Can my business partner and I both be directors and shareholders in a Hong Kong company?

 Yes—two co-founders can both be directors and shareholders of the same Hong Kong private limited company. Hong Kong imposes no residency or nationality limits for directors or shareholders; the only “local” requirement is a Hong Kong-based company secretary plus standard compliance like an annual return (within 42 days of each anniversary) and a Significant Controllers Register (SCR).

Hong Kong Company Setup for Co-Founders: Two Directors, Two Shareholders—Is It Allowed?

If you’re building together, Hong Kong makes it easy to own and run a company together. The law requires at least one natural-person director, but you can appoint two (or more) directors—and those directors can also be the shareholders. There’s no rule that any director must live in Hong Kong or hold a Hong Kong passport.

What Hong Kong does mandate is a company secretary based in Hong Kong like ATHENASIA and a handful of annual filings that keep your entity in good standing.

Below is a practical, search-friendly guide to structure the co-founder relationship—covering the rules, the paperwork, and the governance tricks that keep you moving when things get complicated.

The short legal answer founders want

• Two founders can both be directors. Every private company must have at least one director who is a natural person; adding a second director (your partner) is fine, and neither needs to be a Hong Kong resident.

• Two founders can both be shareholders. Private companies may have 1–50 members (shareholders). Two is squarely within the rules.

• Local requirement: You must appoint a company secretary who (if an individual) ordinarily resides in Hong Kong, or (if a corporate secretarial firm) is registered in Hong Kong.

• Important caveat: If you ever reduce to one director, that sole director cannot also be the company secretary. With two directors, one of you could be secretary—but most foreign-run companies hire a corporate secretary to avoid pitfalls.

• Annual admin you can’t skip: File the Annual Return (Form NAR1) within 42 days of each incorporation anniversary; keep the SCR at the registered office for inspection by law enforcement on demand.

What “private company” means (and why it matters)

Hong Kong recognizes “private” and “public” companies. For a company to be private, its articles must (i) restrict transfer of shares, (ii) limit members to 50, and (iii) prohibit any invitation to the public to subscribe for shares or debentures. Most startups choose private status because it simplifies life and keeps control tight among founders and investors.

Implication for co-founders: the “limit of 50” gives you ample room for angel rounds and early employees while preserving private-company flexibility.

Two-founder structures that actually work

There isn’t a single “correct” split. Pick the one that fits your risk, speed, and fundraising plan—and crystallize it in your Articles and Shareholders’ Agreement.

1) 50:50, both as directors

Why founders pick it: feels fair; signals equal commitment. Risk: deadlock. If votes split, nothing happens.

Fixes that work:

• Reserved matters: list big-ticket decisions (new share issues, debt, material contracts, IP transfers, changing business scope) that require supermajority or unanimous shareholder consent.

• Deadlock path: time-boxed negotiation → mediation → if still stuck, a buy-sell (shotgun) or Russian roulette clause so someone can exit at a fair price.

• Chair casting vote: give a casting vote to the chair only on day-to-day operational ties, never on reserved matters.

2) 60:40 (or 51:49), both as directors

Why founders pick it: avoids deadlock and speeds execution.Risk: minority protection.Fixes that work:

• Pre-emption rights on new share issues and transfers.

• Tag/drag rights for exits (the 40% can “tag” along; the 60% can “drag” the minority at the same terms in a bona fide sale).

• Consent rights for certain actions so the minority isn’t steamrolled.

3) Same economics, different voting (dual-class or class rights)

Why founders pick it: one founder steers while economics remain equal. How: Hong Kong’s regime supports no-par value shares and share classes with different rights—capture voting or dividend preferences in the Articles. (Use counsel to draft class terms cleanly.)

4) 50:50 with an independent third director

Why founders pick it: keeps equality but breaks ties. How: appoint a trusted independent director with a clear board charter (quorum, meeting cadence, and which matters go to shareholders).

5) One executive, one non-executive

Why founders pick it: clarifies day-to-day authority if only one founder is hands-on. How: put the exec on payroll with KPIs; give the non-exec robust information rights and board vote.

All of these are fully compatible with Hong Kong law so long as you maintain ≥1 natural-person director and a Hong Kong-based company secretary.

Who can hold which hats (and what the rules say)

• Director: You (and your partner) can both be directors. Nationality/residency are irrelevant in the statute. Corporate directors are permitted for private companies, but the company must still have at least one human director.

• Shareholder: Either or both of you; total members must stay ≤50 to remain private.

• Company Secretary: An individual living in Hong Kong or a Hong Kong-registered corporate provider. This is the one “local” seat you must fill.

• Sole-director trap: If you ever have only one director, that person cannot also act as company secretary. With two directors, you can wear both hats—many teams still outsource the secretarial role to avoid missed filings.

The documents that make (or break) a two-founder company

1. Articles of Association (public, filed at incorporation)

   • Transfer restrictions (to reinforce “private” status), pre-emption on new issues and transfers, quorum & voting, whether you allow a chair casting vote, and any share classes.

   • Keep it clean and future-proof; you can always amend by special resolution.

2. Shareholders’ Agreement (private contract among owners)

   • Cap table & vesting (yes—founder vesting is healthy).

   • Reserved matters + voting thresholds.

   • Deadlock steps and valuation mechanisms for buy-sell.

   • Leaver provisions (good vs bad leaver repurchase price).

   • Tag/drag, pre-emption, information rights, IP assignment, non-compete/confidentiality.

3. Board Charter & Mandates

   • Who can sign payments (two-to-sign threshold; single-sign caps for petty cash).

