The Fabric of Hong Kong\u2019s Business Environment<\/strong><\/p>\n\n\n\n Famous for decades as a tax-free port, Hong Kong<\/u><\/a> has historically attracted many to its shores. After WWII and the establishment of the Inland Revenue Ordinance<\/u><\/a> in 1947, a more permanent tax system was created. Capped at 10% after the war, low income tax drew many businesses and foreign nationals<\/u><\/a> to select Hong Kong company formation solutions, transforming Hong Kong into the vibrant business center it is today.<\/p>\n\n\n\n Since then, Hong Kong has sought to maintain international competitiveness<\/u><\/a> and ensure measures that help grow Hong Kong\u2019s international status as a financial and business epicenter and also retain relatively beneficial economic policies for businesses and professionals. Currently. Hong Kong is the world leader in business-friendly tax systems<\/u><\/a> by the World Bank out of 190 jurisdictions.<\/p>\n\n\n\n Singapore<\/u><\/a> remains Hong Kong\u2019s largest competitor on the global business relocation market. In 2017, Chief Executive Carrier Lam Cheng Yuet-ngor introduced the two-tier system. Profits up to HK$2 million saw cuts by 50%.<\/p>\n\n\n\n In order to generate money for the city, the government largely depends on sources of revenue in real estate development. In the 2017-2018 fiscal year, Hong Kong made a revenue of HK$612 billion; 27% was generated from land sales, greater when factoring in the leasing of land.<\/p>\n\n\n\n Today, over 9,000 foreign firms<\/u><\/a> have set up businesses in Hong Kong, leading to the jurisdiction being ranked 3<\/u>rd<\/u><\/sup> for financial centers behind New York and London on the Global Financial Centres Index<\/u><\/a>. The majority of these businesses contribute to the service industry, a sector that provides 93% of the city\u2019s GDP<\/u><\/a>. Out of the 9,000 foreign businesses who opted for Hong Kong company formation, more than 1,500 of these have their regional headquarters based in the jurisdiction.<\/p>\n\n\n\n Setting Up a Business in Hong Kong<\/strong><\/p>\n\n\n\n With the entire process taking only about a week, incorporation in Hong Kong is a quick way to take advantage of the business and tax environment of the jurisdiction. Foreign nationals are able to completely own their business, even acting as both the sole director and shareholder.<\/p>\n\n\n\n The most common structure for Hong Kong company formation is a Limited Liability Company, either in the form of a Private Limited Company or Public Limited Company. Other options are available if a foreign national has another business already.<\/p>\n\n\n\n A Limited Liability Company is the easiest to incorporate in Hong Kong as it only takes applying for a business registration certificate with the Companies Registry overseen by the Companies Ordinance.<\/p>\n\n\n\n Private Limited Company<\/em><\/p>\n\n\n\n Most limited companies in Hong Kong take the form of Private Limited Companies as they are limited by shares, distributing the profits between the shareholders. Any loss will only correspond to the percentage of shares owned. Personal assets of the shareholders are protected from business liabilities.<\/p>\n\n\n\n Public Limited Company<\/em><\/p>\n\n\n\n The public company limited by shares is incorporated in Hong Kong through which the amount of shareholders can exceed 50. Debentures and shares are offered to the public and many of the public companies are listed on a public stock exchange. The share capital follows stringent regulations as the source is from the public.<\/p>\n\n\n\n Hong Kong Company Registration Process<\/em><\/p>\n\n\n\n Business registration of new Hong Kong companies is done through the Inland Revenue Department of Hong Kong. The company incorporation application also includes the business registration application. Once approved, the certificate of incorporation will need to be displayed always in an accessible area on office premises. The entire process takes approximately a week to complete.<\/p>\n\n\n\n Once incorporation in Hong Kong occurs, the next step is to open a bank account and meet the requirements of the selected bank for business activity. The professionals at The Aspen Trust Group<\/u><\/a> can help you research and go through the process of opening a bank account for a Hong Kong Limited Company or complete the application for Hong Kong company formation.