Given its strategic location, many entrepreneurs from the mentioned regions are eager to open a company in Hong Kong. This area is a hub of global commerce.
The flexible tax policy, reliable legal system, and active support for the private sector make Hong Kong particularly attractive for those looking to expand their presence in the rapidly developing Asian markets.
Advantages of Registering a Company in Hong Kong
It is worth noting the high resilience and flexibility of the Hong Kong economy, which has maintained leading positions in global rankings of economic freedom for decades. This is achieved through transparent business regulations, open markets, and a reliable property rights protection system based on common law. The process of establishing a company here is free from bureaucratic difficulties.
A developed infrastructure is another significant advantage, including logistics centers and technology hubs that ensure quick connections between companies, clients, and partners. Efficient transport hubs and high-quality telecommunications allow foreign companies to quickly adapt and use resources efficiently.
The legal system of Hong Kong, based on common law, guarantees a high level of predictability. The use of international norms and standards of business practice ensures the protection of entrepreneurs' rights and assets, which is especially important for international investors operating under conditions of transparency and contract stability.
Hong Kong is also attractive to investors due to the opportunity to invest in various sectors. Unlike many other countries, opening a company in Hong Kong does not require significant financial investments. The most promising areas include IT, e-commerce, and finance, which are actively supported by both the government and private funds.
The banking system in Hong Kong is one of the most developed in the world. Opening a bank account here provides access to multi-currency solutions and international financial instruments, as well as high service standards. The low level of corruption in the region strengthens trust in the financial system and reduces operational risks.
The tax policy of Hong Kong is another important argument in favor of choosing this jurisdiction. The standard corporate tax rate is only 16.5%, and for small and medium-sized enterprises, under certain conditions, it can be reduced to 8.25%. There is no VAT or goods and services tax in Hong Kong, which significantly reduces administrative burdens.
Additionally, the government offers business support programs — grants, incubators, development funds, and subsidies for innovative projects. These programs simplify the visa application process and relocation opportunities, allowing companies to easily move management and hire foreign employees.
Registration Forms for Foreigners in Hong Kong
At the initial stage, it is important to determine the target audience, positioning, competitive advantages, and marketing strategy. These factors serve as the foundation for the entire business structure. Neglecting them can lead to problems in the early stages of development and the inability to achieve planned results.
Foreign entrepreneurs can choose from various organizational forms for registering a company in Hong Kong. The most common is a private limited company (Ltd), suitable for startups as well as small and medium-sized enterprises. It requires only one director and one shareholder, and there is no minimum share capital requirement.
Another option is a partnership, which allows several individuals to combine their efforts. All terms, shares, and responsibilities are fixed in a partnership agreement. There are two types of partnerships:
- general, where all participants bear full responsibility;
- limited, where roles and risks are shared.
Companies wishing to operate in Hong Kong without creating a separate legal entity can open a branch. It does not have independent legal personality, and all obligations fall on the parent company. For foreign firms interested in the local market, establishing a representative office in Hong Kong can be an excellent solution, as it allows for research and marketing without engaging in commercial activities.
The process of registering a company in Hong Kong includes several key stages:
Registration of a unique name that meets local requirements and does not duplicate existing names.
Preparation and submission of incorporation documents to the Companies Registry.
Payment of registration fees and obtaining the Certificate of Incorporation.
The next step is to open a bank account. Hong Kong banks are known for their reliability and a variety of multi-currency instruments, making them convenient for international trade. Then, it is necessary to register with the tax authority and the social security system, which completes the formation of the company's official status.
It is important to remember that formal registration of a company is only the first step in legalizing a business. Many sectors require mandatory licensing, and without the appropriate permits, work in these areas is prohibited.
Taxes in Hong Kong: Tax Regime for International Companies
As of January 1, 2023, changes have been introduced in Hong Kong regarding the taxation of foreign passive income. Under the Foreign-sourced Income Exemption (FSIE) regime, part of the income from abroad may be recognized as income earned in Hong Kong. This applies to international corporate groups whose activities are related to Hong Kong.
Starting in 2024, certain categories of income will automatically be considered as earned in Hong Kong and subject to taxation at a rate of 16.5%. These include:
- interest;
- dividends;
- income from the sale of shares and stakes;
- profits from intellectual property assets.
The legislation also provides for exceptions. A company can avoid recalculating the tax base if it can prove its economic presence in Hong Kong — this applies to interest, dividends, and income from the sale of corporate rights. For intellectual property assets, it is necessary to confirm the connection with Hong Kong, and for dividends and income from the sale of stakes — to meet participation conditions. It is important to note that Hong Kong adheres to a territorial principle of taxation, and the FSIE regime does not apply to individuals and local companies that are not part of multinational groups.
Conclusion
Hong Kong, as one of the most dynamically developing economic spaces in Asia, attracts entrepreneurs looking to develop global projects and implement innovations.
Here, an environment has been formed where the free movement of capital is combined with flexible legislation. Foreign businessmen choose this region to enter Asian markets, optimize financial flows, and develop high technologies. In such conditions, it is important to choose the right legal form that will correspond to the business model and long-term plans of the owner.
Our team provides comprehensive support in registering companies in Hong Kong. We analyze the project's goals, assess investments, and study the proposed niche, forming recommendations for the optimal organizational form. We also provide post-registration support and consult on operational issues.
