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There are 3 advantages of setting up a company in Hong Kong: low tax rate, fewer taxes, and simple registration requirements!

The Hong Kong Special Administrative Region has an advantageous strategic location and continues to prosper in the Pearl River Delta. It can easily access both the Asia-Pacific market and the Chinese market. With the improvement of living standards and infrastructure in Hong Kong, setting up a company in Hong Kong will have many advantages and continue its position as a global financial market.

The following three specific benefits will demonstrate why Hong Kong is a popular business location, and here are some excellent reasons for those who want to start a business locally.

1. Benefit from the low tax system

The biggest advantage of setting up a company in Hong Kong is its well-known low tax system at home and abroad. Hong Kong companies/corporations (mainly divided into partnership and sole proprietorship businesses) mainly adopt two tax rates according to the tax system:

• The assessable profit is less than HK$2 million,

The tax rate is 8.25% (half of the tax rate specified in the Inland Revenue Ordinance) and 7.5% (half of the standard tax rate)

• the portion over HK$2 million,

The tax rate is 16.5% and the standard tax rate is 15%

For comparison, corporate tax rates in the rest of Asia range from 17 – to 30%. Globally, Hong Kong is also one of the jurisdictions with the lowest tax rates. According to the “Tax Misery and Reform Index” (Tax Misery and Reform Index) released by Forbes in 2009, Hong Kong’s taxation is ranked as the third-friendly region in the world. , which is quite attractive to Hong Kong companies and investors.

1. There are only three basic types of taxes in Hong Kong

In addition to lower tax rates than other regions, Hong Kong also has the advantage of fewer taxes.

Hong Kong companies generally only need to pay two kinds of taxes, one is the registered capital stamp tax with a tax rate of only 1%, and the other is the above-mentioned profits tax, unlike in foreign countries:

• sales tax;

• tax on dividends;

• capital gains tax;

• Hotel Accommodation Tax (HAT);

• Goods and Services Tax (GST) or Sales Tax;

• Withholding tax etc.

Without taking into account the operation of tobacco and alcohol, as well as some key regulated businesses, Hong Kong companies may not even need to pay import and export taxes. In disguise, Hong Kong only maintains three basic taxes: corporate profits tax, salaries tax, and property tax.

1. Simple company registration requirements

Setting up a company in Hong Kong requires fewer registration requirements, making it easy for entrepreneurs to start a business.

Generally speaking, the minimum registered capital (issued capital) required by the government is HK$10,000, and the threshold is relatively low; and the time for opening a company can be roughly completed within two weeks, which is an efficient process for business operators; In addition, company registration can be completed without a physical office; the existence of shell companies (ready-made companies) is also allowed.

For those who want to set up a Hong Kong company, the main requirements are the following:

• Confirm company name;

• Confirm the company structure (including at least one company director and secretary, the director and secretary cannot be the same person);

• Issue capital requirement of HK$10,000;

• Provide the company’s registered address. If you want to open a Hong Kong company bank account, it is best to set up an office or choose a virtual office service.

• Foreigners need to apply for a work visa.

The above information is for reference only. If you have any questions about setting up a company, we welcome your inquiries.

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