Foreign businesses and investors often choose Hong Kong as a preferred jurisdiction to establish their businesses. In order to fulfill the requirements for company formation in Hong Kong, it is mandatory to have at least one director for the company.
Hong Kong company directors must fulfill some basic requirements
Foreign businesses and investors commonly choose to set up two types of companies in Hong Kong: Company Limited by Shares and Company Limited by Guarantee.
A Hong Kong company can have a director who is a person or a company, but at least one director must be a natural person. There is no maximum limit on the number of directors allowed. For a Limited by Shares company, at least one director is required, while a Limited by Guarantee company requires at least two directors.
However, in special cases, a corporation cannot be a director of public or private companies listed on the Stock Exchange of Hong Kong. This also applies to Limited by Guarantee companies where a corporation serves as a director.
Directors can be of any nationality and can be either Hong Kong residents or foreigners. They must be 18 years or above and cannot be insolvent or have been convicted of any dereliction of duties.
Publicity information
Under Hong Kong Company Laws, the directors, shareholders, and company secretaries of a company in Hong Kong are required to have their information disclosed to the public. This includes maintaining a record of registration for directors, which is accessible to the public. The register must contain personal information filed with the Registrar of Companies, in addition to the director’s name.
It is a legal requirement to provide the details of company officers to the Registrar of Companies. However, if a new company director wishes to maintain their information’s confidentiality, they can use the professional services of Hong Kong Company Formation Services to appoint a nominee shareholder and nominee director.
Hong Kong Director’s Duties
The Hong Kong Companies Registry has specified the responsibilities of directors in Hong Kong, which can be summarized as follows:
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Act in good faith for the benefit of the company as a whole: Directors must act in the best interests of the company and its shareholders, ensuring fairness and impartiality in decision-making.
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Use powers for the proper benefit of members: Directors must not abuse their power for personal gain and must ensure their actions align with the company’s objectives.
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Delegate powers only with proper authorization and exercise independent judgment: Directors are only permitted to delegate power if authorized, and must still exercise independent judgment in the execution of their duties.
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Exercise care, skill, and diligence: Directors must demonstrate a high level of care, skill, and diligence in the performance of their duties.
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Avoid conflicts of interest: Directors must ensure their personal interests do not conflict with the interests of the company.
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Do not engage in transactions in which directors have an interest except as permitted by law: Directors must not engage in transactions with the company unless authorized and disclosed in compliance with the law.
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Do not gain advantage from their position: Directors must not use their position or power to gain personal benefits or cause harm to the company.
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Do not make unauthorized use of company property or information: Directors must not use company assets or information without consent and proper disclosure.
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Do not accept personal benefits from third parties because of their position as a director.
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Observe the company’s constitution and resolutions.
- Keep accurate accounting records.