Setting Up Business in Hong Kong

Being both the gateway to South China and the world, Hong Kong enjoys its unique geographic advantage. Hong Kong has been elected as the freest trade district for consecutive ten years. As an international finance centre, Hong Kong becomes the springboard for Chinese investors to the outside world and vice versa.

Business Environment

 Hong Kong has a sound legal system, free flow of capital, a simple and clear tax system, low tax rates and complete infrastructure. In short, Hong Kong provides a business environment of fair competition for investors both home and abroad.

According to the “Mainland and Hong Kong Closer Economic Partnership Arrangement” (CEPA) signed between the Chinese government and Hong Kong Special Administrative Region,  Hong Kong banks have been approved to handle Renminbi settlement for cross-border trading.  In addition, the Hong Kong business enjoys a preferential treatment in setting business in Mainland.

Legal system

The legal system in Hong Kong is based on English common law and is supplemented by the local laws. The legal system of Hong Kong exercises the principle of judicial independence, which are not  influenced by the administrative organ of the government or the legislature one.

Tax system

-  Profits tax: the tax rate is 16.5%.

-  Salary tax: the tax rate ranges from 2% to 17%.

-   Property tax: the tax rate is 15%

-   Duty: All goods are exempt from the duty except for imported cigarettes, wine, hydrocarbon oil and methanol.

-   No inheritance tax

-   No sales tax

- No Value Added tax

-   No capital gains tax

Exchange control

There are no exchange controls in Hong Kong. In addition, Hong Kong is the sixth largest foreign exchange trading centre, with a state-of-art foreign exchange clearing system.

Financial market

• Hong Kong enjoys a very high ranking amongst the world’s financial centres due to its high market transparency, strict disclosure requirements and prudent supervision.
• Hong Kong is one of the cities with the most international banks, where some 70 out of top 100 banks have operations in Hong Kong.
• Hong Kong is the third largest syndicated loan centre in Asia

Company Incorporation

Most companies in Hong Kong are limited companies, where the shareholders assume the limited liabilities proportionate to their subscribed equities, and the standard capital requirement is 10,000 Hong Kong dollars.