Hong Kong is an economic and commercial hub located at the heart of Asia. The city offers a range of attractive business opportunities for entrepreneurs from around the world. If you are considering setting up a company in Hong Kong, it is essential to understand the main uses and activities commonly carried out there. In this article, we will reveal the three most popular activities for companies in Hong Kong, namely:
- import-export (or trading) company
- consulting (or consulting or service-provision) company
- holding (or investment-holding) company
In conclusion, setting up a business in Hong Kong is an excellent option. Hong Kong offers a wide range of opportunities for entrepreneurs and investors. Whether you wish to engage in import-export, provide consulting services, or establish a holding company, this dynamic city offers fertile ground for bringing your business plans to life. Make your decision based on your business objectives and specific needs, and consider leveraging local expertise to maximize your chances of success.
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Hong Kong Company: Import-Export
Thanks to its strategic location, first-rate transport infrastructure, and skilled workforce, setting up an import-export company in Hong Kong is a wise decision. Whether you plan to import products into Asia or export them to other regions of the world, the city offers an environment conducive to international business. This is the primary use of companies registered in Hong Kong. By registering your business in Hong Kong, you have the flexibility to invoice customers, whether individuals or businesses, without any geographical restrictions. Likewise, you can receive products and services from suppliers around the world, not just from Asia. Located at the heart of one of the world's most dynamic economic regions, your company is ideally positioned to thrive in international trade. Whether your goods pass through Hong Kong or do not pass through it at all, you will benefit from a favorable tax regime, as no tax will apply. Hong Kong's attractive corporate tax system, combined with its central role in international trade, makes the city a preferred choice for import-export companies. It provides an ideal framework for businesses seeking to expand their international reach and thrive on the global stage.Setting Up a Consulting Services Company in Hong Kong
Demand for consulting services in Hong Kong is growing steadily. Whether in finance, law, IT, or other sectors, many companies are looking for experts to guide them. Setting up a consulting company in Hong Kong allows you to take advantage of this growing demand. Benefits include a large pool of potential clients, a highly skilled workforce, and business-friendly regulations for service companies. Whether you are a management consultant, lawyer, IT specialist, or work in another field, Hong Kong offers a favorable environment for developing your consulting business. Furthermore, Hong Kong is an ideal jurisdiction for service companies, whether they operate in consulting, e-commerce, or other diverse sectors. E-commerce activities are expected to represent US$70 billion in Hong Kong, placing it among the top ten countries offering the most favorable conditions for e-commerce, according to the London-based Economist Intelligence Unit (source: OECD). If your company's services are performed outside Hong Kong, no tax will be due.Holding Company: The Power of This Type of Business in Hong Kong
For investors and entrepreneurs seeking to increase flexibility and diversify their assets, setting up a holding company in Hong Kong is an attractive option. Holding companies are commonly used to hold interests in other businesses, invest in real estate, or manage an asset portfolio. Hong Kong offers a favorable tax environment for holding companies, with significant benefits, including the absence of corporate tax for companies that do not conduct business in the territory. This explains Hong Kong's popularity as a choice for international holding companies.
A holding company, or parent company, specializes in holding interests in other companies, generally subsidiaries. As an international center, Hong Kong offers the possibility of establishing a parent company to hold interests in subsidiaries located around the world. This structure is advantageous for consolidating a group's international activities.
A major advantage is that Hong Kong imposes neither tax on dividends nor capital gains tax. In addition, the city benefits from an increasingly extensive network of tax treaties, which helps reduce double taxation on dividends, royalties, and interest.
However, it is important to note that tax authorities now pay particular attention to the concept of "economic substance," meaning that the benefits of tax treaties no longer apply to companies without a real presence in Hong Kong, such as employees or offices (with a commercial lease in the company's name). In such cases, other jurisdictions may be more appropriate, and we invite you to contact us for specific advice.
