For many reasons, the Hong Kong Special Administrative Region (SAR) of China is one of the best places to conduct business. It lies strategically in the heart of Asia, making it a gateway into the continental company. Enormous goods transit through Hong Kong by air, land, and sea before their final journey into other Asian countries. The region also has a booming services industry and a large economy in general.
This article will explain the benefits of registering a company in this region. They include:
Favorable Tax Laws
Hong Kong has a very simple taxation system. Corporations pay a flat rate of 8.25% on profits of up to $2 million and 16.5% on any assessable profits over $2 million. Personal income tax begins at 2% and goes up to 17% above HKD 132,000. These rates are relatively lower than what you’d pay in other Asian countries and regions.
This region has no value-added tax (VAT), sales tax, or goods and services tax (GST), which favors local businesses and residents. But, four types of goods are subject to an excise tax – hard liquors (over 30% volume), tobacco, hydrocarbon oil and methyl alcohol – whether locally manufactured or imported. The excise tax for hard liquor is 100%. The excise taxes for the three other goods vary based on quantity.
This tax-friendly system helps attract foreign investors.
Free Trade Policy With China
Hong Kong has a Free Trade Agreement (FTA) with mainland China, its much more economically powerful neighbor. This agreement is called the Closer Economic Partnership Arrangement (CEPA). It permits tariff-free exports from the region to mainland China.
This free trade agreement makes Hong Kong an ideal place to operate from and sell internationally to mainland China. It’s easier for foreign businesses targeting the Chinese market to set up operations in the region that move into mainland China itself.
To enjoy zero tariffs, your goods must have a valid Certificate of Hong Kong Origin issued by the Trade and Industry Department or one of the five government-approved certification organizations.
Availability of Skilled Workforce
Hong Kong has an abundance of skilled and educated workers that can help your business grow. The region has one of the highest education rates globally; of males and females aged 15-34, about 99% have attended secondary or higher education.
English is this region’s official language, so there’s no language barrier for foreign companies that want to hire workers. You can hire a lot of talented people for the right price.
Intellectual Property Laws
Hong Kong has strictly enforced regulations for corporate intellectual property (IP). You can file lawsuits against any party that infringes on your intellectual property, including trademarks, copyrights, patents, etc. The government’s Intellectual Property Department is well-known for upholding the rights of business owners.
Ease Of Setting Up A Company
Company formation is noticeably easy in this region. You’ll face less hassles starting a company here in the region than in neighboring mainland China. Hong Kong adheres to English common law, favoring an open economy and free trade. The corporate governance system works much faster; you can register companies and make further changes to your corporate structure in a few days.
No Local Director/Shareholder Requirement
Many countries and administrative regions require local companies to have at least one director or shareholder who is a local resident, but Hong Kong has no such requirement. Foreigners can own local companies in the region or serve as directors. This feature makes starting companies in the region easier, as you don’t need to stress yourself looking for local partners.
Conclusion
We have explained the main benefits of registering a company in Hong Kong. This region has a big economy that foreign businesses can capitalize on. If you ever want to set up a business in Asia, this region should be among the first on your list.
