![Select [Shell Company] 5 Key Benefits of a Shell Company | 8 Key Points to Note When Buying a Company [Shell Company] 5 Key Benefits of a Shell Company | 8 Key Points to Note When Buying a Company](https://www.genacct.com/wp-content/uploads/2023/09/4.webp)
Buying a shell company to do business in Hong Kong has a history of over 30 years. A ready-made company has already completed the registration process and has its company green box prepared, making it suitable for entrepreneurs who urgently need a limited company to sign contracts, sign leases, buy and sell property in the company’s name, or conduct business.
General Accounting has been established for nearly 20 years and has handled over 1,000 shell company transactions. Based on years of experience, we share key points to note when buying a company, hoping entrepreneurs can choose the most suitable way to set up a limited company.
What is a shell company?
In Hong Kong, a shell company (English: Shell Company) is generally defined as a ready-made company (English: Readymade Company), meaning a Hong Kong limited company that has completed the company registration process and had its company name confirmed, but has never operated.
The special feature of a ready-made company is that, in addition to completing registration, it also comes with a company green box, articles of association, a company steel stamp, and signature chops, etc.
More importantly, it already has a company registration certificate number (Unique Business Identifier) and a business registration certificate number. The new company owner can immediately use the purchased shell company name, company number, and business registration number to prepare a provisional agreement for sale and purchase of property.
Therefore, the “shell company property purchase” mentioned in this article refers to buying and selling property through a ready-made company (Shell Company/Readymade Company), not through a dummy company.
Is a shell company illegal?
Absolutely not. The reason people think shell companies are illegal is that the public often mistakenly equates shell companies with money laundering. In fact, a shell company transaction is simply the transfer of a non-operating ready-made company to new shareholders, and the transfer of company shares is 100% legal in Hong Kong.
Uses of Hong Kong ready-made shell companies:
Purchasing Property via a Company
Using a shell company to buy property in Hong Kong has a history of over 20 years. Since the latest Budget announced on February 28, 2024 removed the property market “spicy measures,” many professional investors have already been trading property through ready-made companies.
Signing contracts
An authorised person of a shell company can sign documents on behalf of the limited company, such as sale and purchase agreements, estate agent appointment forms, and tenancy agreements.
Business investment
After completing the ready-made company transaction, the new owner of the shell company can carry out any business investments, such as trading stocks and funds.
Doing business
Like any other Hong Kong limited company, a Hong Kong shell company is used to conduct business and generate profits. Its purpose is the same as a typical Hong Kong limited company, except that the company registration process is faster and guaranteed.
How can you confirm that a ready-made company has not operated?
The first director provides a non-operation certificate stating the name of the company’s first director, first secretary, and founding members, and declaring that the company has not operated and does not hold any assets, inventory, or property.
It also guarantees that no members or directors have signed any sale and purchase agreements, and confirms that the directors and founding members will be responsible for all liabilities incurred before the transfer of shares and directors.
Sample Non-Operation Certificate for a Shell Company
8 Key Points to Note When Buying a Company
1. Pay attention to the company incorporation date
Because one year after incorporation, the company must renew the business registration certificate and file the annual return, it is recommended to choose a limited company incorporated within the past six months.
2. Company business nature “corp”
As the company has never commenced business, a responsible professional company secretary firm should submit a Notice of Commencement of Business for a Corporation for the client, notifying the Inland Revenue Department that the company has started operations.
3. Articles of association
Ready-made companies use the template articles of association provided by the Companies Registry. If you have special requirements, it is recommended to choose a new company incorporation service.
4. Confirm the company secretary firm holds a Trust or Company Service Provider licence
A licensed company secretary firm must apply for a licence from the Companies Registry’s Trust or Company Service Provider (TCSP) Registry and is regulated under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, ensuring services and transactions are qualified and compliant.
5. Engage a reputable company secretary firm to handle the process
Some company secretary firms have taken back companies from clients who wanted to close them down and sold them as new ready-made Hong Kong limited companies. As those companies may have operated before, there may be hidden liabilities or business disputes.
6. Customer due diligence (Due Diligence)
A licensed company secretary firm must conduct background checks on information such as the directors, shareholders, and company secretary of both parties before signing the company sale and purchase agreement, to protect the interests of both parties.
7. It is not recommended to buy a ready-made company and then change its name
Because there is a fast-track company incorporation option, there is no need to waste time and pay a company name change fee.
8. Company purchase procedures and included documents
For the shell company transaction process, please refer to General Accounting’s procedures for buying a ready-made limited company.
Documents include:
♦ Certificate of Incorporation
♦ Business Registration Certificate
♦ Company sale and purchase agreement
♦ Form NSC1, ND2A, NR1
♦ Documents required for opening a bank account (certified by a practising accountant)
♦ company green box
5 Key Benefits of a Shell Company
1. Fast and time-saving: procedures can be completed within 1–2 working days
2. Buy and use immediately, with no need to wait for Companies Registry approval
3. Wide choice of company names, with over 500 shell companies
4. A shell company list is provided, so you do not need to worry about choosing a company name
5. 100% guarantee that the company has been successfully registered—after payment, you can immediately print business cards, purchase a company website, or design a trademark
FAQs on Shell Companies with Bank Accounts
1. Can you open a corporate bank account after buying a shell company?
Yes. Our Hong Kong company purchase service includes the documents required to open a corporate bank account (certified by a practising accountant).2. Does buying a company include a bank account?
No. It is also strongly not recommended to buy a shell company with an existing bank account, as an opened bank account may indicate the company has operated before.
3. Are the fees and documents for opening a corporate bank account in Hong Kong for a shell company the same as for a newly incorporated company?
Basically yes. However, because a ready-made company has undergone a share transfer, there will be an additional share sale and purchase agreement. Also, as ready-made limited companies have existed in Hong Kong for many years, banks are very familiar with the uses and process of shell companies.
Summary:
Operating through a shell company is one of the fastest ways to register a company, but you should carefully compare factors such as incorporation fees, incorporation time, and whether the company name is suitable. The key is to engage an established company secretary service firm that holds a Company Service Provider licence to ensure the transaction complies with Hong Kong company law.
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