Hong Kong is on the south-east coast of China and consists of a large number of islands and a part of the mainland totalling approximately 1,025 sq. km. The principal areas are Hong Kong Island, Kowloon and the New Territories.
Status – A former British colony, Hong Kong reverted to the Chinese government on 1 July 1997. China converted Hong Kong into a Special Administrative Region of the People’s Republic of China retaining its current political, social, commercial and legal system for a minimum period of 50 years after 1 July 1997. Hong Kong’s legal system is separated from Mainland China’s, and English common law prevails. The Chinese government has assured a government based on the principles of “One Country, Two Systems” and “No change for 50 years”. Maintaining the laws Hong Kong had during its English rule and the assurances of the Chinese government guarantee a stable and mature legal system.
Capital – None
Official languages – Chinese, English
Currency – Hong Kong dollar (HKD)
Taxation – Taxation in Hong Kong is based on a territorial source principle. Hong Kong companies only pay tax on profits sourced in Hong Kong and the rate of taxation is currently 16.5% on assessable profits. Hong Kong companies do not pay tax on profits sourced outside Hong Kong. There are no withholding taxes on dividends paid to foreign shareholders, no withholding taxes on interest paid to foreign creditors, no taxes on capital gains, and no inheritance tax.
Advantages of setting up a company in Hong Kong.
Hong Kong has one of the most open and modern economies in the world. Hong Kong is a prosperous city and a world-renowned business and service hub. There is a complete understanding of world markets and those of the Mainland and how business is conducted worldwide. Hong Kong is not commonly referred to as an offshore financial centre but its tax advantages are significant for locally incorporated companies. Hong Kong is a major international financial centre with a large representation of banks, insurance companies, merchant banks, fund managers, venture capital companies and other financial intermediaries.
Hong Kong jurisdiction is mostly chosen for the following aims: trading, import/export, consulting service, holding companies, financial structures.