Set up a company in Hong Kong with Merritt

We believe it is important to remind our clients and visitors to this website that Hong Kong benefits from low taxation (max. 16.5%), or even no taxation on profits if the company’s business is conducted outside Hong Kong. This raises several questions concerning the notion of economic substance and the place where the company’s business is conducted if a company has neither an office nor staff located in Hong Kong.

OECD member countries no longer wish to see foreign tax practices that are harmful to their economies, and the implementation of various measures, notably the Common Reporting Standard (CRS) and Base Erosion and Profit Shifting (BEPS), is intended to combat arrangements that are not economically justified.

We therefore strongly advise our clients to establish a genuine company with genuine business activities in Hong Kong. It seems illusory, or even risky, to us to set up an “Offshore” company, that is, a non-resident company. Likewise, all arrangements aimed at opacity are, at best, useless and, at worst, fraudulent.

We do not offer nominee services or complex arrangements involving trusts, multiple layers of companies, etc. The safest arrangements seem to us to be the simplest and most transparent.

We can only advise you to always have a tax lawyer located in your country of residence confirm that the solution implemented complies with your country’s tax legislation. We are qualified to answer your tax questions concerning Hong Kong, but we do not deal with the foreign taxation of a non-resident. We will always advise you to establish a genuine presence in Hong Kong and, of course, to comply with tax requirements, whether in Hong Kong or in the country of tax residence of the company’s shareholders.