- \n
- Trust;<\/li>\n
- A society established under the Societies Ordinance (Cap. 151);<\/li>\n
- A company limited by guarantee incorporated under the Companies Ordinance (Cap. 622);<\/li>\n
- A statutory body established by the Hong Kong legislature.<\/li>\n<\/ul>\n[\/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Which of these structured routes should you follow when starting a charity?”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]Of the four most common structures, the most popular and conventional route is to establish a Charity as a company limited by guarantee. One of the key advantages of this route is that the Charity is a separate legal entity from its members. This protects the personal finances of the members of the company, and their liability would be limited to the sum that they agree to contribute (\u201cguarantee\u201d) toward the charity\u2019s assets in the event of its closure or when it is unable to meet its obligation. Companies limited by guarantee are currently the most popular type of charitable organization in Hong Kong recognized by the IRD as tax-exempt Charities.[\/vc_column_text][\/vc_column][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”0px” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” advanced_gradient_angle=”0″ gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/2″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid” gradient_type=”default”][vc_row_inner column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” left_padding_desktop=”20%” left_padding_tablet=”10%” text_align=”left” row_position=”default” row_position_tablet=”inherit” row_position_phone=”inherit” overflow=”visible” pointer_events=”all”][vc_column_inner column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ background_image=”2354″ background_image_position=”center center” enable_bg_scale=”true” background_image_loading=”default” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” advanced_gradient_angle=”0″ gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” parallax_bg=”true” parallax_bg_speed=”very_subtle” border_type=”simple” column_border_width=”none” column_border_style=”solid” gradient_type=”default”][divider line_type=”No Line” custom_height=”90vh” custom_height_tablet=”70vh” custom_height_phone=”60vh”][\/vc_column_inner][\/vc_row_inner][vc_row_inner column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” translate_y=”-50%” translate_x=”30%” text_align=”left” min_width_desktop=”20vw” min_width_tablet=”30vw” min_width_phone=”30vw” row_position=”absolute” row_position_tablet=”inherit” row_position_phone=”inherit” top_position_desktop=”50%” left_position_desktop=”0″ left_position_tablet=”-10%” left_position_phone=”-10%” class=”fungyu-window” zindex=”50″ overflow=”visible” pointer_events=”all”][vc_column_inner column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ background_image=”650″ background_image_position=”left center” background_image_loading=”default” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” advanced_gradient_angle=”0″ gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”parallax” animation_movement_type=”default” column_parallax_intensity=”2.25″ persist_movement_on_mobile=”true” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_color=”#fb656c” column_border_style=”solid” gradient_type=”default”][divider line_type=”No Line” custom_height=”50vh” custom_height_tablet=”40vh” custom_height_phone=”35vh”][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]\n\r\n
[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”full_width_background” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_color=”#f7f5f3″ scene_position=”center” top_padding=”100″ constrain_group_1=”yes” bottom_padding=”100″ top_padding_tablet=”30″ constrain_group_3=”yes” bottom_padding_tablet=”30″ top_padding_phone=”30″ constrain_group_5=”yes” bottom_padding_phone=”30″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” advanced_gradient_angle=”0″ overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_row_inner column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” text_align=”left” row_position=”default” row_position_tablet=”inherit” row_position_phone=”inherit” overflow=”visible” pointer_events=”all”][vc_column_inner column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/6″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][\/vc_column_inner][vc_column_inner column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”2\/3″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][split_line_heading animation_type=”line-reveal-by-space” font_style=”h6″ text_color=”#fb656c” line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”What are the necessary steps in order to start a charity?”][\/split_line_heading][vc_column_text css_animation=”bottom-to-top”]\n
- \n
- Decide on the type of organization to register (trust, society or company limited by guarantee);<\/li>\n
- (Assuming company limited by guarantee is adopted), decide on the details of the company including:<\/li>\n<\/ol>\n
- \n
