Hong Kong has proven itself over time to be one of the best locations to start and run a business. This is because it scores highly on elements that are critical to the survival of a business. Consequently, many business owners and investors are choosing to start and set up their businesses in Hong Kong. Here are a few reasons why you should incorporate your company in Hong Kong:
1. Free Economy and trade
One of the reasons why you should set up a business in Hong Kong is due to its free economy. In 2019, the Heritage Foundation has rated Hong Kong as being one of the freest economies in the world. Likewise, in 2020, the World Bank has ranked Hong Kong as the world’s third easiest country to set up a business. As long as business activities are legal, Hong Kong permits corporations to start and operate just about all types of business, such as e-commerce, consulting services, manufacturing, and financial asset holding. The government allows for Hong Kong-based businesses and companies to open bank accounts anywhere.
Additionally, a wide variety of types of goods imported to Hong Kong are not taxed, except for motor vehicles, hydrocarbon oil, tobacco, and methyl alcohol. The government also exempts taxes and excise duties on all exports. In some instances, some business owners will be required to apply for licenses for certain kinds of shipments, but even then, the process of obtaining the relevant licenses is not complicated.
Related Read: How to Open a Corporate Bank Account in Hong Kong »
2. Easy Access to Mainland China
Hong Kong has long fascinated investors due to its vitally strategic location. Being situated in the heart of Asia, its close proximity to mainland China makes it the ideal connecting point between the East and the West. With Hong Kong being well-connected with countries like China in the region, this provides numerous market opportunities to be tapped on. Hence, this is another incentive to set up your business in Hong Kong.
3. World Class Infrastructure
Hong Kong is widely acclaimed as one of the largest commercial centers, right in the heart of Asia. It has a well-developed and interconnected transportation system that takes between 5 to 8 hours to fly to any country within the region.
The International Airport of Hong Kong is one of the top ten busiest airports globally, in addition to the efficient transport network of trams, railways, double-deckers, minibuses, and ferries. The jurisdiction is also home to an outstanding telecommunication and shipping hub. Victoria Harbor, located within Hong Kong, is capable of handling a vast variety of vessels and therefore is deemed to be one of the busiest ports in the region.
Furthermore, Hong Kong has one of the highest broadband and hotspot speeds in the world, and in 2020, it was one of the first territories to upgrade into 5G technology.
4. Productive Workforce
Within its borders, Hong Kong takes pride in possessing a huge manpower that is productive, skilled, disciplined, computer literate, and highly trained. Citizens of Hong Kong can easily adapt to international business as English is one of the official languages in Hong Kong.
Since Hong Kong’s workforce is well-trained in all aspects of international business matters, there is no shortage of professional people in the country. This means that investors will not find it difficult to acquire the needed talent pool when they incorporate a company in Hong Kong.
5. Ease of Setting Up A Business
Compared to other countries in the region, it takes a relatively shorter amount of time to set up a business in Hong Kong. The country has also put in place various transparency laws and orders that protect potential entrepreneurs seeking to set up businesses.
The government’s rules and regulations to set up a business entity in Hong Kong are straightforward and consistent.
Related Read: How Does a Foreigner Start up a Business in Hong Kong? »
6. An Attractive Tax System
Usually, one of the main concerns for prospective business owners is the tax system of the country in which they are seeking to set up a business. Therefore, it is a relief for many who are looking into doing business in Hong Kong to find that the country has one of the simplest and lowest tax jurisdictions in the world. For instance, salary tax starts from as low as 2% and progresses up to 17% for those earning above HKD 132,000.
Corporate profits are subjected to a two-tiered tax rate regime. That is,
- 8.25% for profits under 2 million HKD
- 16.5% percent profits above 2 million
This is fairly low compared to other countries where the corporate tax ranges from 17% to 30%.
The financial management system in Hong Kong is also straightforward. There is no withholding tax on interest and dividends, capital gains tax, or collection of social security benefits. There is also no VAT imposed on Hong Kong-based businesses.
7. Business Support and Assistance
Hong Kong offers excellent business support and assistance which attracts many individuals to incorporate their company in Hong Kong. The government has adopted several associated programs to assist companies to grow and develop. There are also several business support programs and financial incentives that are initiated to promote the growth of Small and Medium-Sized Enterprises (SMEs) within Hong Kong. Organizations such as the Hong Kong Trade Development Council offer to assist Hong Kong-based companies and businesses to find new markets and also support international companies to carry out their business within the region.
Related Read: The Top 5 Government Grants Available for SMEs in Hong Kong »
8. Liberal Immigration Policies
Hong Kong permits nationals from 170 countries and territories alike to enter without any visa requirements for 7 to 180 days.
The government has put in place various provisions for Hong Kong work visas that make it relatively simpler for business owners looking to move into Hong Kong to run their companies, or who may require to employ foreign professionals to work within their companies.
In addition, foreign nationals with short-term Hong Kong visas are permitted to sign contracts and conduct business negotiations.
In conclusion, Hong Kong serves as an ideal location that continues to attract many to set up their business in Hong Kong. At Hong Kong Company Registration, we offer company incorporation services tailored to your business needs. So kickstart your Hong Kong business venture with us!
- How long does it take to incorporate a Hong Kong company?
- The entire company registration process for a Hong Kong company usually takes about 3 to 5 working days.
Do note that you can still register your business through a professional corporate services provider, without having to travel to Hong Kong.
- What types of goods are exempted from Hong Kong taxation?
- In Hong Kong, many imports and exports are not subjected to taxation except for the following imported goods:
- Motor vehicles
- Hydrocarbon oil
- Methyl alcohol
- How is the Hong Kong corporate tax regime?
- Hong Kong has an attractive corporate tax regime that is one of the simplest and lowest globally. Hong Kong’s corporate profits are subjected to a two-tiered tax system which follows:
- 8.25% for profits under 2 million HKD
- 16.5% percent profits above 2 million HKD
- Are there any requirements for foreigners to obtain Hong Kong visas?
- Hong Kong offers a liberal immigration policy system for foreigners. The country allows nationals from 170 countries and territories to enter without any visa requirements for 7 to 180 days.
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