Doing Business in Hong Kong VS Sri Lanka – A Comparison
Entrepreneurs and investors often face a tough decision when choosing the ideal location to establish or expand their businesses in Asia. Both Hong Kong and Sri Lanka offer unique advantages, making the choice even more challenging. Hong Kong is globally recognized for its competitive business landscape, high quality of life, and relatively lower costs for setting up small businesses. On the other hand, Sri Lanka attracts investors with its strategic location in South Asia and a growing economy backed by government incentives. This article explores the key factors to help you make an informed decision.
Key Comparison Points
Business Environment
- Hong Kong: A politically stable region with a robust legal framework and strong government support for businesses.
- Sri Lanka: A developing nation with improving political stability and government initiatives to attract foreign investment.
Taxation
- Hong Kong: Corporate tax rate of 16.5%, with no capital gains tax, making it highly tax-efficient for businesses.
- Sri Lanka: Corporate tax rates vary between 14% and 30%, with some tax incentives for specific industries, but capital gains tax applies.
Ease of Company Incorporation
- Hong Kong: A streamlined incorporation process with advanced digital infrastructure and minimal regulatory hurdles.
- Sri Lanka: Incorporation processes are improving but can still involve more bureaucratic steps compared to Hong Kong.
Cost of Living and Business Operations
- Hong Kong: Higher living expenses but relatively lower costs for setting up and operating smaller businesses.
- Sri Lanka: Lower living costs but operational costs can be higher due to infrastructure challenges.
Access to Markets
- Hong Kong: A global financial hub with excellent connectivity and free trade agreements with major economies.
- Sri Lanka: Strategic location in South Asia with access to regional markets and growing trade agreements.
Quick Comparison Overview
Here’s a quick overview of the key differences for easy reference.
Key Factors |
Hong Kong |
Sri Lanka |
Business Environment |
Politically stable with strong legal and government support |
Developing stability with government incentives |
Corporate Tax Rate |
16.5% |
14% to 30% |
Capital Gains Tax |
No |
Yes |
Ease of Incorporation |
Streamlined and digitalized |
Improving but bureaucratic |
Business Costs |
Lower for small businesses |
Higher due to infrastructure challenges |
Market Access |
Global financial hub with free trade agreements |
Strategic location with regional market access |

Benefits of Choosing 3E Accounting
When it comes to starting a business in Hong Kong, 3E Accounting is your trusted partner. With a proven track record of helping businesses establish themselves successfully, we provide expert guidance on seamless incorporation, taxation, and compliance to ensure a hassle-free process. Our cost-effective solutions cater to businesses of all sizes, helping you save time and resources while achieving your goals.
At 3E Accounting, we pride ourselves on offering comprehensive support and tailored services to meet the unique needs of your business. From registration to ongoing compliance, we guide you through every step of the process with our Hong Kong company incorporation services. For a detailed overview, check out our guide to open Hong Kong company registration. Ready to take the next step? Contact us today and let 3E Accounting help you turn your business vision into reality!
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Frequently Asked Questions
Hong Kong offers a politically stable environment, robust legal framework, streamlined incorporation processes, and tax-efficient policies. Learn more about starting a business in Hong Kong.
Hong Kong has a digitalized and streamlined company registration process, while Sri Lanka’s process is improving but involves more bureaucracy. Read more about Hong Kong company registration.
Hong Kong has a flat corporate tax rate of 16.5% with no capital gains tax, while Sri Lanka’s rates range from 14% to 30%, and capital gains tax applies.
Hong Kong has higher living expenses but lower operational costs for small businesses, whereas Sri Lanka offers lower living expenses but higher operational costs due to infrastructure challenges.
You can reach out to 3E Accounting for expert guidance and support. Visit our contact 3E Accounting page for more details.
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.