Hong Kong is one of the largest financial centers in the world and is on the list of the fastest growing countries in the region in economic terms, along with Japan, South Korea and Taiwan. These states are united by the common name "Four Dragons". Hong Kong is located in Southeast Asia, it includes the peninsula of the same name, as well as about 200 adjacent islands. Previously, until 1997, Hong Kong was part of the British possessions, but then it was returned to the jurisdiction of China, but after the return, autonomy will remain in Hong Kong for 50 years.
The Hong Kong government is focused on creating the most convenient conditions for registering companies and doing business. The activities of organizations registered in Hong Kong are regulated by the provisions of the current Companies Act. Trade, logistics, transport, Internet commerce, investment activities, provision of services, ownership and management of intellectual property results and many other sectors of the economy use Hong Kong as a powerful financial center with loyal taxation. In addition, registration in Hong Kong can be used by companies to solve a number of tasks: creation of holding structures, ownership of Chinese firms, establishment of a representative office in China, receipt of royalties, dividends, self-financing.
Hong Kong embodies legal and economic stability, a minimum of upheavals, coups, and changes of political courses. Such factors have a very positive effect on the pace of business development.
Advantages of registering a company in Hong Kong
1. Hong Kong Special Administrative Region (SAR) is a well-known international, industrial and financial center. The world's largest container port is located here, and it is the main gateway for investment and finance to China and the rest of Asia, because Hong Kong has a favorable geographical location and access to the largest markets in Asia. The official languages are English and Chinese.
2. Hong Kong has a very stable social and political environment. It is located on the threshold of mainland China and has excellent relations with it. For a company wishing to establish a presence in China, for example, to open factories in Shenzhen, etc., a Hong Kong company will certainly facilitate doing business. It can be structured in such a way as to own shares of a Chinese company. In 2003, a Closer Economic Partnership Agreement (CEPA) was signed between the Central People's Government and the Government of the Hong Kong Special Administrative Region, which entered into force on January 1, 2004. It provides preferential access to the Chinese market and reduced tariffs for qualified enterprises. This agreement is valid exclusively for Hong Kong. Thus, this further strengthens the position of the SAR as an ideal place to do business with China.
3. Hong Kong's policy is aimed at developing and strengthening global cooperation, which allows Hong Kong to maintain its position as a global financial center for a long time, which ensures economic stability and trade development.
4. Stability and reliability of the banking system. There are more than 135 licensed banks in Hong Kong, while more than 120 foreign banks have their representative offices there. Most banks have a network of branches around the world.
5. The absence of currency control, the presence of tax-free markets for gold, stocks and futures. In Hong Kong, there are practically no restrictions on foreign investment or the transfer of income and capital, which means that funds can be freely imported into and exported from the territory.
6. Confidentiality of information is one of the basic principles in Hong Kong law.
7. Comfortable conditions for entrepreneurship. Based on the British legal system, each limited liability company is a separate legal entity and is well protected by laws and regulations. Even in cases where the type of activity chosen by the founder requires obtaining a license (for example, a license must be obtained by travel agencies, currency exchange operators, financial organizations, realtors, restaurant business, etc.), the procedure for obtaining it is maximally simplified and does not take much time.
8. Freedom of investment. It is allowed to conduct investment activities both inside and outside the country.
9. The procedure for registering a new company is simplified as much as possible: personal presence is not required, everything happens remotely. The cost of registering and maintaining a company is relatively low compared to other offshore jurisdictions.
10. There are no customs duties, Hong Kong is a free port.
11. There is no requirement to actually pay the authorized capital, the authorized capital can only be declared in registration documents (the minimum amount of authorized capital in Hong Kong, which is declared on paper, is HK$ 10,000).
12. Hong Kong is one of the few countries in the world that is taxed on a territorial basis. Income earned outside Hong Kong is not taxed. Therefore, this means that a company that operates in Hong Kong but makes a profit elsewhere is not required to pay tax in Hong Kong on this profit. For example, if the cargo of a trading company is sent directly from a developing country, such as China, to a developed country, such as Germany, and negotiations, conclusion and execution of contracts are also carried out outside Hong Kong, then the income received from trade is not taxed in Hong Kong. If a business earns commissions by attracting buyers/suppliers of goods, and if the organization of such a business, which should be carried out between principals, is located outside Hong Kong, say, in the USA, the income received is also not subject to taxation in Hong Kong. Besides, the location of the bank accounts doesn't matter. For example, the aforementioned Hong Kong companies that have bank accounts in Hong Kong will not be taxed in this country.
Foreign income may include income in the following cases:
1. If the contract was signed outside the country, invoices are issued in Hong Kong;
2. if the services were provided outside Hong Kong;
3. If the product is not located in Hong Kong and was not sold in Hong Kong;
4. if there are no employees and a real office in Hong Kong.
Even if the company's activities are subject to taxation, the tax system in Hong Kong is simple and transparent. There is only one business tax in Hong Kong — income tax, and the rate is one of the lowest in the world — 16.5% of net profit (starting from April 1, 2018 or after that date, the corporate income tax rate for the first 2 million Hong Kong dollars is reduced to 8.25%).
The following are not subject to taxation: dividends and interest received on securities, capital gains. There is no VAT and other taxes on the turnover of the company in Hong Kong.
Thus, Hong Kong, as an international financial center, is considered an extremely cost-effective means of tax planning for business.
Organizational and legal forms of companies in Hong Kong
The following organizational and legal forms of companies are most common in Hong Kong:
• Limited Liability Company (Limited Liability Company)
The participants of this type of company are liable for the obligations of the company only within their share. This form is most common for small and medium-sized businesses.
• Private Limited Liability Company (Private Limited Company)
The number of shareholders of the company is limited. The company's shares cannot be placed on a securities exchange, and any transfer of shares is carried out in accordance with the procedure established by the company's Charter.
• Public Limited Company (Public Limited Company).
There are no restrictions on the maximum number of shareholders in this type of company. The shares can be freely traded on the securities exchange.
• Public company with liability limited by guarantee (Public Company Limited by Guarantee).
The capital of this company is not subject to division into shares. The liability of participants is limited to the guarantee of participants, not the number of shares.
We can register a Hong Kong company with a name of your choice or from our assortment list. We can do this quickly and efficiently, while providing the best recommendations on how to structure your new business. A new company can be created for your registered headquarters, for investment, for a project in China, for selling goods to other companies, etc. In addition, we can manage the company on your behalf by providing your registered office and acting as your company secretary. We can also provide nominee directors and shareholders of the company upon your request.