- Name: cannot be identical to any existing organizations;<\/li>\n
- Principal activities: Scope and details of the company\u2019s main operations;<\/li>\n
- Registered address in Hong Kong;<\/li>\n
- Company secretary: An individual who ordinarily resides in Hong Kong or a company that maintains an address in Hong Kong,;<\/li>\n
- Structure and duties of the board (or executive committee, or any name chosen to refer to the organization\u2019s governing body);<\/li>\n
- Membership structure (category and right of members, amount of guarantee each member is going to provide, and rules and manners governing membership).<\/li>\n<\/ul>\n[\/vc_column_text][vc_column_text css_animation=”bottom-to-top”]In order to incorporate a company limited by guarantee, it is necessary to obtain approval from the Companies Registry. Unlike an ordinary company limited by shares for commercial purposes, a company limited by guarantee (charitable or otherwise) must have its incorporation documents, particularly the Articles of Association, reviewed by the Companies Registry before it can be incorporated. Once the company limited by guarantee is incorporated, the next important step to submit an application to the IRD to qualify for Charitable status (i.e. to become recognized as a charity) under Section 88 of the Inland Revenue Ordinance. While any company or institution can refer to themselves as a Non- Profit organization, only those that have obtained the IRD\u2019s approval can describe themselves as a Charity.[\/vc_column_text][vc_column_text css_animation=”bottom-to-top”]To grant Charitable Status, the IRD generally needs to review the following documentation:<\/p>\n
- \n
- A copy of the relevant certificate of registration (e.g., certificate of incorporation);<\/li>\n
- A certified true copy of the instrument and rules governing its activities, i.e. the Articles of Association in the case of a limited company, the Trust Deed in the case of a trust, or the Constitution in the case of a society;<\/li>\n
- A copy of its accounts for the last financial year (if the organization has been established for 18 months or more);<\/li>\n
- A list of any activities which have been carried out over the past 12 months (or less, if appropriate), and a list of planned activities for the next 12 months following the date of application;<\/li>\n
- A list of members of governing body (e.g. directors, trustees, etc.).;<\/li>\n
- A full explanation of how and why the organization has the ability to achieve its planned activities as described in part (D) above.<\/li>\n<\/ol>\n
If the application is submitted prior to setting up the organization, it should include the application letter, a draft of the instrument and rules governing its activities (i.e. the draft Articles of Association); a list of the planned activities for the next 12 months from the date of establishment or date of application, a list of founding members \/ settlors (for trusts only) and proposed members of governing body (e.g. directors, trustees, etc.)[\/vc_column_text][\/vc_column_inner][vc_column_inner column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/6″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]\n\r\n
[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”full_width_background” full_screen_row_position=”middle” column_margin=”none” equal_height=”yes” content_placement=”middle” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_color=”#ffffff” scene_position=”center” top_padding=”100″ constrain_group_1=”yes” bottom_padding=”100″ top_padding_tablet=”30″ constrain_group_3=”yes” bottom_padding_tablet=”30″ top_padding_phone=”30″ constrain_group_5=”yes” bottom_padding_phone=”30″ bottom_margin=”80″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” id=”home” advanced_gradient_angle=”0″ overlay_strength=”0.5″ gradient_direction=”top_to_bottom” shape_divider_position=”bottom” bg_image_animation=”none” shape_type=”straight_section” gradient_type=”default”][vc_column column_padding=”padding-4-percent” column_padding_tablet=”no-extra-padding” column_padding_phone=”no-extra-padding” column_padding_position=”right” column_element_spacing=”20px” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” zindex=”100″ advanced_gradient_angle=”0″ gradient_direction=”left_t_to_right_b” overlay_strength=”0.3″ width=”1\/2″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid” offset=”vc_col-xs-12″ gradient_type=”default”][vc_column_text]There are certain requirements regarding a charity\u2019s governing instrument that the IRD will review in an organization\u2019s Articles of Association. The IRD will ensure that the articles contain clauses to the following effect:<\/p>\n
- \n
- Clearly and precisely stating the charity\u2019s objectives; the purpose(s) of the charity\u2019s formation.<\/li>\n
- Limiting the application of its funds towards the attainment of its stated objects.<\/li>\n
- Prohibiting the distribution of its incomes and properties amongst its members.<\/li>\n
- Prohibiting members of its governing body (directors, trustees, executive committee members) from receiving remuneration (monetary compensation).<\/li>\n
