Tax Exemption for Company Registration in Hong Kong

Narendra Kumar

05 Mar, 2025

Hong Kong is primarily known for its liberal economic policies and the potential access to the massive Chinese markets. It is a route map to invest and trade with China. As per the records of World Bank, Hong Kong is ranked as the freest economy in the world for doing business. Hong Kong is an international city with advanced information and the freest harbor for trading in the world. For entrepreneur and Businessmen, Hong Kong provides the best business opportunity. Hence, Company Registration in Hong Kong is a viable option.

Benefits of Company Registration in Hong Kong

It is very convenient for the public or potential investor to register a company in Hong Kong as Hong Kong is on new rise of popularity for its active participation and initiative in Belt and Road Initiative and is known for its sound legal environment and independent execution which distinguish it from the Mainland China and adoption of English Law.

Ease of Doing Business and Registration

• Free to choose the Name of the Business as the government allows the name of the company to include words like foundation, association, international, united group etc.
• No requirement of physical office space to start and complete the company registration.
• Viable restriction of the Business Areas, i.e. Businesses like Jewellery, treasury, shipment, transportation, import and export and other hi-tech businesses can be done.
• Development in Low Taxation business environment, i.e. taxation in Hong Kong is very low.
• Credit is the crucial Factor, which is the basis in Hong Kong to develop international businesses and is readily available, as every street of Hong Kong has banks.

Excellent Business Environment to the Entrepreneurs and Businessmen for Operating Business

• No Language barrier as English is the official business language in Hong Kong and all the formal company documents are written in both English and vernacular language, which provides ease of doing business.
• Hong Kong has secured business credit and obtaining credit in relatively simple in Hong Kong.
• Being the least corrupt place in the world, it makes it easier for foreign investors to depend on the local business laws to protect their business and assets.

Types of Companies Formed In Hong Kong

The provisions and types of companies that can be formed in Hong Kong are relatively similar to the requirements of the Companies Act 2013. Choosing the right kind of business in a new place is an important decision to make, and there are several ways to do business and most popular is doing business through a limited company. The types of companies that can be formed in Hong Kong are:

The Company which is being registered in Hong Kong is required to deliver to the registrar the MOA and AOA of the company. The compliances of Hong Kong are similar to the compliances of the Indian Companies Act 2013^[1]. Once the company registers MOA and AOA in Hong Kong, ROC shall certify that the company has been incorporated.

Tax Exemptions for Company Registration in Hong Kong

• A company incorporated in Hong Kong is legally exempt if it has no operations. The lawful tax benefits make the city attractive to the Entrepreneur and businesses.
• Companies operating in Hong Kong, the Corporate Tax rate are lowest in Asia.
• The companies registered in Hong Kong will benefit from the international double tax treaties signed by the authorities (Government) to minimize retaining of tax on payments outside India.
• A company incorporated in Hong Kong enjoys free trade, and it does not charge tariffs on Import and Export. The further minimum procedure is kept for licensing and government registration.

Loopholes with Hong Kong Company Registration

• Restriction on certain nationalities who are not eligible for a Hong Kong Investment Visa like Afghanistan, Cambodia, North Korea, Nepal, Albania and Vietnam’s investor cannot register their business and are not eligible for Hong Kong investment business visa.
• The Threshold in Employment visa due to the highly skilled and experienced entrepreneur as the concerned person should provide the credentials of work and experience.
• Lack of workspace as due to lack of space, rental costs in Hong Kong are incredibly high.
• Due to very high global demands for their services, banks of Hong Kong have become very selective for their customer services.

Conclusion

As registration of a Company in Hong Kong is guided by the Hong Kong Companies Ordinance, incorporating a company in Hong Kong allows the foreign investors to take the benefit of legal tax exemption. Various companies set up the subsidiaries in Hong Kong. The labors are highly skilled with maximum literacy rate. It has also provided numerous infrastructure opportunities for accommodation as well as for other businesses like banking, entertainment and tourism.