Hong Kong regularly ranks among the freest economies in the world, attracting new companies and opening up unprecedented growth opportunities for them. The city ranks second in Asia and third in the world in terms of receiving foreign direct investment.
However, the desire to do business in Hong Kong is not enough – without understanding all the legal intricacies and complying with regulatory requirements, your business may be doomed to failure from the very first days. One of these obligations is the presence of a corporate secretary. Failure to comply with this requirement can lead not only to fines, but also to lawsuits.
A corporate secretary performs an important function for the successful functioning of a legal entity. The secretary helps in the administration of your company in Hong Kong and in interaction with government agencies.
In this article, we will talk about the functions of a corporate secretary, and also give recommendations on how to choose a proven specialized company secretary and not make a mistake.
Corporate Secretary Requirement in Hong Kong
Mandatory Appointment
According to the Companies Ordinance (Cap. 622), every company operating in Hong Kong is required to appoint a corporate secretary.
Role of the Corporate Secretary
- The corporate secretary ensures that the company adheres to statutory and regulatory requirements, maintains official records, and handles administrative tasks such as filing annual returns and other necessary documents with the Companies Registry.
- The corporate secretary is responsible for providing the company with a registered office address. Usually, it is provided for a period of one year and must be renewed annually.
- The corporate secretary reliably has to provide information about the company to government agencies
Distinction from Office Secretary
It is beneficial to understand that a corporate secretary is not the same as an office secretary. Unlike traditional office roles that involve administrative tasks such as answering calls and managing office duties, a corporate secretary acts as a “mandatory corporate governance consultant.” Their primary responsibility is to ensure that companies comply with applicable Hong Kong laws and regulations.
Evolution of the Role
The role of a corporate secretary has evolved significantly since its inception in Hong Kong. Prior to 2018, there were no specific restrictions to do the job. However, with the introduction of the Anti-Money Laundering and Terrorist Financing Ordinance (AMLO) on 1 March 2018, only resident individuals or resident companies holding a Trust or Company Service Provider (TCSP) License can perform corporate secretarial functions. Obtaining a TCSP license confirms that the secretary complies with Hong Kong Government regulations. Typically, these requirements include an obligation to comply with AML and CTF (Anti-Money Laundering & Counter-Financing of Terrorism) regulations, corporate integrity and due diligence, having the necessary staff on the secretary’s payroll, and a physical place of business in Hong Kong.
Importance of a Competent Corporate Secretary
Appointing a competent corporate secretary is essential for ensuring that the business complies with local laws, thereby reducing the risk of violations and fostering a positive corporate image. The corporate secretary plays a pivotal role in maintaining the company’s legal standing and supporting its governance framework.
By understanding and fulfilling these responsibilities, a corporate secretary helps safeguard the company’s compliance and integrity, contributing to its overall success and reputation.
What are the responsibilities of a corporate secretary?
The Corporate Secretary is responsible for the registration and ongoing corporate maintenance of a company in Hong Kong. Their main duties include liaising with the Hong Kong Companies Registry, the Inland Revenue Department, and other administrative bodies.
Main Duties
- Assistance in сhoosing the type of company: advising on the most suitable type of company structure based on the business needs and objectives.
- Company registration: providing full support for the company registration process, including the preparation of all necessary documents and filing of applications.
- Provision of a Registered Address: providing the company with an official registered address in Hong Kong.
- Submission of Annual Return (Form NAR1): filing the Annual Return with the Companies Registry of Hong Kong to ensure compliance with statutory requirements.
- Business Registration Certificate: updating and keeping a valid Business Registration Certificate at the company’s registered office.
- Payments and duties: organizing and performing all necessary payments and duties to the Companies Registry and the Hong Kong Inland Revenue Department.
- Maintaining registers: maintaining and updating the Significant Controller Register and other mandatory company registers.
- Official correspondence: receiving and processing official correspondence from government agencies and maintaining communication with these agencies on behalf of the company.
- Updating company information: updating information about the company and its authorized persons in the Companies Registry.
- Annual Meetings: organizing and preparing all necessary documents for holding annual meetings of shareholders or directors.
- Stakeholder Interaction: interacting with stakeholders, including shareholders, to ensure smooth communication and compliance with governance practices.
The Corporate Secretary plays a vital role in ensuring that the company remains compliant with Hong Kong’s regulatory framework, thereby safeguarding the company’s legal standing and contributing to its overall success and reputation.
The Importance of a Corporate Secretary for a Company
The appointment of a corporate secretary is a mandatory legal requirement in Hong Kong for all companies. The absence of a licensed corporate secretary can lead to significant fines and, in some cases, to legal proceedings.
Cap. 622 of the Companies Ordinance, Part 476, sets out the obligation of a company to appoint a company secretary. Failure to have a company secretary in a Hong Kong is an offence. If a company fails to comply with a direction under this section, the company and every responsible person of the company commits an offence and is liable to a fine at level 6 and, in the case of a continuing offence, to a further fine of $2,000 for each day during which the offence continues.
