Company incorporation has evolved; it’s big business, particularly in regions such as Asia where the climate favours and encourages businesses to set up and/or register subsidiaries.
To compete on a global scale company incorporation agents are fast becoming a one stop shop, not only registering businesses, but continuing to provide company secretarial, local directors, registered office and ongoing compliance and reporting support. In this roundtable, we aim to delve deeper into the evolution of company incorporation providers and has invited three other financial service experts to give us their view point on what they are experiencing in Asia, the Caribbean and Jersey.
Leanne Ho, Managing Director for Hawksford - Hong Kong, led the discussion that was originally published in the December 2016 edition of Acquisition International. The key themes included:
Over the years, many corporate service providers have evolved from a mere executioner into a corporate compliance advisor and business planner for clients.
Most corporate service providers compete strongly on fees and speed of incorporation. However, this does not necessarily guarantee that a client will be given the advice and service that is right for the administration and development of their company thereafter. As a legal entity, the company and its directors must comply with the regulatory requirements of the jurisdiction. It is extremely important for a client to ensure that a corporate service provider is carefully chosen based on both their service and their knowledge when it comes to meeting ongoing obligations.
In Singapore, the leading industries setting up subsidiaries in the last year have been trading, financial services, management consulting and IT. We are also seeing a growing trend in the fintech market, with many companies looking to establish themselves in this arena, supported by accelerators and venture capitalists. Even Singapore authorities are jumping on the bandwagon; the Monetary Authority of Singapore has just signed Memorandums of Understanding (MOUs) with the five polytechnics in Singapore to review and enhance the curricula, with the view to equipping their graduates with skill sets that will prepare them for the new fintech related jobs. In Hong Kong and China, we have noticed an increased growth in the ecommerce platform for various industries including retail, travel, education, and financial.
We see a good mix of investors coming to Singapore and Hong Kong from the UK, USA, Australia and Southeast Asia. In recent years, there has been an increase of investors' presence from Mainland China as well.
For the most part, company secretaries or company formation agents are the first party a business owner will approach for advice on how to set up their business as a legal entity. Providing these clients with relevant and accurate advice will help them build a compliant and strong fundamental structure, supporting the future growth of their business. In Hong Kong, the appointment of a local person/ corporation as a company secretary for a business is mandatory. Similarly, in Singapore, a firm must have a company secretary who is aware of the local requirements/laws. They are statutory watchdogs who ensure the annual filing with the Companies Registry is complete. The role is now evolving, and often includes more business advisory services.
Incorporation of a LLC subsidiary in Hong Kong is generally a straight forward process. There is no minimum capital or appointment of a local resident director requirement for a Hong Kong company. The only mandatory requirement is that a Hong Kong company must appoint a local individual or corporation as the company secretary and this is where it is important for an overseas company to ensure that a reputable service provider is engaged to provide the company secretarial services. This ensures the client is proactively updated with all relevant corporate regulatory requirements and so will not incur any unnecessary penalty for non-compliance issues.
Corporate services in Asia have evolved over the years. Where previously the agents were there to take instructions and act accordingly, now they have to be savvy and understand clients' requirements as a whole to better advise them. Other than costs, a company should also take into account the responsiveness of the agent in dealing with requests or enquiries and the quality of advice and service provided.
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