Hong Kong
Few entrepreneurs choose their country of origin to establish a company. Nowadays, most opt for foreign countries or jurisdictions that are much more advantageous in terms of taxation and fiscal policy.
Hong Kong is one of the leading destinations for entrepreneurs from around the world. This new wave is explained by a deep desire to access a rapidly growing market while being at China's doorstep and benefiting from reduced taxation in Hong Kong.
Why Hong Kong?
First of all, establishing your business in Hong Kong is very simple and fast. Hong Kong is one of the easiest jurisdictions for setting up and managing a business. These factors are key to the success of any business.
In addition, Hong Kong's geographical location gives it a prominent place in the global economic sphere. But that is not all: the productivity of its workforce, political and economic stability, favorable tax system, entrepreneurial environment, and superior infrastructure make Hong Kong a destination of choice for anyone wishing to establish a business abroad.
Business structures in Hong Kong
It is simple: in Hong Kong, all companies are subject to the same rules. Setting up a company in Hong Kong means benefiting from a simple and fast incorporation process.
That is why, every year, hundreds of entrepreneurs choose Hong Kong to establish their company or simply to have a presence on the island through regional offices.
Some significant advantages of establishing your business in Hong Kong:
- Very low taxation,
- An independent judicial system,
- Free circulation of information,
- State-of-the-art infrastructure
- World-renowned schools, universities, etc.
- A low crime rate
The Limited company (Ltd) in Hong Kong (limited liability company)
It is entirely possible for an individual or a foreign company to own 100% of a 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, you will be able to hire staff, have physical offices in Hong Kong, and develop business relationships with local suppliers.
Do not confuse them: establishing a company in China is not the same as establishing a company in Hong Kong.
More information here:
www.societehk.com
The offshore company in Hong Kong
There is no offshore register in Hong Kong. This is a term frequently found online concerning a Hong Kong company, but it does not exist in Hong Kong! In fact, all companies registered in Hong Kong are ordinary-law companies.
However, a distinction is made for tax purposes between OnShore activities, which are subject to Profit tax, and OffShore activities, which are not subject to it.
Put simply, if a company in Hong Kong has no customers, suppliers, staff, offices, stock, etc. in Hong Kong, it will not be subject to Hong Kong Profit tax.
Taxation in Hong Kong
A simple tax system and low tax rates make Hong Kong highly attractive to foreign investors. Hong Kong's main advantage is its territorial tax system, which means that no income originating abroad is taxable in Hong Kong, whether or not it is received in Hong Kong. As long as your business is conducted outside the island, your tax liability will be zero.
In Hong Kong, the tax year runs from 1
st April to 31 March of the following year. The tax system is administered by “The Hong Kong Inland Revenue Department”. There are three types of taxes in Hong Kong:
- Corporate profits tax: If the company's profit is below HKD 2 million, corporate tax is 8.25%. Above that, it is 16.5%;
- Salaries tax;
- Property tax on rental income.
More information here:
www.gov.hk
However, some of your income is exempt in Hong Kong. Indeed, there is no:
- Capital gains tax;
- Withholding tax on dividends and interest;
- VAT;
- Social security contributions;
- Inheritance tax.
In addition, very few products are taxed.
Hong Kong: Quality infrastructure
Whether for transportation or communications, Hong Kong's infrastructure is known to be among the most efficient in the world. Hong Kong continually improves its infrastructure to meet the needs of companies established in Hong Kong.
Whether it is Hong Kong International Airport or the Port of Hong Kong, both are renowned as being among the best and busiest in the world.
As for telecommunications infrastructure, it is known to be highly efficient. High-speed internet access is available in practically all residential and commercial buildings on the island. The opening of the communications market has enabled numerous telephone and internet operators to establish themselves and offer a wide range of services to more than 98% of households living in Hong Kong.
The banking system is also highly efficient. All the major banks in the world are present in Hong Kong, which greatly facilitates transfers. In addition, their Know Your Customer policy makes the system more reliable for investors.
In summary, Hong Kong is a highly attractive destination for business. It is the ideal platform for import-export activities, online sales, and all intangible services. It is also the ideal destination if you are seeking tax optimization in Hong Kong.
Considered the freest economy in the world, Hong Kong offers a dynamic environment to all companies established in Hong Kong or planning to establish themselves there. There are no restrictions on inward or outward investments or on foreign investments. Hong Kong's banking system is very strong and offers many solutions to companies in Hong Kong.
All these factors make Hong Kong an attractive jurisdiction for conducting business there.
Our
firm has been present in Hong Kong since 1998. That is also when we incorporated our first company.
In addition to company formation in Hong Kong, we are authorized to act as your
Company Secretary, as stipulated by Hong Kong law.
Our close-knit team consists of legal and accounting professionals who are at your service to ensure the success of your professional activities in Hong Kong and the rest of the world.
Contact us at +971 52 820 0964 or send us an email:
support@merritt.group