Fine Levels for Offences
- Level 1: HK$2,000
- Level 2: HK$5,000
- Level 3: HK$10,000
- Level 4: HK$25,000
- Level 5: HK$50,000
- Level 6: HK$100,000
A corporate secretary must comply with all legal requirements and have a confirmed license to operate. Vita Liberta Limited is one of such companies. We operate within the framework of Hong Kong law, ensuring the smooth operation and successful functioning of your business.
Involving Vita Liberta Limited will provide comprehensive support for your business in matters of interaction with government agencies and will help to avoid fines and possible legal problems.
How to Select a Corporate Secretary in Hong Kong?
Valid TCSP License:
- Confirm that the corporate secretary possesses a valid Trust or Company Service Provider (TCSP) license. This is crucial for legal compliance in Hong Kong and ensures adherence to Anti-Money Laundering and Counter-Financing of Terrorism regulations.
Service Costs:
- Evaluate the pricing and service offerings of various corporate secretaries. Ensure that the fees are competitive and align with market standards. Aim for a balance between cost, value, and service quality.
Expertise:
- Assess the expertise of the team. They should be well-versed in Hong Kong’s compliance requirements and corporate laws. Experienced professionals can offer insightful advice and help your company meet all legal obligations.
Reputation and Feedback:
- Investigate the corporate secretary’s reputation by reviewing client feedback and testimonials. A reputable corporate secretary is more likely to deliver dependable and high-quality services.
Customer Support:
- Consider the quality of customer support. Efficient and responsive communication is vital for resolving any issues or questions that may arise.
By taking these factors into account, you can select a corporate secretary who will effectively support your company’s compliance and governance needs, ensuring smooth and efficient operations in Hong Kong.
Who can be a corporate secretary?
Both individuals and specialized firms can be appointed as corporate secretaries. However, there are a number of strict requirements that both must meet.
| Type of corporate secretary | Requirements |
| Individual | The individual must be a resident of Hong Kong and should have experience in corporate governance to perform the duties effectively. Incompetence in this role can lead to significant problems, including legal and regulatory issues. If an individual provides corporate secretarial services to multiple legal entities and receives payment for these services, such actions may be classified as a professional activity. This classification requires mandatory licensing under Hong Kong law. Without the appropriate Trust or Company Service Provider (TCSP) license, such activities would be considered illegal. |
| Legal entity (company) | A corporate secretary must be a resident of Hong Kong and hold a Trust or Company Service Provider (TCSP) license issued by the Hong Kong Companies Registry. A physical office in Hong Kong and employment appropriately qualified personnel is a mandatory requirement. Vita Liberta, Limited is a licensed company secretary that meets all the necessary requirements. |
What Skills Should a Corporate Secretary Have in Hong Kong?
To avoid making a mistake in choosing a corporate secretary, it is essential to ensure they possess the following skills and attributes:
- Compliance expertise:
- the corporate secretary must be adept at consulting the company’s management on compliance with government regulations. This includes staying updated on changes in Hong Kong legislation and ensuring the company adheres to all legal requirements.
- Operational and administrative management:
- strong operational and administrative management skills are crucial. The corporate secretary should be able to manage the company’s compliance and administrative responsibilities efficiently.
In Vita Liberta Limited we provide comprehensive corporate secretarial services, ensure compliance with all legal regulations allowing you to focus on developing your business. We are your reliable partner in Hong Kong.
FAQ
A corporate secretary in Hong Kong is a statutory function. It is the official representative of the company – without it, no business can operate legally. The secretary is responsible for ensuring that the company complies with regulations and laws, and also acts as a link between the company, its controlling persons and government agencies.
A corporate secretary has nothing to do with the usual concept of a “secretary”. It does not administer the office, answer calls or collect signatures from management.
Main duties of the Corporate Secretary:
- Company type assistance: advising on company type.
- Company registration: full support and document preparation.
- Registered office: providing an official address.
- Annual Return: filing NAR1.
- Business registration: ensuring and updating certificates.
- Payments: handling payments to relevant authorities.
- Register Maintenance: updating mandatory registers.
- Correspondence: managing government communications.
- Information Updates: updating company details.
- Annual meetings: organizing shareholder/director meetings.
- Stakeholder interaction: communicating with shareholders.
Generally, a director can also serve as the company secretary.
However, in a private company with only one director, that director cannot also be the company secretary.
Additionally, if a private company has only one director, it cannot appoint a corporate entity as its company secretary if that entity’s sole director is the same individual who is the sole director of the private company.
We have a special license from the Registrar of Companies and can legally operate in Hong Kong. Having significant experience in interacting with government agencies, we provide the best service to our clients, allowing them to do what is really important – business development. In turn, we fully assume all the responsibilities of a corporate secretary, ensuring timely compliance with all regulations and laws of the state.