Hong Kong Business Formation

Hong Kong business formation provides an excellent tax-efficient corporate vehicle through which international business can be conducted. The following information will help you determine if Hong Kong business formation is the optimum solution to fulfill your international business objectives.

Hong Kong business formation is not perceived as a tax avoidance mechanism in an offshore tax haven. That said, if properly structured, forming a business in Hong Kong is a tax-exempt method of booking profits sourced outside Hong Kong (visit the Hong Kong Inland Revenue Department website for further information). A Hong Kong company also accesses double taxation Hong Kong has signed with other countries. To see a list of the countries Hong Kong has signed with, visit this webpage.

Hong Kong business formation presents an excellent reputation, making it an respected structure to promote to clients, suppliers, investors and venture capitalists.

Because of its regulated business environment and stable economy, business formation in Hong Kong is a secure, long-term structure. The lack of corruption in Hong Kong (see figures here), also facilitates business formation.

Hong Kong business formation allows for many opportunities to tap into the greater hinterland that is China. This gateway to China will be made more significant and accessible in the area of research and development, where the Shenzhen-Hong Kong Innovation Circle is designed to encourage overseas enterprises to do scientific research in Hong Kong. In addition, Hong Kong and Shenzhen are also jointly funding eight more R&D projects.

Formation of a business in Hong Kong is simple. The World Bank ranks Hong Kong as one of the world's easiest places to do business (see the rankings here).

Hong Kong’s has recently agreed to following the globally recognized Organisation for Economic Cooperation and Development (OECD) standards. Hong Kong business formation is a secure long-term option. To support business formation, Hong Kong offers the best corporate banking facilities in Asia, with banks like HSBC, DBS and Standard Chartered (refer to our offshore banking in Hong Kong page).

Business formation in Hong Kong also bodes well for a company’s competitiveness as Hong Kong has received more proof to support its case as being one of the most competitive cities in the world. The China Institute of City Competitiveness has ranked Hong Kong as No.1 out of China’s 289 cities in terms of business competitiveness.

Hong Kong business formation in the area of banking provides for new and exciting opportunities ahead as the government of Hong Kong is setting up a bond program to reinforce Hong Kong’s reputation as a global financial powerhouse.  Islamic Finance will be a focal point, with an aim to create a level playing field for Islamic and conventional banking products.

Forbes Tax Misery Index 2009 rated Hong Kong as having the 3rd lowest tax misery in the world. The index takes into account corporate income, employer social security, personal income, employee social security, wealth tax and VAT/sales. Forbes suggests the index can be used as a proxy to evaluate whether a country’s policy attracts or repels capital and talent.

Hong Kong business formation does not benefit from a good network of double taxation treaties.

Following Hong Kong business formation and according to Hong Kong law, annual accounts must be submitted for audit.

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