   • Hiring authority, capex limits, and bank account resolutions. Banks typically KYC all directors and significant shareholders; expect to provide incorporation documents, IDs, and a board mandate naming signatories. (Policies vary by bank; the legal framework allows both founders to be directors and signatories.)

4. Statutory Registers

   • Register of Members, Register of Directors, and the Significant Controllers Register (SCR) kept at the registered office. With a 50/50 split, both founders are “significant controllers” (>25%) and must be recorded.

Must-do compliance (put these dates in your calendar)

• Annual Return (Form NAR1): Within 42 days after each incorporation anniversary (except the year of incorporation). Late filing is a criminal offence and incurs escalating fees. Your company secretary usually handles it—don’t assume it “just happens.”

• Accounts & Audit: Maintain books and prepare audited financial statements annually (standard expectation for Hong Kong companies) for filing with your profits tax return.

• Significant Controllers Register: Identify any person/entity with >25% ownership or control, keep the SCR up-to-date, and make it available to law enforcement upon demand. Non-compliance is an offence.

• Ad-hoc filings: Promptly file changes to directors/secretary, registered office, share allotments/transfers.

Pro tip: Ask your secretary to share a compliance calendar with email reminders one month and one week before each deadline.

The governance questions that matter more than “can we?”

1) How will you make decisions fast—without risking unilateral moves on big issues?

Split the world into board-level ops (handled by directors, with a simple majority and possibly a chair casting vote) and shareholder-level reserved matters (equity changes, debt over a threshold, M&A, IP transfers), which need a supermajority or unanimity.

2) What if you disagree (for real)?

Write the deadlock roadmap now: structured negotiation → mediation → buy-sell mechanism (pre-agreed valuation approach), with clear timelines. Your future self will thank you.

3) How will you prevent stealth dilution or a hostage situation at exit?

Use pre-emption on issues/transfers, plus tag/drag. If a buyer wants the whole company, drag ensures the minority can’t block a bona fide sale; tag assures the minority rides along at the same terms.

4) Who runs day-to-day—and how is performance measured?

If both are executive, split domains (e.g., one owns revenue & ops; the other, product & finance) and define tie-breakers for routine calls. If only one is executive, give the non-exec information rights and board access so oversight is real, not symbolic.

5) What happens if someone leaves?

Build good-leaver/bad-leaver rules with a founder vesting schedule (e.g., 4 years with a 1-year cliff). Unvested shares on a bad-leaver departure should be repurchased at cost, not fair market value.

Banking & payments: who signs, who shows up

Hong Kong banks and fintechs will KYC directors and significant owners; most ask for board resolutions and a bank mandate naming signatories. You can set joint signing for large payments and single sign for small operational spend. Some banks still require in-person verification for directors; others enable remote onboarding in specific cases—check the bank’s policy early so both founders can plan travel if needed. (This is policy, not law; the legal framework allows both of you to act as directors and authorized signers.

Common founder pitfalls (and how to avoid them)

• No deadlock plan in a 50:50. Hope isn’t a strategy. Bake in a shotgun or call/put so one partner can exit at a fair price if you truly can’t agree.

• Letting the “local” requirement slide. You must have a Hong Kong-based company secretary; missing filings risks fines and officer liability.

• Forgetting the 42-day annual return. It’s easy to miss; it’s a crime to file late. Automate reminders.

• No paper trail. Minutes, written resolutions, updated registers, and proper share certificates prevent headaches with banks, investors, and—if it comes to it—courts.

• Assuming “offshore = no tax.” Hong Kong taxes profits arising in or derived from Hong Kong, and there are updated rules for certain foreign-sourced passive income. Get tax advice if you’ll receive cross-border income. (Outside the narrow scope of this article, but worth flagging.)

FAQs (the things partners ask most)

• Do both of us have to live in Hong Kong?

  No. Non-residents can be directors, and there’s no nationality requirement.

  You still need a Hong Kong-based company secretary.

• Can one of us also act as company secretary?

Only if the company has more than one director. The law prohibits a sole director from also being company secretary. Many teams use a corporate secretary regardless.

• Is there a minimum or “standard” capital?

Hong Kong abolished par value; you’ll decide the number of shares and the percentage split. What matters is rights (votes, dividends), not face value. (See Cap. 622 framework on share capital and model articles.)

• Will both of us appear on a public register?

Directors and members are on statutory registers; significant controllers (>25% owners/controllers) must be recorded in the SCR kept at the registered office and shown to law enforcement upon demand (not publicly searchable). With a 50/50 split, both of you are significant controllers.

• How many shareholders can we add later?

Up to 50 members if you want to remain a private company. Above that, you’re no longer private under the definition.

What’s the one-page “do-this-now” checklist?

• Appoint both founders as directors (meets the “≥1 natural person” rule). z

• Engage a Hong Kong company secretary (individual resident or corporate in HK).

• Choose 50:50 or 60:40, then encode reserved matters and a deadlock clause.

• Approve a bank mandate (two-to-sign threshold; single-sign cap).

• Compile the SCR and set reminder workflows for updates.

• Calendar the Annual Return (42 days after each anniversary).

Putting it all together

Two partners can be co-directors and co-owners of a Hong Kong company with zero friction from the law. The jurisdiction is intentionally flexible: directors can be of any nationality, companies can be 100% foreign-owned, and almost all of the “how” is left to your Articles and Shareholders’ Agreement. The only local fixtures are a Hong Kong-based company secretary and routine compliance like the Annual Return and SCR.

Treat governance like product: design it on purpose. Decide how you’ll make decisions (and break ties), protect both sides against dilution or dead-ends, and write it all down. Do that—and keep your filings tight—and you’ll have a Hong Kong vehicle that investors respect, banks can onboard, and both founders can run with confidence.