24 July 2019
Can Hong Kong investors incorporate single-person limited liability companies in mainland China? Are there any considerations that should be borne in mind?
Hong Kong investors can incorporate single-person limited liability companies in mainland China while either acting on their own behalf as an individual or via a legal entity. It should, however, be noted that an individual may only establish one single-person company and that company may not incorporate another single-person company. Additionally, if the sole shareholder / director of such a company cannot clearly establish that their personal assets are wholly separate from the company’s assets, they will be deemed to be jointly liable for any debts incurred by the company. In light of this, would-be investors considering going down this particular route should be aware of the potential risks involved.