Advantages of Hong Kong company registration
HK has been ranked as the world’s freest economy by the Heritage Foundation. Additionally, Hong Kong has also been ranked as the 2nd best place in the world to start a new business. This has essentially been due to the city’s strategic location and the strength of its liberal economic policies which are listed as follows:
- Clients can incorporate a limited company in HK in one week with a share capital of only US$1. Plus, Healy Consultants will not require our Client to travel to complete the engagement;
- Clients starting a business in HK will require only one director and one shareholder. Furthermore, these individuals are not mandated to be residents in the city of HK;
- A HK company is legally tax exempt if the entity has no customers and no suppliers within the city;
- For resident companies, the corporate tax rate is among the lowest in Asia at 16.5%;
- Setting up an Hong Kong offshore company is an excellent way to boost global profits as there are no withholding taxes, sales tax, VAT, import and export taxes and capital gains tax levied on the profits;
- A HK business benefits from 34 international double tax treaties that the government has signed to minimize withholding tax on payments abroad.
- A Hong Kong business is an efficient vehicle which faces minimal corruption, restrictions, and red tape. Consequently, the city is ranked as the 2nd best place in the world to start to a new business;
- English is the official business language in HK; all formal company documents are written in both English and Mandarin. As a result, a foreign entrepreneur is likely to find working in the city easy;
- Obtaining bank credit is very easy. Consequently, the city is ranked 4th best place in the world to obtain credit for business;
- A HK business benefits from the absence of exchange controls to restrict FDIs, currency accounts or repatriation of capital, and earnings;
- It is possible for a resident, regardless of nationality of the owner, to invest in every business sector in the city without any government restriction;
- Along with Singapore, HK is the leading financial centre in Asia. The city’s International Financial Centre hosts many global financial firms, insurance companies, banks, and asset management firms;
- HK is entirely a free economic zone in itself; therefore, a resident LLC is a gift for foreign investors who intend to use the city as a regional distribution base or headquarters;
- Being a founding member of the WTO, HK promotes free trade and does not charge tariffs on imports and exports. Furthermore, bureaucratic procedures like licensing and government registration are kept to a minimum;
- HK is ranked as the 14th least corrupt place in the world; this makes it easier for foreign investors to depend on the local laws to protect their assets;
- Hong Kong business portrays a positive image and is, hence, an excellent corporate vehicle to promote the company to global customers, suppliers, investors, venture capitalists, governments, and banks.
Gateway to Asia
- HK is the top choice for product distribution within Asia. The city has the world’s 2nd best infrastructure in the form of a natural deep sea port, busiest cargo airport, a well-developed rail and road system;
- The city’s strategic location makes it an ideal business gateway to Asia. A Hong Kong business allows foreign entrepreneurs easy access to the massive Chinese, Indian and Australian consumer markets;
- HK banks offer multiple currency personal and business bank accounts, including Japanese Yen, Chinese RMB, the Euro, US dollar, and other major currencies;
- The city is the historic import and export hub of the Asian continent. A large number of international trading companies and banks are based here which provide excellent trade finance facilities. Furthermore, strength of the city’s shipping and transportation sector attracts the world’s leading freight forwarders and shipping and insurance companies;
- HK is deemed as the most business friendly city in Asia. The city’s liberal policies attract both foreign investors and qualified labor from across Asia. Plus, it is the most preferred venue for international exhibitions and conferences.
- HK is Asia’s 3rd most liveable city, comprising of a multinational resident population. Plus, the city provides well-developed infrastructure for residential accommodation, tourism, banking, entertainment, and business;
- HK boasts highly skilled labor with a literacy rate of 96% and a computer literacy of around 95%. Furthermore, most skilled employees are bilingual in English and either Cantonese or Mandarin;
- Employees in HK understand the corporate culture in mainland China. Therefore, trading and doing business with the Chinese becomes very easy for HK resident company;
- All HK resident firms allow foreign investors to take advantage of legal tax exemption, while at the same time being able to extract funds from regional subsidiaries in the form of dividends, management fees and royalties;
- HK is a paradise for high net worth foreign entrepreneurs. The city currently hosts many wealthy Chinese entrepreneurs and is, as a result, synonymous with luxury and houses some of the biggest brands in the world.
|Interview with Aidan Healy on HK business registration|
Disadvantages of Hong Kong company registration
- A HK business registration requires annual submission of audited financial statements to the Inland Revenue Department. Our experts are HK accounting specialists and so, Healy Consultants assists our Clients efficiently and effectively complete this obligation;
- Banks in HK have become very selective of their customers due to the very high global demand for their services; consequently, opening a corporate bank account in HK can be a cumbersome process;
- To open a corporate bank account, the Client must to travel to HK for the account opening interview;
- Following HK business registration, obtaining an employment visa will be complicated due to stringent due diligence requirements. Foreign entrepreneurs must provide education and work experience credentials;
- HK has relatively weak intellectual property laws and protection, especially when compared to Singapore;
- Citizens of certain nationalities are not eligible for HK visa for the purpose of investment. Foreign investors from Afghanistan, Albania, Cambodia, Cuba, Laos, North Korea, Nepal and Vietnam cannot engage in HK business registration.
- Citizens of mainland China are ineligible for registering a company in HK unless they are permanent residents of another country or have lived abroad for at least one year;
- The quality of conversational English for an average HK employee is relatively poor when compared to the other investment hotspots like Singapore, Malaysia, Dubai and Indonesia;
- Effective from March 2014, every private limited company (LLC) must have at least one director who is a natural person, corporate director is not allowed.