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Setting Up a Shipping Business in Hong Kong is a Jolly Good Idea
3E Accounting explains how to set up a shipping business in Hong Kong. Get ready to sail away to success!
Hong Kong is considered a world leader in the import-export business and has one of the busiest ports in the world. With its free port status, it is in the top ten brackets of global maritime centres. There is also massive support and concession from the government – such as profits tax exemption for international shipping. All these measures are aimed at encouraging the growth of this dynamic sector.
In Hong Kong (HK), the shipping business broadly covers ownership, management and logistics. Companies can own and operate vessels, or provide legal and insurance services, or engage in the repair and maintenance of ships. Whatever the nature of your shipping business, 3E Accounting is ready to help you cast away to achievement.
Hong Kong Maritime Beckons
The shipping business in HK is built primarily around the transportation of goods – either general goods or more niche products. To get started, you will need to decide on the type of company you want and incorporate it. The HK company registry has all the details. Generally, the types of companies that can be incorporated include:
- Sole Proprietorship or Partnership
- Limited Company
- Company Limited by Shares or Guarantee
- Branch Office
Next is to set up a corporate bank account followed by permits and licences. Those in the shipping business will also want to get in on the HK Shipping Register. Operated by the government, the HK Shipping Register is autonomous, and the fourth largest ship register in the world.
The HK Shipping Register allows registration from ownership of the vessel or demise charter – it is acceptable to all international ship finance banks. Do also read the government website on customs and clearances. It lists all the items that are prohibited or restricted with regard to import and export.
Tax regulations in HK are one of the world’s best and lowest. The system is simple, and based on the territorial principle – only income from within its jurisdiction is taxed. It does not levy:
- Capital gains tax
- Estate duty
- Annual net worth tax
- Interest or sales tax
- Withholding tax on service fees or interest payments
According to the Inland Revenue Department’s Ordnance (IRO), for those in the shipping business, profit tax will be imposed on ship owners. A shipowner is someone in HK who:
- Owns a ship
- Does the business of chartering or operating a ship
The IRO further states that a ‘shipping business’ occurs in HK if:
- The business is controlled or managed in HK
- The shipowner is a company incorporated in HK
- The ship calls at any location within HK waters (excluding casual calls)
The HK government also has made dedicated inroads to negotiate double taxation agreements. Check out our website on taxes for more on tax relief and exemptions.
Captain of Your Future
3E Accounting has the necessary expertise to get you started on your shipping business in Hong Kong. As skilled professionals with a tried and tested track record, 3E Accounting offers incomparable business solutions for your every need.