relation to the drafting and conclusion of the partnership agreement. A simple partnership agreement can cost around HK$50,000 to prepare, although the actual costs can vary from one partnership to another, depending on the lawyers' fees charged in preparing the partnership agreement and the complexities of the arrangements between the parties.
Also, in order to establish a limited partnership in Hong Kong, registration must be obtained (otherwise it will be deemed to be a general partnership and all limited partners will be deemed to be general partners with unlimited liability). The registration fee is HK$340, plus an additional fee of HK$8 for every HK$1,000 (or part of HK$1,000) of the sum contributed by each limited partner.
For a limited partnership fund, a registration fee of HK$2,555 plus a lodgement fee of HK$479 are payable on application for registration. The eligibility requirements of a fund to be registered as an LPF are set out in section 7 of the Limited Partnership Fund Ordinance (LPFO)
The main cost associated with setting up a trust is the preparation of the trust deed. This could cost around HK$200,000, although the precise amount will vary depending on the type and complexity of the trust arrangement including compliance with applicable regulatory requirements. For unit trusts that require authorization, an application fee for authorization must also be paid to the Securities and Futures Commission. The amount of fee varies depending on the nature of the unit trust fund, for instance, the application fee for a single fund is HK$20,000. After authorization is obtained, an authorization fee is payable, together with the first annual fee before the authorization is effective. This fee also varies according to the nature of the unit trust fund. An authorization fee of HK$10,000 and a first annual fee of HK$6,000 is payable in the case of a single fund. Higher fees apply to ‘umbrella’ type funds.