Why set up a company in Hong Kong?
You want to start a company in Hong Kong, but before beginning the process, you would like to understand the reasons why entrepreneurs from around the world choose to establish their businesses in this territory every year.
Hong Kong is particularly regarded as a gateway to Asia and China, with specific tax, banking, and legal characteristics.
The main advantages of Hong Kong
Establish a foothold in the Asian market
Hong Kong is often considered the gateway to Asia, and more specifically to China.
Asia is the most populous region in the world and one of the regions experiencing strong growth. For a company seeking to expand in Asia, establishing a presence in Hong Kong can therefore provide a strategic entry point.
Tax benefits
When the company’s business activities take place outside Hong Kong, there is no corporate tax. Hong Kong is also a free port: there are no customs duties. Finally, employee and employer payroll contributions are particularly low in Hong Kong.
Banking benefits
Hong Kong has a strong network of major international banks. E-banking services are particularly effective for managing many banking transactions remotely.
However, account-opening requirements have become stricter over the years.
The legal advantages
Hong Kong is based on Common Law: transparency and efficiency are the key principles.
The company registration process is simple and fast, and English is widely used in communications and documents.
What are the drawbacks to be aware of?
Mandatory accounting
Entrepreneurs must keep accounting records for their company in Hong Kong.
At least one individual director
At least one director of the company must be a natural person. This person may reside in Hong Kong or abroad.
Greater banking restrictions
Opening a bank account has become more difficult, with more restrictions than before. This step should therefore be anticipated from the project planning stage.
A trip to the bank may be necessary
For an appointment with a traditional bank, travel to Hong Kong may be required.
Can Hong Kong be considered a tax haven?
Hong Kong is neither a tax haven nor an offshore jurisdiction. The territory is classified on the OECD whitelist.
Rules concerning offshore structures have become stricter over the years. The objective is therefore to register a legal and legitimate company in Hong Kong, in compliance with the applicable framework.