<\/p>\n\n\n\n The Assets of <\/strong>Hong Kong Company Formation<\/strong><\/p>\n\n\n\n Several unique indicators make Hong Kong the international jurisdiction of choice for investors and business owners, one of the foremost being the city’s proximity to global markets.<\/p>\n\n\n\n Strategic Locale<\/em><\/p>\n\n\n\n As a facilitator of entry into mainland China, Hong Kong provides a key connection point for international businesses. Beyond that, Hong Kong company formation allows for these same businesses to reach crucial markets in both the West and the East. ASEAN countries have multiple ties to Hong Kong, making it an ideal location for aspiring businesses as well as established ones.<\/p>\n\n\n\n Moreover, this international mindset has helped shape a business environment that is compatible with the professional and cultural nuances of Western and Eastern conduct. Plenty of international flights and international business activity cater to foreign businesses and professionals, providing a unique gateway to other key jurisdictions in Europe and North America.<\/p>\n\n\n\n Hassle-Free Process<\/em><\/p>\n\n\n\n Another key benefit of Hong Kong company formation is the relative ease at which foreign investors can apply for the business registration certificate during the company formation process. In comparison to setting up a business in China, foreign businesses can pursue company incorporation in Hong Kong much quicker and under the English common laws of Hong Kong, leading to more transparency and order in the process. The legal environment of Hong Kong is quite consistent and requires less maintenance and oversight.<\/p>\n\n\n\n Furthermore, establishing a website in Hong Kong is also more straightforward and with a few optimized tweaks can still be accessible to a Chinese audience.<\/p>\n\n\n\n Greater IP Protections<\/em><\/p>\n\n\n\n As more businesses consider concerns over safeguarding their intellectual property (IP), Hong Kong company formation offers an environment where protections are guaranteed. The Intellectual Property Department of Hong Kong is a specialized department within the government committed to enforcing strict regulations and handling IP affairs.<\/p>\n\n\n\n Tax Optimization<\/em><\/p>\n\n\n\n Hong Kong company formation also comes with a range of tax benefits. The jurisdiction only has 3 direct taxes \u2013 profits tax, salaries tax, and property tax. Only income sourced within Hong Kong is subject to tax.<\/p>\n\n\n\n The corporate tax is 16.5%, but the first HK$2 million is only taxed at a rate of 8.25%. The personal income tax, known as the salaries tax, is progressive from 2 to 17%. The first HK$132,000 is tax-exempt as a personal deduction. Property tax on income from Hong Kong property is taxed at a rate of 10-20% depending on the date of purchase and sale.<\/p>\n\n\n\n Hong Kong does not have withholding tax, capital gains tax, sales tax, VAT, estate tax, or dividends tax.<\/p>\n\n\n\n Furthermore, The Heritage Foundation<\/u><\/a> has listed Hong Kong as the freest economy for the last two decades as a result of the open markets and legal system. Hong Kong company formation leads to more business potential in one of the most recognized financial centers in the world.<\/p>\n\n\n\n The Aspen Trust Group<\/u><\/a> has seasoned professionals that can make Hong Kong company formation a successful business step for you, placing you in a world-class business destination. Consult with our experts<\/u><\/a> today or read more about our relocation services<\/u><\/a> and start enjoying the benefits of setting up a company in the heart of Asia.<\/p>\n","protected":false},"excerpt":{"rendered":" Ideally situated in the hub of the Asian market, Hong Kong offers company formation benefits for any type of business hoping to achieve international and Asian market placement. As a city renowned for its business and financial environment, Hong Kong company formation is attracting investors and business owners alike to the tax-friendly jurisdiction with top …<\/p>\n![\"Company](\"https:\/\/aspentrust.com\/wp-content\/uploads\/2021\/02\/company-formation-in-hong-kong-victoria-harbour.jpg\")
<\/figure>\n\n\n\n![\"Start](\"https:\/\/aspentrust.com\/wp-content\/uploads\/2021\/02\/ship-in-hong-kong.jpg\")
<\/figure>\n\n\n\n