Introducing Hong Kong
Hong Kong is by no means a new jurisdiction; the British Empire took control of Hong Kong at the end of the first opium war in 1842, and keep control after the Second World War. During the early 90’s Hong Kong was amongst the fastest growing economies in the world. In 1997 Britain handed control of Hong Kong over to the Chinese. Today Hong Kong is one of the most prestigious jurisdictions in which to own a business, but there are far more benefits than simple prestige, in the paragraphs below we will try to highlight some of them.
Hong Kong Incorporation
Hong Kong is one of the Four “Asian Tigers” with Singapore, Taiwan, and South Korea. It is an extremely reputable low tax jurisdiction in which to form a company. However, unlike Singapore there is no requirement for the company to be run locally, thus 100% foreign ownership is permitted.
Hong Kong prior to January 2014 also allowed for all directors and shareholders to be corporate, but since then there is a requirement for at least one director to be a natural person who will be held on public record. Another favorable attribute of Hong Kong is its territorial taxation; only income which originated from within Hong Kong is subject to the corporate tax rate of 16.5%. Last but not least Hong Kong does not apply any form of sales tax (VAT).
Legal entities in Hong Kong
Without a doubt the most common legal entity to be formed in Hong Kong is a “Limited Company” often a private limited. The requirements and procedures to form and maintain private limited companies in Hong Kong are relatively straight forward and simple. LLP’s (limited liability partnership) have been available since 2012 but have not seen too much usage. The cost to form a company in Hong Kong ranges between 10,000 and 21,000 HKD which is approximately 1,300-2,700 USD.
Bookkeeping in Hong Kong
Bookkeeping is a must in Hong Kong, as standard most companies will use their service provider/ company secretary to do any necessary bookkeeping and or filing, though if your service provider does not provide such a service or you wish to outsource, there is a plentiful supply of accounting companies to choose from. Income tax is charged between 2% to 17%, total tax exemption is possible where the source of income can be shown to be from outside of Hong Kong. There is no capital gains tax, inheritance tax, wealth tax, or sales tax.
Bank account opening in Hong Kong
Hong Kong is one of the world leaders when it comes to banking, often setting the standards and leading the way on innovation. Generally speaking Hong Kong has good rates and brilliant customer service along with high stability, making them a popular choice. Hong Kong banks are open to most forms of companies including IBC’s (international business companies). There is a requirement for signatories to visit in person and there are minimum balance requirement’s, ranging from 5,000 to 100,000 HKD depending on the type of company and the bank used.
Conclusion on Hong Kong
If you are looking to form a company in a low tax to no tax jurisdiction, which has a historical prestigious and solid reputation, which is welcomed with most banks around the world, with a straight forward, swift, tried and tested system, look no further, Hong Kong is the jurisdiction for you!