Hong Kong Company Registration: The Advantages of Incorporation in Hong Kong
The investor’s craze for Hong Kong can baffle many. Thousands of companies are being registered in the region every month. Even so, the influx of business owners and investors isn’t slowing down anytime soon. In this article, we look at the most significant advantages of incorporation in Hong Kong:
Low Corporate Tax Rates
Hong Kong has one of the lowest corporate and personal tax rates in the world. The corporate tax rate is a fixed 16.5%. However, this rate is applicable only if your company makes more than HKD $2 million a year. If not, you will only need to pay a tax of 8.25%.
The personal tax rate starts at 2% and increases depending on the income. It goes up to 17% of your yearly income is above HK $200,000. Furthermore, Hong Kong has a territorial tax regime, meaning that you pay taxes only for the income that you make in Hong Kong.
Hong Kong has a stable economy. The government always completes its tenures, and there is no corruption or bureaucracy. One of the main advantages of incorporation in Hong Kong is that you can assure that a lot of innovation will keep taking place. Additionally, the good things about the economy, which includes the low tax rate, will last in perpetuity. Thus, your company procedures will be stable and secure for a long time.
Speaking of stability, the Hong Kong currency is the ninth most traded currency in the world. 1 USD is equal to around 7.75 HKD.
World’s Freest Economy
In addition to having a stable government, according to the index of economic freedom, Hong Kong is the freest economy in the world.
The supply and demand chain is fulfilled all by the entrepreneurs and the customers. Furthermore, the system treats foreign and local investors as one, with both of them getting equal perks of various incentives.
There are no restrictions on inward and outward restrictions, and 100% foreign ownership is available. Transportation of items across borders is affordable, and most of the Hong Kong products can be imported to China with zero tariffs. This also means that a company in Hong Kong will give you access to a market of billions of people.
A Strategic Location
Hong Kong is the gateway to mainland China. It’s also the connecting point between East and West Asia, with great relationships with the ASEAN countries. Reasons such as these have contributed to Hong Kong receiving the nickname of the ‘Heart of Asia’.
Hong Kong Airlines flies to more than 160 cities in the world. These consist of locations such as the USA, Tokyo, Seoul, Beijing, and every other major trade city in the world. Additionally, the region is alongside the ocean, so the sea trade is convenient as well.
Also, when talking about the advantages of incorporation in Hong Kong, we have to mention the language. With there being businesspeople and consumers with heritages across Asia, the business processes are mostly conducted in English even if 98% of the local population speaks Cantonese.
Companies in Hong Kong are known for their extensive use of the internet and technology. Furthermore, Hong Kong is one of the most developed areas in the world.
There isn’t a shortage of anything, from your basic needs to luxurious entertainment. You will always be within a driving distance of a hospital, grocery store, or a cinema, so you have that sense of security when living in the region. Furthermore, Hong Kong has societies from all around the world, so it shouldn’t be very difficult for you to fit in if you move here.
The Hong Kong school system is excellent and the literacy rate is 99%. Hence, there is no shortage of skilled workforce. The hiring of staff from other countries is also easy.
One of the most significant advantages of incorporation in Hong Kong is a great banking culture.
Did you know that the craze for opening an international offshore bank account was so high? There are so many applications that Hong Kong banks have to make their screening process stricter and actually reject applications. At this point, banks in Hong Kong have so many clients that they have to ‘think twice’ before letting a company open an account.
Well, don’t worry- as long as you have local elements like locally registered addresses, job opportunities, etc. and the right guidance, your company can easily open a bank account in Hong Kong. However, it could take a little more time for risky businesses like high-end jewelry stores, luxury watches, etc.
Hong Kong has 70 of the world’s largest 100 banks. With 164 licensed banks, 17 restricted license banks, and 13 deposit-taking companies, you have a lot of options on where you want to save your funds or do your transaction. Furthermore, almost every financial house in Hong Kong has the features of the modern banking system, including ATM, online banking, mobile apps, etc.
Ease of Registration
Registering a company in Hong Kong is easy if you know the process and have the right documents. It usually takes no less than two days to get the registration certificate. However, you may have to wait for some while to get the business permits and the corporate bank account.
However, given that there are various Hong Kong Incorporation Services that can take your requirements and register your company for you, it is growing increasingly convenient to form a venture. They will give you all the consultancy you need. This includes the types of businesses with their requirements and the documents for then. They also help you to craft an Articles of Association, and also later to get the business permits and bank account.
The registration is very much hassle-free than in other countries. If you have a viable business plan and can contribute to the Hong Kong economy, you will get the registration certification. You don’t even need to be physically present in Hong Kong to register a company here.
Hong Kong is the ideal place for investors across the world to start a business. This is due to favourable development indices, a strategic location, low taxes, ease of registration, corporate banking, and international connections. You open a world of opportunities when you start a company in the region.
However, despite the many advantages of incorporation in Hong Kong, the region still is one of the most expensive places in the world. This means you need to do a significant investment to fully capitalize on Hong Kong’s potential. Furthermore, competition can also be high in some sectors. You need to research properly and understand the market well before moving forward with your plans. In many cases, working with a business advisor can help.
You can contact 3E Accounting Hong Kong if you have any queries regarding the article. Also, contact us for the best corporate services in Hong Kong.