Top Advantages of Hong Kong Company Incorporation
The credit for Hong Kong’s reputation as a booming business destination can be given to the ease of establishing a business there. Filing an application for registration a Hong Kong company takes only a few hours. Moreover, if the applicant is in Hong Kong, the entire Hong Kong company incorporation procedure may not take more than one week. Further, there is no bar to having a resident director for incorporating your business, which adds to the many advantages this great country offers.
This piece of writing lists the top advantages of Hong Kong company incorporation.
Advantages of Hong Kong company incorporation
The top advantages of Hong Kong Company incorporation are as follows:
- Strategic location: Hong Kong’s position is strategically located at the heart of the Asian continent, with a few hours’ flights connecting it to the most important markets in the Asia-Pacific region. Additionally, it acts as one of the gateways to the Mainland Chinese market with a few hours of connectivity to the major economic centres in China such as Shanghai, Beijing etc. Further, the Hong Kong International Airport is one of the most connected airports in the world, servicing over 180 destinations across the world.
- Ease of Establishing and Doing business: Hong Kong is one of the best places for incorporating your business in the form of a company. One can easily incorporate a company in Hong Kong within a short span of two weeks. It possesses excellent infrastructure and business facilities. The Intellectual Property framework is also robust with the availability of a number of dispute resolution channels. To support that, one can easily relocate to Hong Kong by applying for a visa. Further, Hong Kong finds its place within the top five positions in the reports released by international organisations, such as World Bank’s ease of doing business ranking, Forbes list of best countries for business, World Economic Forum’s world’s fastest place to start a business and Global Competitiveness Index.
- Business-friendly tax regime: Hong Kong’s simple and business-friendly tax framework is responsible for attracting investors from around the world to start their businesses in this great country. Businessmen are always on the lookout for the lowest tax jurisdictions across the world. Hong Kong boasts itself to be one of the lowest tax jurisdictions having the necessary ecosystem to support businesses. The personal income tax rate starts at 2% and goes up to 17%. On the other hand, the corporate tax rate has been fixed at 16.5% of the assessable profits for corporations and 15% for unincorporated businesses. Moreover, there is no capital gains tax, withholding tax and VAT in Hong Kong. Only GST is applicable, that too at a minuscule percentage of 5%.
- One of the freest economies: Hong Kong is one of the very few economies following the principles of free trade, free enterprise and free markets, which is responsible for consistent growth in Hong Kong’s GDP. No restrictions have been imposed on inward, and outward investments, no foreign exchange controls and no restrictions on foreign ownership have been imposed in Hong Kong. Further, due to its free trade agreement with mainland China, almost all the goods can make their way tariff-free into the Chinese market.
- Requisite Business ecosystem: Hong Kong government has established a number of centres for increasing the growth and improving the productivity of the business. Special emphasis has been given to them in order to foster the growth of SMEs in Hong Kong. Certain dedicated organisations such as HK Trade Development Council, HK Productivity Council, and Support and Consultation Centre for SMEs have been established to foster the growth of businesses in Hong Kong. Further, the government has made enormous efforts to upgrade its infrastructure in order to provide a business-friendly ecosystem for the business to flourish. World-class science and technology parks, industrial parks etc., contribute to the advantages of Hong Kong company incorporation.
- A liberal immigration policy: Hong Kongoffers visa-free visits to nationals of about 170 countries. Even business negotiations and signing of contracts are permitted for short-term visitors on a visitor visa. Further, dependent visas are easily issued by the Authority.
- A common law system: Hong Kong’s legal system is known for its transparency, order and equality before the law. Its legal system is different from mainland China; instead, English common law prevails. On top of that, the Intellectual Property Rights framework in Hong Kong is well developed. Hong Kong is also a key arbitration centre in Asia, with the establishment of the International Arbitration Centre in 1985.
- Quality of life: Most of the professionals and businessmen who incorporate their companies in Hong Kong tend to relocate with their families, making Hong Kong a unique blend of cultures and having modern amenities with a well-connected transportation system. Hong Kong also takes pride in having world-class health services and one of the lowest crime rates in the world.
Whenever a businessman or entrepreneur plans to incorporate his business into a company, he not only takes into account the tax regime but also a conducive business ecosystem which includes clean governance, productive workforce, quality of life, robust infrastructure, corruption-free economy etc. whiles selecting the place for incorporating its business. Hong Kong company incorporation offers a basket of advantages for an entrepreneur to select Hong Kong as the destination for incorporating his company.
Read our Article: Procedure for Company Formation in Hong Kong
Prabhat has done his BA LLB (Hons) and has been writing research papers since his law school days. His interest in content writing made him pursue a career in legal research and content writing. His core areas of interest are indirect taxes, finance and real estate.