Invest in Hong Kong
Hong Kong serves as a major business hub in South-east Asia. More companies want to invest in Hong Kong due to business-friendly schemes offered by the Government of Hong Kong. Hong Kong is set up as a Special Administrative Region (SAR), which provides a variety of benefits for business enterprises to flourish. This region is a free market economy, making it easy for entrepreneurs and foreign investors to carry out business activities in Hong Kong. As per government records, the number of registered companies present in Hong Kong until 2020 is 1,381,218. Hong Kong follows the common law system in the world and is a tax-friendly jurisdiction. All these incentives attract companies to invest in Hong Kong.
Reasons to invest in Hong Kong
Companies consider investing in Hong Kong as the government is supportive. Hong Kong is fast-paced when it comes to innovation and disruptive technologies. However, the following factors make Hong Kong a place for investment:
Government Incentives Support
The government is one of the main criteria for a business to invest in Hong Kong. Without any form of preliminary support, investors would not be willing to carry out any form of investment in Hong Kong. The Government of Hong Kong offers the following incentives:
- Services by Professionals
Professional services firm such as lawyers and accountants is highly regulated. Hence Implementation of different rules for these professionals is straightforward.
- Creative Sectors
The Government of Hong Kong has invested about HKD 800 Million to develop the Art sectors in Hong Kong. This investment is to sponsor culture and arts in all parts of the Hong Kong SAR.
- A Hub for Talent
Due to the multicultural environment present in Hong Kong, there is scope for development of varied talent. Many institutions offer professional services and research programs for technology and development in Hong Kong.
- Hong Kong Government Policy 2019
Some of the schemes offered by the Government of Hong Kong are:
- The government has brought out a plan to improve the acquisition of technology talent for different sectors.
- For the promotion of innovation and entrepreneurship, the government has injected more than HKD 400 million in the Entrepreneurship Development Fund.
- Around HKD 1 Billion is invested in a fund for budding entrepreneurs. This is under one of the Mainland and Free Trade Agreement Programme.
- More than HKD 900 million has been allocated to the development of exports and other industries in Hong Kong.
- Tax incentives and different forms of concessions are available for businesses. Apart from this, the government has also included a guarantee scheme for small and medium enterprises.
There are different tax incentives offered in Hong Kong. Due to this, corporations and investors want to invest in Hong Kong. The Government of Hong Kong charges the following tax:
- Corporation Tax
There are specific taxes present in Hong Kong for corporations. Profit tax is one such tax that is present in Hong Kong. The profit tax in Hong Kong is levied at the rate of 8.25%. This form of tax is charged on business entities that have profits of more than HKD 2 Million. Organizations that have profits of more than this amount are charged more than the above rate. This amount of tax is charged for companies that are registered. For unincorporated entities, the amount of corporate tax charged varies according to the type of entity. In Hong Kong, there is no form of Sales Tax or Value Added Tax levied on the goods and services. Shareholders of corporations receive dividends which are exempt from tax. There is no form of capital gains tax which is charged on the property.
- Free Trade Area
The territory of Hong Kong has a free trade policy. This makes it easier for companies and businesses to carry out their respective businesses without any disruptions.
Hong Kong is one of the global destinations for businesses to commence their operations. The government of Hong Kong has brought out several schemes to allow seamless market activities in Hong Kong without any form of disruption. The legal, economic, and political system in Hong Kong is well regulated. Hence businesses do not have any issues in conducting their business. The Government of Hong Kong offers the following incentives:
- There is no form of restrictions present in areas of Foreign Investment and Ownership. Due to this, a business can be owned by foreign shareholders.
- Hong Kong offers a multi-lingual environment where different languages such as Cantonese, Mandarin, and English are spoken. However, the primary languages used in transactions and contracts are English and Mandarin.
- The free trade policy allows the movement of the people, capital, goods, and services within Mainland China.
- Hong Kong is globally accepted as a financial centre in the world. Due to this, it has international recognition.
