How to Set Up a Non-Profit Organisation in Hong Kong?
The Difference Between a Charity and a Non-Profit Organisation
A non-profit organisation in Hong Kong operates on the premise that nothing from the corporation’s net profit comes from donations or business activities. Further, membership fees will mostly benefit any individual who participates in the organization. Even though all charities operate not for profit, not all non-profit organisations are charities.
An example of how to distinguish a non-profit organisation and a charity is this. Many organisations, such as clubs and homeowners associations are considered non-profits and even though they do help people, they are not charities because they do not benefit the general public. Only organisations which do benefit the general public are considered charities.
Examples of a charity include churches, education organisations, hospitals, organisations which provide support for universities or colleges and other governmental units in Hong Kong.
Why Start a Non-Profit Organisation in Hong Kong?
A non-profit organisation offers services, research or knowledge for the benefit of the general public. The services and knowledge offered mostly using the organisation’s own funds.
Like their name, non-profit organisations do not keep the profits for themselves. Instead, they reinvest funds and diversify it into other programs, research or services.
Besides the satisfaction and the knowledge that these organisations committed to helping people, the other advantages of starting a non-profit organisation include:
- These organisations have tax benefits
- They are a legal entity
- The organizations have a limited liability
- They are eligible for private and public grants
How to Start a Non-Profit Organisation in Hong Kong
Non-profit organisations which serve the purpose of providing aid or assistance in sectors like education or health care, they have to qualify as a charity before they can be exempted from the Hong Kong Inland Revenue Department.
You can easily start a non-profit organisation in the form of a trust. An investor can simultaneously open a Hong Kong company too. Charities in Hong Kong are technically limited liability companies. To start a non-profit organisation in Hong Kong, you will need to provide the following documentation:
- A copy of your passport and passport number
- The name of your shareholders and directors
- A copy of the official certificate as proof of residency
- A completed questionnaire with standard questions, including your address
You will also need to ensure that the chosen name of your non-profit organisation is available. Once your non-profit organisation has been successfully incorporated, you will be issued with a Certificate of Incorporation from the Hong Kong Companies Registry.