The 10 benefits of setting up a company in Hong Kong

Hong Kong is a world-class city with trusted, business-friendly policies. The location provides access to an international market which makes it easy for companies from all over Asia and beyond to come here in search of opportunities.

For entrepreneurs looking at expanding their footprint abroad; there’s no better spot than Hong Kong!

We’re going to dive in and explain each of the key benefits of setting up a company in Hong Kong.

Free-trade policies

One advantage of setting up a business in Hong Kong is that it has no restrictions on investments, including both inward and outward.

There are also free-trade policies that allow for the open market economy to thrive. This means people can be confident they will be treated fairly by local laws as well as other businesses around them without having their opportunities limited just because they come from another country or culture.

Companies are quick and easy to set up in Hong Kong

Starting a business in Hong Kong is easy and quick. If you are keen on starting your own company,  five days could do it for you! As well as being user-friendly with its pro-business administration which has helped Hong Kong to rank in the top 3 countries when considering “ease of doing business“.

Low taxes with a simple tax system

Hong Kong has one of the most attractive and simple tax systems for foreign investors in all of Asia. This makes it a popular destination with many people looking to establish their companies and save money on taxes they would have incurred if they didn’t have a company registered here.

These factors make Hong Kong an especially great place for businesses who want both simplicity AND savings!

On top of it, another advantage to setting up a business in Hong Kong is that there’s no sales tax or VAT (valued added taxes). You also don’t have any withholding taxes on capital gains or dividends.

In 2017, the Hong Kong government announced they were cutting corporate taxes to help make Hong Kong competitive. As such, they announced profit and income earned by companies would only be taxed at 8.25% for revenue generated under HKD 2 million. This reduced tax rate remains in force as of October 2021.

Location

Located at the heart of Asia, Hong Kong is well connected with the world. So whether you would like to tap into Mainland China or other parts of APEJ (Asia Pacific Economic Zone), setting up your business here is a good option for success.

Low set up cost

The total cost of setting up a company in Hong Kong is relatively low in comparison to other countries. You can set up a company for slightly more than USD 1,250 and the annual renewal fees aren’t much either together with accountant and bookkeeping.

Free economy

One advantage of setting up a business in Hong Kong is that you can enjoy free trade, open markets, and enterprise without any interference from government.

With no restrictions on investments or ownership, this means there are few constraints for what type of company an entrepreneur wants their venture to be- which gives them plenty more opportunities when looking at expanding globally thanks to how international-minded our jurisdiction already makes us feel!

Access to Mainland China

One major advantage of setting up a business in Hong Kong is that it provides easy access to Mainland China. Under the Closer Economic Partnership Arrangement (CEPA), businesses hosting their companies in Hong Kong will have preferential treatment when entering and exporting from this region as part of an agreement signed between our Central People’s Government and HKSAR in 2020.

Legal system

One of the major advantages of starting a business in Hong Kong is its transparent law and order system. The establishment of the International Arbitration Centre has helped make this part of Asia, where disputes are resolved with arbitration instead of litigation or other means like mediation for example.

Another important point is that Hong Kong has a very developed bankruptcy process.  

Also, there’s no inheritance tax either so shareholders won’t have any extra costs – just peace of mind knowing everything will go well for them if anything should happen.

No local residency requirements

A foreigner is eligible for 100% ownership rights of a company incorporated and based in Hong Kong. The law does not impose local residency requirements, which means that the sole director can be any non-Hongkonger without having to have ties or citizenship here; another added advantage with this type of business structure? No physical address is needed!

Vibrant start-up community

The vibrant start-up community in Hong Kong is a big positive for people doing business. The thriving startup scene is perpetuated by government initiatives aimed at supporting entrepreneurship – such as the “Science Park” and “Cyberport”.

The Hong Kong start-up community provides an excellent environment and support network for people who want to do business in the city.

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