- Hong Kong is considered as one of the most competitive economies in 2020. This is due to several factors, such as seamless business laws, effective exchange rates, and appropriate institutional framework when it comes to the governance of companies.
- Hong Kong offers international recognition of the intellectual property rights of an organization.
The Government of Hong Kong offers a world-class infrastructure for businesses to thrive and grow. Hong Kong offers global leading logistics services for companies that supply goods and services throughout the world. International Commercial airline connectivity is more from Hong Kong, which connects major financial centres across the globe, such as New York, London, and San Francisco. Hong Kong offers not only world-class infrastructural facilities, but also offers domestic infrastructural facilities.
Financial Hub in South-East Asia
Hong Kong is located in a prime area globally. It connects the major producing countries such as China and America. Due to this lot of business comes through Hong Kong. Hong Kong is connected well globally and in South East Asia. The common law system, free trade area, and international presence offered in Hong Kong make it easier for businesses to establish their operations without any issues. The following aspects make Hong Kong an international financial centre:
- Digital and Innovative
The Government of Hong Kong has digitalized its economy to adapt according to the changes in the world. Innovative and disruptive hubs, known as regulatory sandboxes, have been set up to test finance and innovative products. All these benefits attract more companies to invest in Hong Kong. When companies invest in Hong Kong in these sectors, they get an opportunity to learn from future-driven technologies.
- Trading Agreements
Hong Kong has taken efforts to enter into a different form of free trade agreements with the government of other countries, increasing the connectivity of trade and business. Through these trade agreements, they can transfer technology and R & D from one country to another. The main regulatory body for trading within the HK SAR is the Economic and Trade Offices. Till now, Hong Kong has entered into different trade agreements with different countries. Example- Hong Kong has a Free Trade Agreement with the European Union.
- Third Largest Financial Centre in the world
Hong Kong has climbed to become the third-largest financial centre. Due to this, many businesses are setting up financial services offices in Hong Kong. All these benefits attract more companies to invest in Hong Kong.
Hong Kong offers one of the best talent pools for organizations to gain benefits. Citizens from all over the world are present in Hong Kong. Foreign investors will prefer this form of talent when it comes to hiring. The Government of Hong Kong has brought out different programs for increasing the talent pool in Artificial intelligence, applied science, and information technology.
Vibrant Business Environment
A business that wants to invest in Hong Kong get benefits such as a world-class business environment. Apart from this, there is no form of a language barrier in Hong Kong as citizens speak mandarin and English.
Setting up a Business in Hong Kong
Choosing a Business Structure
A company planning to invest in Hong Kong has to choose the type of company or entity to conduct business.
Registering the Company
Once an investor has chosen a business structure, the next step is to register the business. A corporation or a private limited company will be registered under the Companies Ordinance of Hong Kong. The business can be registered either through the electronic portal. This portal is known as the company registry portal, which is an online portal (e-portal). Specific documents must be submitted to the Companies Registry (CR).
Opening a Bank Account for the Company
After registering the business, the company has to open a bank account, a business bank account.
Documents Required (Invest in Hong Kong)
For company registration
- Form- NNC1 (a company limited by shares).
- Form-NNC1G(a company which is not limited by shares).
- Articles of Association of the Company.
- IRBR1- Document related to Notice of Business Registration of the Office.
- Business Fee which is collected for Registration.
- Insolvency Fund: 1-year fee- HKD 250 and for a three-year fee – HKD 750.
Enterslice Advantage- Invest in Hong Kong
At Enterslice, we have expert professionals who can assist you in developing your business globally. Our professionals have assisted businesses to invest in Hong Kong. Using our service will provide you with the following advantages:
- We help you to develop an investment budget and business plan for investing in Hong Kong.
- We also offer documentation support services.
- We also offer post monitoring compliance service.
- We will liaise on your behalf with regulatory authorities in Hong Kong.