Why Hong Kong?
Starting a business in Hong Kong has a lot of advantages, following are the main ones to be considered when starting a business in Hong Kong.
Hong Kong is #3 in Ease of Doing Business report
1. World Bank’s Ease of Doing Business report ranks Hong Kong #3 out of 190 countries in he world.
Hong Kong was ranked #1 Economic Freedom
The Economic Freedom of the World by Canadian think tank Fraser Institute and The Index of Economic Freedom by Heritage Foundation ranked Hong Kong as #1 (out of 180 economies considered) in the world (2019 reports).
It’s very easy to start a company in Hong Kong
Hong Kong company can be incorporated with 1 director and 1 shareholder of any nationality (no residency requirements). There’s no paid up capital in Hong Kong and no physical office requirements. Company director and shareholders are not required to travel to Hong Kong in person during company registration. Hong Kong companies can obtain their business license in 1-3 days.
Hong Kong is a low tax jurisdiction
Hong Kong is one of the best low tax jurisdictions in the world:
– A Hong Kong company is legally tax exempt if it doesn’t have any Hong Kong sourced income, so a company can claim an “offshore status”;
– No withholding tax, sales tax, VAT, import-export and capital gains taxes in Hong Kong;
– If a company has operations in Hong Kong, the corporate tax is also one of the lowest in the world at 16.5% flat;
– Hong Kong resident companies (with operations in Hong Kong) will benefit from Hong Kong’s 37 double taxation treaties to lower their withholding tax on payments abroad;
– Hong Kong does not charge tariffs on imports and exports.
Minimal bureaucracy
Hong Kong has a very low level of bureaucracy: any licensing applications and other paperwork do not take long to apply and obtain.
English is an official language
Along with Chinese, English is an official language in Hong Kong. Cantonese is also widely used.
Business Credit
Getting a bank credit is comparatively easier in Hong Kong: Hong Kong is ranked #37 best jurisdiction in the world for securing business credit.
Financial Center
According to Global Financial Centers Index 2022, Hong Kong is #3 in the world, and naturally, almost all major financial firms, insurance companies, banks and asset managements firms have their offices in Hong Kong.
No Exchange Controls
No exchange controls to restrict Foreign Direct Investments or income repatriation, because of this Hong Kong can be an excellent location for treasury accounts, cash management accounts, and other corporate banking services.
Economic Zone
Hong Kong is a Special Administrative Region of China and a Free Economic Zone, therefore, it is a great location for foreign investors who want to have their regional distribution base and headquarters in this regions.
No Corruption
#12 least corrupt government in the world according to Corruption Perceptions Index.
Hong Kong is a low tax jurisdiction
Hong Kong is one of the best low tax jurisdictions in the world:
– A Hong Kong company is legally tax exempt if it doesn’t have any Hong Kong sourced income, so a company can claim an “offshore status”;
– No withholding tax, sales tax, VAT, import-export and capital gains taxes in Hong Kong;
– If a company has operations in Hong Kong, the corporate tax is also one of the lowest in the world at 16.5% flat;
– Hong Kong resident companies (with operations in Hong Kong) will benefit from Hong Kong’s 37 double taxation treaties to lower their withholding tax on payments abroad;
– Hong Kong does not charge tariffs on imports and exports.
Cost-effective incorporation
Registering and maintaining a company in Hong Kong is comparatively cheap.
Transportation hub
Hong Kong is an excellent international transportation hub with great connections and infrastructure facilities:
– Hong Kong’s international airport is the busiest in all of Asia and the Pacific, handling more than 50 million passengers seasonally and hosting direct flights to over 150 international destinations.
– More than 100 international shipping lines operate from Hong Kong, connecting to over 5,000 destinations worldwide.
Multi-currency bank accounts
Hong Kong corporate bank accounts come with multiple currencies, each with its own IBAN and SWIFT numbers, can directly receive payments from Amazon, PayPal, WeChat, Alipay, Shopify, eBay and other platforms.
Work visa
It is relatively easy to get a work visa and relocate to Hong Kong by registering a company.