- Specifying how assets are to be dealt with upon dissolution; for instance, the donation of remaining assets to other charities.<\/li>\n
- The maintenance of sufficient records of income and expenditure which includes donation receipts, accounting books, and annual financial statements.<\/li>\n<\/ol>\n[\/vc_column_text][vc_column_text]There is, however, an exception to the prohibition of remuneration (requirement D) where the charity can demonstrate that the payment to its member(s) is necessary in an exceptional circumstance, provided that the conditions made in the charity\u2019s governing instrument are fulfilled:<\/p>\n
- \n
- The remunerated members of the governing body have special qualifications which are not otherwise available to the charity, and would make for its more effective administration;<\/li>\n
- The remunerated members are absent from meetings and discussions regarding their own appointment, conditions and services, and remuneration and must not vote on these matters;<\/li>\n
- The number of such remunerated members must be less than the majority of the quorum (members of the charity\u2019s governing body).<\/li>\n<\/ul>\n[\/vc_column_text][vc_column_text]Philanthropic activity in Hong Kong has recently been on the rise. The social and economic adversity of the past two years has spurred many sectors of society to take decisive action in order to provide much needed support to the vulnerable, as the community begins on the road to recovery. Ordinary people increasingly pool their resources towards commonly held objectives, and wealthy families seek to organize their own charitable organizations in order to support frontline medical workers and those in need, while pursuing their values. Hong Kong is an ideal international jurisdiction in which to set up a charitable organization, because of the region\u2019s tax benefits, efficiency of operations and regulatory environment. Companies limited by guarantee are generally the most straightforward route for most charitable enterprises, although in some cases a society or trust may be preferable. For a more detailed discussion, we are always available for a free initial consultation at any of our offices.[\/vc_column_text][\/vc_column][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.5″ width=”1\/2″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid” offset=”vc_col-xs-12″][vc_row_inner column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” text_align=”left” row_position=”default” row_position_tablet=”inherit” 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custom_height_phone=”300px”][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]\n\r\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”full_width_content” full_screen_row_position=”middle” column_margin=”default” equal_height=”yes” content_placement=”middle” column_direction=”default” column_direction_tablet=”column_reverse” column_direction_phone=”column_reverse” scene_position=”center” top_padding=”6%” bottom_padding=”6%” top_padding_tablet=”30″ constrain_group_3=”yes” bottom_padding_tablet=”30″ left_padding_tablet=”8%” constrain_group_4=”yes” right_padding_tablet=”8%” top_padding_phone=”30″ constrain_group_5=”yes” bottom_padding_phone=”30″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” advanced_gradient_angle=”0″ overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”padding-8-percent” column_padding_tablet=”no-extra-padding” column_padding_phone=”no-extra-padding” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” el_class=”text-icon-column” advanced_gradient_angle=”0″ gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/2″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid” gradient_type=”default”][divider line_type=”No Line” custom_height=”0″ custom_height_tablet=”30px” custom_height_phone=”30px”][split_line_heading animation_type=”line-reveal-by-space” font_style=”h3″ text_color=”#212d84″ line_reveal_by_space_text_effect=”default” content_alignment=”default” mobile_content_alignment=”inherit” link_target=”_self” text_content=”Why work with us?”][\/split_line_heading]
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<\/div><\/div>[nectar_cta btn_style=”arrow-animation” heading_tag=”span” text_color=”#212d84″ button_color=”default” button_border_color=”#212d84″ button_border_color_hover=”#fb656c” button_border_thickness=”1px” link_type=”new_tab” alignment=”left” alignment_tablet=”default” alignment_phone=”default” constrain_group_3=”yes” constrain_group_4=”yes” display=”block” display_tablet=”inherit” display_phone=”inherit” link_text=”Download PDF version” url=”\/wp-content\/uploads\/2022\/09\/Starting-a-Charity-in-Hong-Kong-Options-and-Requirements_eng_2203.pdf” margin_top=”80″ padding_top=”15″ padding_bottom=”15″ padding_left=”40″ padding_right=”40″][\/vc_column][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”0px” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” 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