If a firm carries on a business in regulated activities in or from Hong Kong, or holds itself out as carrying on such a business, it is required to set up a presence in Hong Kong and be appropriately licensed by The Hong Kong Securities and Futures Ordinance (the SFO) Cap. 571. Regulated activities as defined by the Securities and Futures Ordinance are as follows (except for banks which are licensed under the Banking Ordinance and are primarily regulated by the Hong Kong Monetary Authority):

 License

Regulated Activities

Capital Requirements

Type 1

Dealing in securities

10M (app. US$1.3M)

Type 2

Dealing in futures contracts

5M (app. US$641K)

Type 3

Leveraged foreign exchange trading

30M (app. US$3.9M)

Type 4

Advising on securities

5M (app. US$641K)

Type 5

Advising on futures contracts

5M (app. US$641K)

Type 6 x

Advising on corporate finance

5M (app. US$641K)

Type 7

Providing automated trading services

5M (app. US$641K)

Type 8

Securities margin financing

10M (app. US$1.3M)

Type 9

Asset management

5M (app. US$641K)

Type 10

Providing credit rating services

5M (app. US$641K)

Hong Kong Securities and Futures Commission License Key Features

  1. Only companies incorporated in Hong Kong or an overseas company registered with the Companies Registry of Hong Kong (Applicant Company) needs to obtain a licence if any of its proposed activities fall within the definition of one of the regulated activities.
  2. The individuals who carry on regulated functions on behalf of a licensed corporation are required to be licensed representatives accredited to the licensed corporation (LRs).
  3. An Applicant Company will need to appoint at least two (2) such individuals as responsible officers (ROs).
  4. At least one (1) RO must be an executive director of the corporate entity that actively participates in or is responsible for directly supervising the regulated activity for which they are licensed.

Hong Kong Securities and Futures Commission License Legal Requirements

Requirements

Description

General

  • Corporate  vehicle permitted

Hong Kong Company

  • Local physical office required

No

  • Validity of Licence

2 Years

Share capital or equivalent

  • Minimum paid up capital

Depending on the type of regulated activity, paid-up capital and liquid capital not less than the specified amounts must be maintained at all times.

Directors

  • Minimum number

2

  • Corporate directorship allowed

Yes

  • Local director required

No

Shareholders

  • Minimum number

2

  • Corporate shareholders allowed

Yes

  • Local  shareholders required

No

Service Providers Required

  • Company Secretary

Yes

Accounts

  • Requirements to File

Yes

Hong Kong Lender License Tax Treatment

There is no capital, value added or inheritance taxes in Hong Kong, nor any stamp or document duties except in respect of Hong Kong real property.

Hong Kong Lender License Duration to Set Up

2 – 3 months

Hong Kong Lender License Distinctive Benefits

  • There is no capital, value added or inheritance taxes in Hong Kong, nor any stamp or document duties except in respect of Hong Kong real property.
  • Hong Kong Lender License allow for a wide range of activities within it scope.
  • There is no requirements for presence of a physical office.

Why US (Key Strengths)

  1. We will advise you on the optimal legal structure for your requirements, size, expectations and circumstances.
  2. Valsen will assist to complete every form for each process in the best way we know how (Based on our many years’ experience with various regulators and service providers across the world)
  3. We are very hands on in the post filing period checking with re regulator and service providers and updating you regularly.
  4. Any queries raised by the regulators and service providers during processing will be quickly synthesized by us and we shall craft the right responses to move the process forward fast.
  5. We have a full in-house compliance support for all compliance requirements with the regulator and service providers