Why incorporate company in Hong Kong? As one of the Asia Four Tigers, Hong Kong, is an international financial centre that attracts investors from all over the world. Being recognised as both the safest city in the world, and the city with the longest life expectancy, plus the strategic location and active participation in international events as well as building foreign relations with other countries, Hong Kong appeared to be an important financial centre that will assured expansion in your business.
As one of the world’s leading international financial centres, with one of the greatest concentrations of corporate headquarters in the Asia-Pacific region, Hong Kong has a major capitalist service economy characterised by low taxation and free trade. Besides, Hong Kong was ranked second in the Ease of Doing Business Index, behind Singapore.
There are some advantages when setting up a company in Hong Kong. Firstly, there is sound legal system in Hong Kong, your business will be able to gain international credit by making use of Hong Kong’s reputation. As an international financial centre, Hong Kong has multiple financing channels. Besides, there is no limitation on business scope and simple follow-up service.
With the absence of foreign exchange controls, funds can be circulated freely. On top of that, foreign currencies can be exchanged and transferred as needed, and credit operations can be handled conveniently and quickly. Not only that, the simplified taxation system and low taxation rate, which profits tax only with tax rate at 16.5% of the profits, is also one of the advantages setting up company in Hong Kong. Apart from that, tax needs to be declared just once a year.
Type of companies
Limited Company – owner can take advantage of all the tax benefits and concessions available to any fully incorporated business, including the free trade agreement with Mainland China – Closer Economic Partnership Arrangement (CEPA)
Branch Office or Parent Company – Unlike a subsidiary limited company, a branch office is not a separate legal entity from the parent and can leverage funds off the credit rating of its owner.
Representatives Offices – Cannot engage in profit-making activities and can only fulfill limited functions.
There are some general requirements when you incorporate in Hong Kong, includes:
There shall be at least one shareholder and director over 18 years old.
One legal secretary (position taken by a Hong Kong permanent resident or Hong Kong company).
There shall be one registered address in Hong Kong.