Taxation in Hong Kong
Are you planning to launch a company registered in Hong Kong, particularly because its tax system is much more favorable to businesses than France’s? However, before you get started, we recommend that you thoroughly research special cases to avoid unpleasant surprises and better anticipate the costs.
Hong Kong, a territorial tax regime
Hong Kong has what is known as a territorial tax system. This is particularly attractive for foreign entrepreneurs, especially those who want to set up an offshore company.
Corporate tax is not calculated in the same way for all companies in Hong Kong: it all depends on how you conduct your business on a day-to-day basis. That is why we encourage you to gather thorough information before setting up your company: this will enable you to choose the most advantageous solution.
I own an offshore company: what is the tax treatment in Hong Kong?
It’s very simple: an offshore company domiciled in Hong Kong is not taxed on its profits and dividends. Indeed, although the company is registered in Hong Kong, it has no physical office or staff there. Its business is conducted exclusively outside the territory.
Hong Kong is therefore a destination of choice for offshore companies:
Favorable tax treatment
Its tax treatment is advantageous with this business model
A gateway to the Asian market
Your localization opens the doors to the Asian market
Supporting a strong economy
You benefit from the support of a strong and growing economy
Hong Kong's credibility
You enhance your company’s credibility because Hong Kong is a territory held in high regard by the OECD: it is not a tax haven.
Attention: the Chinese government will ask you to provide proof that your company does not operate within its territory. You will therefore need to provide certain documents.
I have an office in Hong Kong: how does this affect my company’s taxes?
For your business needs, you need an office in Hong Kong. You also want to hire staff and conduct your business directly in the territory. In such a case, the tax rules are not the same as under the offshore system. Your profits will be taxed at 16.50%, and income tax can be as high as 15%.
However, rest assured: the tax rules are still much more advantageous than in France. For example, did you know that VAT simply does not exist in Hong Kong? Taxation does exist, but it is therefore much more lenient than in OECD countries.
Learn more about taxation in Hong Kong
Whether or not you wish to set up an offshore company, we recommend contacting us to learn more about taxation in Hong Kong. We are thoroughly familiar with the rules in force and can therefore help clarify matters, as the regulations are completely different from those in France.
Are you wondering whether this is necessary for an offshore company? Taxation in Hong Kong is zero in this specific case. Once again, we encourage you to seek professional assistance: we will explain which documents to prepare and provide to the relevant authorities to prove that your company fully complies with all offshore rules. If you are unable to provide these documents, you will have to pay corporate income tax, like any other company operating in the territory.
You should also be aware that in Hong Kong, you are required to keep strict accounting records. Here too, our firm can assist and advise you based on your situation.
Taxation in Hong Kong is advantageous provided that you understand it properly and comply with the rules of the Chinese government: contact us to learn more!