Hong Kong has a business friendly environment.
Legal System
Laws of Hong Kong is based on the British Common Law System, it has well established rule of law, transparent regulations, low and predictable taxation.
Free Trade & Free Market
There is no restrictions on capital flows into and out of Hong Kong, and the foreign exchange market is mature and active. Hong Kong dollar has been pegged to US dollar at the rate of US$1 = HK$7.8.
Laws of Hong Kong is based on the British Common Law System, it has well established rule of law, transparent regulations, low and predictable taxation.
Free Trade & Free Market
There is no restrictions on capital flows into and out of Hong Kong, and the foreign exchange market is mature and active. Hong Kong dollar has been pegged to US dollar at the rate of US$1 = HK$7.8.
Corruption-free & Stable Society
Hong Kong has the Independent Commission Against Corruption (ICAC) to ensure that government and firms deal fairly and honestly.
Hong Kong has the Independent Commission Against Corruption (ICAC) to ensure that government and firms deal fairly and honestly.
Low and Predictable Tax
Taxes are levied on three types of income only - on profits, salaries and property rental. There is no value-added tax, sales tax, dividend withholding tax or capital gains tax. Only income sourced in Hong Kong is taxable.
Taxes are levied on three types of income only - on profits, salaries and property rental. There is no value-added tax, sales tax, dividend withholding tax or capital gains tax. Only income sourced in Hong Kong is taxable.
Workforce and Education
English is one of the two official languages and is widely used in government and the legal system, with 8 universities here there is no shortage of well-educated and competent bilingual or even trilingual professionals who speak English, Cantonese and Putonghua.
| Incorporation of a limited company in Hong Kong |
|
According to the Companies Ordinance of Hong Kong, every company must have at least 1 director and 1 shareholder. Director should have attained the age of 18 and should not be an undischarged bankrupt. There was no requirement that director or shareholder must be Hong Kong citizen. Every company must be incorporated with name in English or Chinese or both English and Chinese. Limited companies must end their names with the word "Limited". Normally, the certificate of Incorporation will be issued within six working days after application. Ready-made companies are available for our client’s instant use.
To save your time and effort, you may pass these work to us, we can handle all these work for you at a competitive fees. |
| Application for Business Registration |
|
All business carried on by an individual, partnership or incorporation must be registered with Business Registration Office within 1 month of its commencement. An overseas company that commences to carry on business in Hong Kong before the procedure for registration with the Companies Registry has been finalized may still apply for business registration within 1 month of such commencement of business. Standard official forms should be submitted together with supporting documents to the Business Registration Office. We are able to handle the application and provide constructive advice for your business.
|
| General Tax Information |
|
The corporate tax of 16.5% is among the lowest in the region. There is no import tariff for machines and raw materials. There is no tax on dividends. There is no capital gains tax. No VAT or sales tax. Hong Kong has instituted a generous tax deduction for research and development. Deductible items include expenditure on market research, feasibility studies and other research activities related to business and management sciences.
Generous depreciation allowances. An immediate 100% write-off for new expenditure on computer hardware and software. Initial allowance of 20% on capital expenditure incurred in the construction of industrial buildings and certain structures; an additional 4% per annum thereafter until the total expenditure is written off. A commercial building can qualify for a rebuilding allowance of 4% per annum.
Basically, company profits, salaries and property rental income, are taxable. This makes Hong Kong's effective overall tax bite much lower than virtually all other developed countries. Most other countries will tax away 40-50% of all income and profits, while in Hong Kong, that rate stands at about 16% and less in many situations. Only profits arising in Hong Kong from a trade, profession or business carried on in the territory are taxable. A company pays no tax in the territory on income derived from outside Hong Kong. Salaries tax is also only charged on Hong Kong sourced salaries. No tax is paid on foreign sourced income of any kind.
Deductions
Generally all expenses to the extent to which they have been incurred by a taxpayer in the production of chargeable profits are allowed as deductions. Losses can be carried forward and set off against future profits of that business. A corporation carrying on more than one commercial activity may have losses in one trade offset against profits of the other.
The Basis of Assessment
Liability to tax is based on the actual income of the year of assessment, but an initial charge is made for a Provisional Tax first. That is, the taxpayer will pay an estimated tax first (based on expected income for that tax year) and then at the end of the tax year will receive a follow-up bill for any additional tax owed.
Tax Computation
We have developed a sophisticated tax computation program to help our client to calculate the tax liability. All you have to do is to pass the necessary information and records to us. For more information, please contact us.
|