Hong Kong Facts
Hub for International Business
For decades, Hong Kong is considered as one of the best cities to establish and run a business. One may ask, why Hong Kong? Below are some of the factors that continue to contribute to its success:-
Strategic Location
Hong Kong is strategically located at the heart of the Asia-Pacific region. A 5-hour flight can connect you to most major markets around.
If you need to tap into Mainland Chinese market, you will find that Hong Kong is perfectly situated on the southeast coast of China's Greater Bay Area. Meanwhile, Shenzhen, the Silicon Valley of China, is just 30-45 mins away from the centre of the City.
Attractive Tax Regime
Taxes are the main concern for any entrepreneur who intends to set up a business in a given jurisdiction. In this regard, Hong Kong boasts of being one of the lowest tax jurisdictions in the world. For most of the cases, the compliance arrangement is just required to be done once annually, and the tax filing process is also simple and straight forward.
Personal income tax (or called salaries tax locally) , starts at 2% and goes up to 17% for net income above HKD200,000 (salaries after various allowance deductions) .
Corporate tax is set at 16.5% of assessable profits for corporations and 15% for unincorporated businesses.
In Hong Kong, corporations have two options for Profits Tax Rates:
- Single-Tier Corporate Tax System - The Single-Tier Corporate Tax System-corporation are taxed at 16.5% on assessable profits and unincorporated business are taxed at 15%
- Two-Tier Corporation Tax System - The Two-Tier Profits Tax Regime applies to both corporations and unincorporated business by lowering tax rate at 8.25% for the first HK$2 million of assessable profits.
There is no capital gains tax, nor any withholding tax on dividends and interest or collection of social security benefits. What makes it more attractive, unlike many other jurisdictions, there is no sales tax or VAT in Hong Kong.
World Freest Economy
Hong Kong is one of the world’s most dynamic economies driven by the principles of free enterprise, free trade and free market, which is open to all, regardless of nationality.
Basically, there are no restrictions on inward and outward investments, no foreign exchange controls and no foreign ownership restrictions.
Furthermore, businesses set up in Hong Kong (i.e. any Hong Kong company regardless of nationality) can now benefit by gaining preferential access to the Mainland China market from the Closer Economic Partnership Arrangement (CEPA) – a free trade agreement between the Mainland China Government and the Government of the Hong Kong Special Administrative Region.
All goods qualified as Hong Kong origin may be exported
to the Mainland tariff free.
Moreover, Hong Kong service suppliers in 40 areas are eligible to receive preferential treatment in providing services in the Mainland China.
Leading Financial Centre
The latest Global Financial Centres Index (GFCI 25) ranks Hong Kong 3rd after New York and London, endorsing the City's position as Asia leading financial hub for investors / companies all over the world.
World Class Infrastructure
Hong Kong’s efficient and well-built travel, logistics and telecommunications infrastructure makes international business easy.
High quality infrastructure is essential to the efficient operations of any business. Hong Kong offers one of the most advanced business infrastructure in the world, including:
Efficient and convenient local and regional transport - Hong Kong International Airport was ranked No. 3 in terms of number of International air passengers in 2018 by Airport Council International
World-class telecommunications and connectivity - 5G communication network has been deployed in most parts of the city in 1st half of 2020
World-leading sea and air cargo system - Hong Kong International cargo centre was ranked World No.1 in 2018 by Airport Council International
Global Practices and Standards
Hong Kong's interwoven and complementary networks of highly knowledgeable and experienced people and businesses deeply understand global markets and consistently deliver world class contribution to international standards in law, finance, shipping, insurance and professional services.
Additionally, our trusted legal, financial, investment and taxation systems provide a safe, secure and familiar business environment.