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Reasons to use Hong Kong Corporation for expanding/investing your business?

Updated time: 20 Jul, 2019, 11:26 (UTC+08:00)

The Heritage Foundation has been rated Hong Kong as the “world’s freest economy” for 24 consecutive years; in addition to being the most important business center of Asia, Hong Kong is famous for being the world’s 2nd most competitive economy and the 2nd largest recipient of foreign direct investment. Furthermore, many entrepreneurs flock to Hong Kong due to the land offers unlimited business opportunities for startups which is the reason Hong Kong is regarded as the metropolitan that integrates the opportunities, creativity, and entrepreneurial spirits. 

Reasons to use Hong Kong Corporation for expanding/investing your business?

Hong Kong is one of the world’s famous international financial centers and acts as a platform to the global economy and commerce  as it is favored by worldwide investors and business people because of these 4 factors:

  • An established legal system that is trusted by many international businesses.
  • Simplified taxation system and low taxation rate
  • Well-equipped infrastructure and communication facilities 
  • High-quality professionals

Besides these factors that Hong Kong has, there are also additional advantages for the business owners and investors to incorporate their companies in Hong Kong. These advantages are including:

1. Ideal location

Hong Kong located strategically in close proximity to China and with the Closer Economic Partnership Arrangement (CEPA) between the two countries, Hong Kong is on the lead of taking advantage of future business opportunities while providing a business-friendly economy as many economic experts forecast in the future, Asia will be soon become the world’s economic center with the beginning of the Asian century that predicted to happen in around 2020. Therefore, many businesses are focusing their operation in the Asian market and with Hong Kong in the middle of Asia, the opportunities are favorable to those set up their businesses in Hong Kong.

2. Transportation

Connecting to over 5000 international destinations with more than 100 international shipping lines, Hong Kong’s container port is the world’s 3rd busiest and its cargo airport is one of the world’s busiest. In 2018, Hong Kong's global export and import goods are worth 569.1 billion and 627.3 billion USD. Due to the free trade agreement between Hong Kong and China, products from China are easily shipped from the Mainland and the global shipping cost from Hong Kong to the rest of the world is relatively cheap as this is one of the main concerns for the businesses in the e-commerce and logistics industry.

3. One Country, Two Systems concept

Hong Kong may be under China’s authority but it follows a separate legal and political system that helps Hong Kong to retain its strength and success as an international business city while enhancing its appeal to unrivaled access to opportunities in Mainland China’s market. For foreign businesses and investors, many employees from Hong Kong are trilingual (English, Mandarin, and Cantonese) and equipped with the knowledge of the businesses of Mainland China which are advantageous to the employers aiming to expand into China’s market. Furthermore, Hong Kong is a bilingual city where English and Cantonese are widely spoken, with English being used as the main language of businesses and contracts. To attract more foreign businesses set up companies in Hong Kong, the government allows the foreigners to have 100% ownership of their Hong Kong companies and do not require any local resident to be appointed as the shareholder or a nominee director.

4. Taxation system

The biggest reason many businesses choose to set up their companies in Hong Kong because of its favorable tax system as these taxes in Hong Kong is not imposed as following:

  • No Sales tax or VAT.
  • No Withholding tax.
  • No capital gains tax.
  • No tax on dividends.
  • No estate tax.
  • Lastly, any profits generated from outside of Hong Kong are exempted

Although, Hong Kong does not impose the taxes above; there are three direct taxes imposed in Hong Kong which are:

  • Corporate income tax generated within Hong Kong are taxed at 8.25% for the first 2 million HKD and capped at 16.5%
  • Salary tax capped at 17%
  • The property tax is at 15%

Moreover, Hong Kong is a free trade zone with only tobaccos, spirits, and personal vehicles that are subjected to import tax.

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