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INTERSHORES I Benefits To Open Offshore Company In Hong Kong

What are the advantages of an offshore company in Hong Kong?

 

1.   Tax system

i.    Businesses in Hong Kong are subjected to a Profits Tax Rate of 8.25%for the first assessable profits of HK$2million and thereafter 16.5% on the locally sourced income, which is lower than the worldwide average corporate tax rate of 23.85% measured across 177 jurisdictions. 

ii.   Hong Kong offshore company tax system is simple and beneficial for businesses. Businesses are completely exempted from tax on foreign income, capital gains tax, and withholding tax on dividends or interests. 

iii.  The government has an extensive network of Double Tax Agreements with over 45 countries.

 

2.   Effective incorporation process to open offshore company in Hong Kong

Hong Kong has a rank of 3rd out of 189 countries in terms of the Ease of Doing Business, according to the World Bank. 

i.   The setting up process of a company in Hong Kong is smooth and hassle-free without any bureaucracy or red tape. 

ii.   Businesses have to meet fewer requirements to incorporate the business, allowing for a fast registration process. In Hong Kong, businesses can be completely foreign-owned without a need for a local director or shareholder.

iii.  The incorporation process is also relatively less costly in Hong Kong than that in other countries such as the Cayman Islands.

iv.  Companies set up in Hong Kong have a lower compliance cost as they only need to file an annual tax return.

 

3.   Banking Facilities

Hong Kong is one of the leading financial centres in the Asian Pacific region, providing various facilities such as multi-currency accounts, internet banking, and more. 

 

4.  Business-friendly policies

i.    The Hong Kong government has issued various business-friendly policies to attract foreign investment. 

ii.   The government has issued various policies to protect the Intellectual Property Rights of businesses leading to the creation of a fair business environment.

iii.  Hong Kong has one of the freest economies in the world, as per the Index of Economic Freedom of 2019. This could be attributed to its open market and policies.

iv.  Hong Kong has a ranking of 3rd out of 141 countries in terms of its national competitiveness, as per the Global Competitiveness Index of 2019.

v.   There is no foreign exchange controls. 

vi.  Hong Kong government has a liberal immigration policy, allowing overseas investors or business owners to obtain required visas to come to the country.

 

5.   Business Reputation

i.     Despite having various tax reliefs provided to your business, the Organisation for Economic Cooperation and Development (OECD) does not consider Hong Kong to be a “tax haven” country unlike the Cayman Islands or the British Virgin Islands, which tends to give businesses negative publicity. 

ii.   Hong Kong adheres to the international standards on taxation information and exchange.

iii.  Businesses set up in Hong Kong have a good and credible image of the business among the various stakeholders of the business.

 

6.   Political and economic environment

i.    With the “one country, two systems” policy, Hong Kong has maintained its own political, economic, and judicial system, separate from China.

ii.   Hong Kong is in a transparent legal system. 

iii.  Hong Kong has a ranking of 11th out of 180 countries according to Transparency International’s Corruption Perception Index of 2020.

iv.  The Hong Kong Dollar (HKD) is pledged with  United States Dollar (USD), thus allowing the currency to be relatively stable. 

 

7.   Infrastructure and workforce

Hong Kong has a well-developed infrastructure with the availability of electricity, strong communication networks, an efficient transportation system, and more. 

i.   Hong Kong has a large and growing labour force that businesses can take advantage of. 

ii.   According to the Global Competitiveness Index of 2019, Hong Kong has a ranking of 3rd out of 141 countries in terms of infrastructure and 20th out of 141 countries in terms of a skilled and efficient labour force.

iii.  Hong Kong is a global trading hub with English as its second official language. Hence, businesses will not face any communication problems when operating in the country.

 

8.  Strategic location and connectivity

i.   Located on the southeast coast of China, Hong Kong is one of the best jurisdictions to set up offshore companies as it serves as a gateway to the Chinese and the entire Asian market.

ii.  With various ports and airports, Hong Kong has a sound network system connecting it to different countries worldwide. In fact, Hong Kong has a rank of 9th worldwide in terms of the busiest port.

 

How can INTERSHORES help you open offshore company in Hong Kong.

Our service package includes planning and strategizing with our clients to choose a suitable jurisdiction for their company and a suitable business entity; the registration of the company; assisting in opening a corporate bank account and yearly compliant.

 

Whatsapp : (852) 6499 4686

Phone : (852) 2186 6936

Email : info@intershores.hk

 

 

Disclaimer:

Whilst reasonable care has been taken in provision of information above, it does not constitute legal or other professional advice. INTERSHORES does not accept any responsibility, legal or otherwise, for any error omission and accepts no responsibility for any financial or other loss or damage that may result from its use.  In particular, readers are advised to take appropriate professional advice before committing themselves to any involvement in jurisdictions, vehicles or practice.

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