As it is, Hong Kong is one of the most sought-after locations for firms to relocate to in order to access the Asian market because of its advantageous location, numerous tax advantages, skilled labor, and well-established regulations.
If you wish to know more about the business incorporation process, refer to our guide on Hong Kong company formation.
BENEFITS OF MOVING YOUR BUSINESS TO HONG KONG IN 2023
Hong Kong boasts one of the most business-friendly tax systems and one of the lowest tax rates in the world.
Hong Kong implements a two-tiered corporate profit tax rate:
- 8.25 percent for taxable income under 2 million Hong Kong Dollars
- 16.5% for the portion that was exceeded
This policy is seen as being business-friendly because its corporate tax rate is among the lowest in Asia, whereas corporate taxes in some other nations might range from 17 to 30 percent.
Additionally, the Inland Revenue Department (IRD) offers a tax exemption to corporations with headquarters in Hong Kong for profits made outside of the region. This validation, known as an Offshore Claim, is given in the form of a letter and has a maximum validity of five years.
Hong Kong has double taxation agreements with 47 nations. It also provides access to financial investment. It has a well-established venture capital and private equity environment that enables new businesses and entrepreneurs to get funding to get off the ground or expand.
Free Economy and Trade
Due to the freedom of trade and money along with the transparency and integrity of its governments, the Hong Kong Special Administrative Region has maintained its top spot for more than 20 years.
Almost every lawful business, including trading, E-commerce, manufacturing, consulting services, and even owning financial assets, is acceptable in Hong Kong. Businesses based in Hong Kong are not subject to any limitations while opening bank accounts.
Aside from motor vehicles, alcoholic beverages, cigarettes, hydrocarbon oil, and methyl alcohol, there is no chargeable tax for products imported into Hong Kong.
Hong Kong, which is regarded as a free port, exempts tax and excise duty on all exports. Some commodities must be licensed before they may be shipped to or from Hong Kong, although the licensing procedure is simple.
As a result, it is clear that all types of currency exchange and money transfers are acceptable.
Access to china
Hong Kong’s business firms are able to grow into the Greater China market due to its proximity to China. This is because the Mainland of China and Hong Kong signed the CEPA, or Closer Economic Partnership Agreement, which is a free trade agreement.
Starting on January 1, 2006, there are no taxes on products coming from Hong Kong into Mainland China. This enables service providers in Hong Kong to receive special consideration when establishing firms in the majority of service industries in Mainland China, which are present here.
The agreement between Hong Kong and Mainland China came into effect on January 1st, 2018. If Hong Kong investors meet the requirements, they will be given preference for investment admission under this agreement. Its purpose is to support and safeguard investments for investors.
Hong Kong is not just one of the biggest business hubs, but it is also Asia’s center. It just takes 5 to 8 hours to fly to any country in this region because of the efficient and connected transportation.
With railroads, trams, ferries, double-decker buses, and minibusses, the transportation system is one of the most effective.
Furthermore, this nation has excellent telecommunications and a shipping hub. Victoria Harbor has one of the best natural environments for handling diverse types of vessels, making it one of the busiest ports.
The hotspot and internet connection speed in Hong Kong is one of the greatest in the world. In April 2020, Hong Kong was one of the first countries to launch 5G technology.
Around 96% of people in Hong Kong can speak Cantonese, and 51.9% can speak English, according to a survey. The fact that more than fifty percent of the population speaks both English and Chinese favors Hong Kong residents when doing business abroad.
It is essential that the staff members speak Mandarin or Cantonese if the applicant plans to conduct business with China.
Furthermore, Hong Kong’s educational system is superior to that of the majority of Asian nations.
Liberal Immigration Policy
In comparison to other nations, Hong Kong is considered to have friendly immigration laws. Depending on your eligibility and conditions, citizens of up to 164 different countries may enter Hong Kong for up to 180 days without a visa.
If the applicant has an entry permission or visitor visa and is temporarily visiting Hong Kong, he is allowed to execute contracts and conduct business negotiations. The work visa laws make it simple for business owners or those who are opening new offices in Hong Kong to relocate employees there.
Reach out to us at Relin Consultants – Leading Global Business Set Up Partners for further assistance with our Hong Kong offshore company formation services.