Very few are those who choose their home country to create a company. Nowadays, the majority of them opt for foreign countries or jurisdictions that are much more advantageous in terms of taxation.
Hong Kong is one of the leading destinations for entrepreneurs from all over the world. This new wave is explained by a deep desire to access a growing market while being at the doorstep of China and while benefiting from a reduced taxation in Hong Kong.
Why Hong Kong ?
First of all, it is important to know that setting up a company in Hong Kong is very simple and fast. Hong Kong is one of the easiest jurisdictions to establish and manage a business. And these elements are part of the key factors of success for any business.
Moreover, Hong Kong’s geographical location gives it a prime position in the global economic sphere. But not only that, the productivity of its workforce, its political and economic stability, its advantageous tax system, its entrepreneurial environment as well as the superior quality of its infrastructure make Hong Kong a destination of choice when you want to set up your business overseas.
Business structures in Hong Kong
It is simple, in Hong Kong, all the companies are subjected to the same rules. When you create a company in Hong Kong you benefit from a simplicity and speed of creation.
That’s why, every year, hundreds of entrepreneurs choose Hong Kong to set up their own company or simply open a regional office to have a presence on the island.
Here are some important advantages to set up a business in Hong Kong:
- A very low taxation,
- An independent judicial system,
- Free flow of information,
- State of the art infrastructure
- World-class schools, universities, etc.
- Low crime rate
Limited (Ltd) company in Hong Kong
It is totally possible for an individual or a foreign company to own a 100% Hong Kong company.
Opening a company in Hong Kong does not require you to live in Hong Kong. You can reside anywhere in the world and have a company in Hong Kong.
With an Ltd, it will be possible for you to hire staff, to have physical offices in Hong Kong and to develop commercial relationships with local suppliers.
Caution: creating a company in China is not the same as creating a company in Hong Kong.
More info here: company-hongkong.com
The offshore company in Hong Kong
There is no Offshore Registry in Hong Kong. It is a term that we find a lot on Internet concerning a Hong Kong company but it does not exist in Hong Kong! Indeed all the companies registered in Hong Kong are companies of common law.
But it is at the fiscal level, that a difference is made between OnShore activities (which are taxed at the Profit tax) and OffShore activities (which are not taxed).
To make it simple, if a company in Hong Kong has no customer, no supplier, no staff, no office, no stock, etc. in Hong Kong, it will not be taxed at the Hong Kong Profit tax.
Taxation in Hong Kong
A simple tax system and low tax rates make Hong Kong very attractive to foreign investors. The advantage of Hong Kong is its territorial taxation, which means that no income from abroad is taxable in Hong Kong, whether or not it is received in Hong Kong. As long as your activity is done outside the island, your taxation will be null.
In Hong Kong, the fiscal year runs from April 1st to March 31st of the following year. The tax system is managed by the Hong Kong Inland Revenue Department. There are three types of taxes in Hong Kong:
- Corporate income tax: If the company’s profit is less than HKD 2 million, the corporate income tax is 8.25%. Above that, it is 16.5%;
- Tax on salaries;
- Property tax on real estate income.
More info here: www.gov.hk
However, in Hong Kong some of your income is exempt. Indeed, there is no :
- Capital gains tax;
- Withholding tax on dividends and interest;
- Social security contributions;
- Inheritance tax.
Hong Kong : Quality infrastructures
Whether for transportation or communications, Hong Kong’s infrastructure is known to be among the best in the world. Hong Kong is constantly improving its infrastructure to meet the needs of companies operating in Hong Kong.
Whether it is the Hong Kong airport or the Hong Kong port, both are known to be among the best and busiest in the world.
As for the telecommunication infrastructures, they are known to be ultra efficient. Broadband access is available in virtually every residential and commercial building on the island. The opening of the communications market has allowed many telephone and internet operators to establish themselves and to offer a range of services to more than 98% of households living in Hong Kong.
At the banking level, the system is very efficient. All the big banks of the world are present in Hong Kong which facilitates enormously the transfers. Also, their Know Your Customer policy makes the system more reliable for investors.
In summary, Hong Kong is a very interesting destination in terms of business. It is the ideal platform for import-export activities, online sales activities and all intangible services. It is also the ideal destination if you are looking for tax optimization in Hong Kong.
Considered as the freest economy in the world, Hong Kong offers a dynamic environment to all companies established or planning to establish in Hong Kong. There are no restrictions on inward and outward investment as well as foreign investment. The banking system in Hong Kong is very strong and offers many solutions to companies in Hong Kong.
All these elements make Hong Kong an attractive jurisdiction to do business in.
Our cabinet has been present in Hong Kong since 1998. It is also at this date that we registered our first company.
In addition to the creation of a company in Hong Kong, we are entitled to be your Company Secretary as stipulated in the Hong Kong law.
Our team is composed of legal and accounting professionals who are at your service to ensure the success of your business activities in Hong Kong and in the rest of the world.
Contact us at +971 52 820 0964 or send us an e-mail: firstname.lastname@example.org.