No director residency requirement -- but a mandatory local secretary
Hong Kong's Companies Ordinance (Cap. 622) contains no nationality or residency restriction on company
directors at all: a foreign national can hold 100% of the shares and serve as a company's sole director,
without holding a Hong Kong identity card or residing in Hong Kong. This is a materially more open
position than several other jurisdictions this platform covers -- Fiji's confirmed statutory
local-director requirement, or Ireland's EEA-wide director-residency rule under its Companies Act 2014.
Hong Kong's structural check works differently: the company secretary position does require local
residency (if an individual, they must be ordinarily resident in Hong Kong; if corporate, the entity must
hold a Trust or Company Service Provider licence with its principal place of business in Hong Kong), and
critically, a sole director cannot also act as company secretary under Cap. 622 -- so an all-foreign-owned
Hong Kong company must still appoint a separate, Hong Kong-based secretary to handle statutory
compliance and filings.
Incorporating an Indian company as an NRI founder based in Hong Kong
An NRI in Hong Kong setting up an Indian private limited company follows the same Companies Act, 2013
framework as a founder based anywhere else -- including the requirement that at least one director be a
person who has stayed in India for a specified minimum number of days in the preceding calendar year.
This resident-director requirement is commonly satisfied by bringing in an India-based co-director or
professional nominee, mirroring in reverse Hong Kong's own local-secretary (rather than local-director)
requirement.
FDI reporting and repatriating business profits
Foreign investment into an Indian company by an NRI or a Hong Kong-incorporated entity must comply
with FEMA's FDI reporting requirements, generally through the RBI's online reporting portal, within the
prescribed timelines after each equity issuance or transfer. Repatriating profits or dividends from the
Indian company back to Hong Kong is generally permitted through normal banking channels, subject to
applicable withholding tax under Indian law and the India-Hong Kong DTAA's dividend article, currently
5%.
Common mistakes NRI founders and investors in Hong Kong make:
- Assuming Hong Kong's no-local-director rule means no local presence is needed at all -- a
Hong Kong-resident (or TCSP-licensed) company secretary is still legally required, separate from the
director question.
- Attempting to have a sole director also act as company secretary, which Cap. 622 does not
permit.
- Not appointing a resident director for an Indian company back home, causing compliance issues
under India's Companies Act, 2013.
