Sunday, March 3

Special Reasons Why Investors Incorporate Companies in Hong Kong

Three women walking on the street.

Almost every entrepreneur is headed to Hong Kong. The jurisdiction, which enjoys significant autonomy from mainland China, is strategically located in Asia and has some of the most pro-business policies on the planet. To take advantage of the benefits associated with Hong Kong, you need to start by incorporating a company. In this post, we take a closer look at company registration in Hong Kong to identify the main reasons why you should also expand your business to this island. 

Prime Reasons for Incorporating a Company in Hong Kong 

The three primary reasons why most investors come to Hong Kong are that it serves as a gateway to mainland China, it provides easy access to the rest of Asia, and its taxes are super low. Let’s take a closer look at the three.

Hong Kong is an Excellent Gateway to China 

Because it serves as a Special Administrative Region of China, Hong Kong has a special association with the mainland. The most notable of these relationships is the Closer Economic Partnership Arrangement (CEPA), which allows a wide array of goods and services to flow into the mainland duty-free or at reduced rates. 

Once your company is incorporated in Hong Kong, access to mainland China will be pretty easy via road, rail, and airports. Therefore, you can start thinking of what to do with the large market of more than 1.4 billion people in China. This is an enormous opportunity that you cannot afford to miss. 

Registering a Company in Hong Kong Provides Easy Access to the Rest of Asian Markets 

The best way to grow a company is to constantly look for new markets, and Hong Kong offers you that opportunity. This means that in addition to China, Hong Kong also provides easy access to other countries in Asia. The jurisdiction is ranked among the most business-friendly cities, and its administration has forged multiple partnerships to help its businesses access larger markets. 

Whether you want to target the Japanese, Indian, or Australian market with new products, services, or imports, Hong Kong will make that even simpler. The only thing that you need is to incorporate the right type of company in Hong Kong, such as a limited liability company.

Hong Kong Enjoys Low Tax Rates

As an entrepreneur, one of the primary objectives is optimising profits. This can be pretty challenging in a jurisdiction that charges high taxes, but Hong Kong is the opposite. The country uses a two-tiered tax system that helps to spur growth and ensure investors retain the bulk of their profits. 

Under the two-tiered tax system, a business only pays 8.25% in corporate tax for the first HKD2 million of assessable profits. Then, the rest is charged the normal rate of 16.5%, which is still way below the rates of some of the neighbouring jurisdictions. See – why pay more when Hong Kong is offering a robust market and lower tax rates? 

In addition to low corporate taxes , Hong Kong does not impose withholding tax on interests, dividends, or rents. Withholding tax is only imposed on non-residents who use certain intellectual properties in the jurisdiction. 

These are only a few of the benefits that come from registering a company in Hong Kong. You are sure to enjoy even more, including an ample supply of staff and well-developed infrastructure. Remember that you can only enjoy the benefits we have listed above after registering a company on the island. This is never easy because of the long list of required documents and costs. 

The best way to register a company in Hong Kong is by working with an agency of experts. At GuideMeHongKong, you are sure to get passionate experts who are ready to hold your hands to success. With professionals on your side, company incorporation in Hong Kong will also be cheaper, faster and more convenient. You can never go wrong with experts on your side. 

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