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Trust and company service provider in Hong Kong Licence No.: TC006906
Hong Kong Charitable Organization (S.88)
Opening a Hong Kong Recognized Charitable Organization (S.88)
In Hong Kong, the most common French structure for establishing a non-profit or charitable organization eligible for tax exemption is a Company Limited by Guarantee (Chapter 112) under Section 88 of the Hong Kong Inland Revenue Ordinance – commonly known as "License No. 88". Non-profit organizations holding an License No. 88 are exempt from withholding profits tax, and individuals or companies applying through this license can file tax returns, which is crucial for securing continued social donations and financial support. Our professional team is familiar with the requirements of the Companies Registry and the Inland Revenue Department, and has assisted numerous charitable organizations, chambers of commerce, religious and educational foundations in completing their applications. Our extensive experience helps you achieve your goals faster.
What is S88?
The tax exemption under Section 88 of the Hong Kong Inland Revenue Ordinance is not a separate "license," but rather a tax-exempt status granted by the Inland Revenue Department to qualified charitable organizations. Only organizations established purely for charitable purposes, benefiting the public interest, and not involving national security risks are eligible for confirmation by the Inland Revenue Department. Confirmed organizations enjoy the following key benefits:
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Profits Tax Exemption: The organization itself is exempt from profits tax on income qualifying for charitable purposes.
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Tax Deduction for Donations: Individuals or companies donating to the organization can claim a deduction for donations (not less than HK$100 per year) when calculating tax.
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Business Registration Fee Savings: Confirmed charitable organizations are exempt from business registration fees and related levies.
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Enhanced Public Trust: Charitable organizations with the Inland Revenue Department's License No. 88 are registered in the government's "List of Tax- Exempt Charitable Organizations," which is highly beneficial for public accountability and attracting donations.
Why Choose a Limited Company of Guarantee?
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The vast majority of applicants for License No. 88 are limited companies of guarantee. Here are the core characteristics of this type of company:
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No share capital: The organization consists of "guarantee members," who only need to commit to a symbolic guarantee amount (usually HK$1 to HK$100) upon the company's liquidation, without any actual capital contribution.
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Non-profit nature: All income and assets must be used entirely for the charitable purposes stipulated in the articles of association and cannot be distributed to members or directors.
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Independent legal entity: It has independent legal person status and can own assets, sign contracts, hire employees, and litigate in its own name.
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Strong public credibility: Charitable organizations established as limited companies of guarantee have a formal structure, high transparency, and are more likely to obtain government funding and public donations.
S88 Application Requirements
To obtain confirmation from the Inland Revenue Department, the organization must meet the following conditions:
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Legal Status: It must operate with a legal and compliant corporate structure, most commonly a limited company of guarantee.
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Purpose Compliance: The sole purpose of the organization must be for charitable purposes, covering the following four categories—poverty alleviation, education promotion, religious promotion, and other public purposes beneficial to Hong Kong society.
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Operational Compliance: The articles of association must stipulate a prohibition on distributing profits to members and must include clauses allowing the transfer of remaining assets to other recognized charitable organizations upon liquidation; all annual income and profits must be used solely for charitable purposes and cannot be used for non-charitable purposes.
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National Security Requirements: The organization must not be involved in activities detrimental to national security. This is a core requirement added after the 2021 revised guidelines, and the Inland Revenue Department will conduct periodic reviews.
Our Service Process and Scope
We offer a seamless, one-stop service covering every step from assisting with incorporating a limited liability company (LLC) to obtaining tax-exempt status under License No. 88:
Step 1: Initial Consultation and Assessment
Understanding the organization's charitable purpose, scope of operations, and target beneficiaries. Assessing compliance with the Inland Revenue Department's requirements for charitable organizations. Determining the appropriate charitable purpose category (one of the four main charitable purposes).
Step 2: Company Name Search and Document Preparation
Conducting a company name search with the Companies Registry. Preparing necessary company registration documents, including the appointment of the first director and secretary, registered address, etc. Providing customized Articles of Association to ensure compliance with the Companies Ordinance and the Inland Revenue Department's stringent requirements for License No. 88.
Step 3: Incorporation of the Limited Liability Company
Submitting the Incorporation Form (NNC1G) and Articles of Association to the Companies Registry. Simultaneously processing the Business Registration Certificate. Obtaining the Certificate of Incorporation and Business Registration Certificate. Creating a complete set of green company documents (including the company seal, signature stamp, and round stamp).
Step 4: Simultaneous Application for License No. 88 Tax Exemption
Simultaneously with company registration, submit an application for tax exemption under license plate number 88 to the Inland Revenue Department to shorten the overall time. Submit a detailed 12-month activity plan and budget to demonstrate that the organization will effectively carry out charitable work. Submit draft articles of association, director and member information, financial budget, and other documents as required by the Inland Revenue Department. Follow up on any inquiries and supplementary document requests from the Inland Revenue Department.
Step 5: Ongoing Compliance and Secretarial Support
Assist in responding to the Inland Revenue Department's periodic audits to ensure compliance status is maintained.. Act as company secretary, processing annual returns and maintaining statutory records. Provide accounting and bookkeeping services (optional, depending on client needs). Maintain a register of significant controllers and act as their designated representative to fully fulfill statutory responsibilities under the Companies Ordinance.
Preparations
Required Documents and Conditions List:
During the application process, clients need to provide the following information and documents:
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Item Description Institutional Purpose Statement. Briefly describe the institution's charitable goals and expected beneficiaries (which of the four major charitable purposes it belongs to)
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12-Month Activity Plan and Budget Showcase the charitable activities the institution will actually carry out in the coming year and its income and expenditure budget
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Draft Articles of Association We will assist in drafting articles of association that meet the Inland Revenue Department's requirements
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Identification Documents of Directors, Company Secretary, and Members' Passport, Hong Kong Identity Card, or Mainland Travel Permit for Hong Kong and Macao Residents; Proof of Address (Utility Bill or Bank Statement) Registered Address Must be a physical address within Hong Kong.
Our Advantages
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Extensive Expreience: We have assisted numerous charitable organizations, chambers of commerce, educational institutions, and religious foundations in applying for Type 88 licenses. We are familiar with the Inland Revenue Department's approval standards and potential inquiries.
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Customized Articles of Association Drafting Experience: We have handled the detailed articles of association for various charitable purposes, accurately targeting the key approval points.
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Simultaneous Application Strategy: We handle the registration of the sponsoring company and the Type 88 license tax exemption simultaneously, shortening the overall preparation time.
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One-Stop Professional Support: Covering company registration, tax exemption, secretarial services, accounting and tax filing, and compliance review, meeting all subsequent needs.
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Trust or Company Service Provider (TCSP) License: Our company holds a Hong Kong TCSP license (No.: TC006906), ensuring compliance and reliability, and is regulated by the Companies Registry.
FAQs 常見問題
Whatsapp:
(852) 5592 0208
Telephone:
(852) 2312 2733
Monday to Friday
9am to 6pm