Benefits of setting up business in Hong Kong attracts many investors both at home and abroad coming here to seek opportunities. In 2018, World Bank evaluated different economies on their ease of doing business, in which Hong Kong secured 5th rank in ease of doing business and ranked 3rd one ease of starting a business. Hong Kong is known for its facilitating business environment, strong business policy structure and free-trade economy. The following are the detailed information for your reference.
I. Sound Legal System
Compared to Mainland China, Hong Kong has a more western mindset. You will find familiar procedures and documentation processes and most importantly, many government officials speak English in Hong Kong. It’s easier to comprehend business policies and bureaucratic system, which further encourages business activity.
II. Solid Infrastructure Facility
The infrastructure facilities in Hong Kong are what make the city so well-known worldwide to business owners. Hong Kong’s air and sea transport facilities provide world class service for all customers, so all shipping, logistics and freight forwarding services are first class and business owners can expect nothing but the best.
Part of what makes Hong Kong’s infrastructure so strong is its ideal location in the heart of the Asia-Pacific region. To match this ideal location, Hong Kong also holds an advanced telecommunication infrastructure that allows for cost effective prices for frequent travellers due to the decline in communication costs.
III. Tax Benefits
Hong Kong offers relatively more relaxed tax policies than Mainland China. Hong Kong operates on a territorial tax policy. This means zero tax will be levied on profits that are not earned within Hong Kong. And for limited companies, profits earned within Hong Kong will be subjected to a 16.5 percent income tax. And profits of the first HK$2 million is subject to the tax rate of 8.25%.
Moreover, to facilitate startups, Hong Kong allows new enterprises to file for VAT tax refunds. In addition to this, Hong Kong companies can also transfer their earning to other countries with a 5% transfer fee. In Mainland China, the transfer fee is higher. In addition, companies can only send a restricted amount to other countries.
Hong Kong also provides tax breaks to different sectors and business types. For example, Shenzhen region enjoys generous tax break in Hong Kong.
IV. Easy Business Setup for Business
Unlike many other countries who put a lot of restrictions on foreigners to open a business, China welcomes foreign entrepreneurs and business owners to develop their businesses in Hong Kong and provides them with the tools to grow successfully with little stress in the registry process of the business. The registration process in Hong Kong is significantly easier. The incorporation process can be conducted in English as well as Chinese.
If you need guidance on setting up a business in Hong Kong, you may get in touch with Tannet. We offer one-stop solutions for foreign businesses including company registration, accounting, tax filing, company management and intellectual property protection.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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