7 Advantages of Opening a Company in Hong Kong
Whether it is an international enterprise entering the mainland China market from Hong Kong or a mainland China enterprise entering the international market from Hong Kong, their first choice is to set up a company in Hong Kong. What are the advantages of setting up a company in Hong Kong? In this article, we will introduce the advantages of setting up a company in Hong Kong in terms of taxation, company type and industry!
Many companies will use Hong Kong as their second headquarters or set up offices, according to the publication "Hong Kong's Second Headquarters" published by the Census and Statistics Department on 24 November.Annual Survey of Companies in Hong Kong with Parent Companies Located outside Hong Kong, 2022", there are 1,411 companies with regional headquarters in Hong Kong, and there are also more than 5,000 regional offices in Hong Kong, reflecting the business value of the Hong Kong region, and the factors why so many companies will set up companies in Hong Kong?
Tax Benefits
Tax rates in Hong KongRelatively low, fewer types of tax, relatively low income tax rate on profits generated from the company's operations, profits tax rate of 8.25% for the first HK$2 million, and 16.5% for the assessable profits thereafter, and the need to pay profits only after the actual profit is made, and even the company's losses can be carried forward to the next year for deduction.
In addition, Hong Kong does not levy tax on overseas income and capital gains, and many international enterprises make use of the co-operation agreements signed between Hong Kong and various countries to achieve reasonable tax avoidance. This makes Hong Kong an ideal choice for international trade and multinational enterprises.
Allowed shell companies
Hong Kong allows the existence of shell companies, which refer to companies with only a small amount of or no actual business activities. Shell companies can be used to carry out a variety of business activities, including capital operations, asset management, and so on, which can make the company's resources and operations more flexible, and companies with no operations can be directly filed for tax purposes, so the cost of setting up a company is extremely low.
Unlimited scope of business
There is basically no restriction on the field of business of a company formed in Hong Kong. There is no need to vet the type of business, goods or services when applying for a company, which means that a company can operate in almost any field of business and can flexibly adjust its business scope according to the needs.
Low capital requirement for registration
There is no limit on the amount of registered capital to open a company in Hong Kong. It is common to set the capital amount at HK$10,000 and the capital does not need to be kept in the company account for a long period of time, making it easier for start-ups and small businesses to set up a company.
Superior financial system
Hong Kong maintained its overall ranking of fourth in the world in the 33rd edition of the Global Financial Centres Index report. This fully reflects Hong Kong's strengths and advantages as a leading global financial centre, as it has a highly developed and stable financial system and enjoys a good reputation, allowing companies established in Hong Kong to freely conduct domestic and international remittances and transactions, facilitating business operations and international trade.
Market Springboard
Hong Kong is a cosmopolitan city with extensive international connections and networks, which makes it easier for companies to expand internationally.
Hong Kong is an important springboard for international enterprises to enter the Mainland China market from Hong Kong, and for Mainland China enterprises to enter the international market from Hong Kong. Through Hong Kong, we can create closer economic ties and facilitate trade.
Sound legal system
Hong Kong has an independent legal system and a stable rule of law environment and enjoys good business confidence. Companies operating in Hong Kong can rely on sound legal protection to safeguard their rights and legal status. For example, Hong Kong has stringent regulations on intellectual property rights, so you can have complete peace of mind when applying for design, patent, copyright and intellectual property protection.
Conclusion
The advantages of opening a company in Hong Kong include low tax rates, high business freedom, a favourable financial system, and the provision of springboard opportunities, which make Hong Kong an ideal location for many businesses to set up a company and expand their business.
If you have any questions about registering a Hong Kong company, please feel free to contact our team of business consultants. We provide one-stop business consultancy services from registering a Hong Kong company, opening a company account and secretarial services to help you start your business blueprint!
Extended reading: "TheHong Kong Company Lazybones】Hong Kong Company Formation Process, Fees, Time and Frequently Asked Questions in One Article》