Are you considering expanding your company offshore? One of the challenges faced by foreign investors is determining the right jurisdiction to help drive the anticipated growth. Now, you do not have to worry anymore because we got the perfect answer: Hong Kong.
Hong Kong is a business paradise, a tried and tested jurisdiction that never disappoints. If you check closely, almost all multinationals, from Google to Volkswagen, have a huge presence on the island. So, this is your opportunity to also join and see your business move to the next level. Keep reading to learn about the benefits that come with company incorporation in Hong Kong.
A Brief about Hong Kong Economics
- The GDP of Hong Kong is USD 368.633 billion (nominal), according to 2021 estimates.
- Hong Kong is a highly developed free-market economy.
- Has a population of 7.5 million.
- The main economic strengths of Hong Kong include a robust banking ecosystem, a strong legal system, and virtually no public debt.
- Hong Kong boasts of an abundant supply of qualified labor from neighboring markets.
- Hong Kong Stock Exchange (HKEX) is the fourth largest stock market on the globe.
Why Select Hong Kong to Set Up a Business?
What is it that makes Hong Kong the perfect place for doing business? Heritage Foundation and Wall Street refer to the island as the world’s freest economy. This means that there is little interference from the government, and your business success depends on how good your product, brand, and marketing efforts are. Here are additional reasons why you should incorporate a company in Hong Kong.
Strategic Location in Asia-Pacific
When opening a company abroad, investors, entrepreneurs, and managers are mainly interested in the market size. Hong Kong is home to a sizable population of 7.5 million people, but you should look at the bigger picture here. Once your business is correctly registered in Hong Kong, the 1.4 billion population of China will be a stone-throw away, courtesy of the Closer Economic Partnership Arrangement (CEPA).
Hong Kong has also signed bilateral trade agreements with most of the countries in Asia-Pacific for you to exploit. So, it will be pretty easy to reach these countries, grow sales, increase revenue and become the multinational of your dreams.
Low and Attractive Tax Regime
Taxes and related policies are of great concern for entrepreneurs going offshore. On this front, Hong Kong stands taller than its peers because of its simplified and low tax regime. The jurisdiction uses a two-tiered tax system to help companies retain the bulk of their profits for growth.
Under the 2-tiered tax system, the first HK$2 million of assessable profit is taxed at 8.25% (50% of the rate recommended in Schedule 8 of the Hong Kong IRD), while revenue above that is charged the normal rate of 16.5%. This is not all:
- Hong does not impose withholding tax on interests, dividends, and rents.
- Personal tax is also low, starting from 2% and rising to a maximum of 17% for people earning more than HK$ 120,000.
Business Support for Growth and Success
As an island with little, if any, land for agriculture or mineral resources, Hong Kong turned to businesses to act as the primary source of revenue. This is why it has been very proactive in passing policies to help companies grow to become sources of income. So, whether you are expanding an already existing company or opening an entirely new startup, Hong Kong is the perfect lever for success.
These benefits are only a few of what you should anticipate from company incorporation in Hong Kong. You will also enjoy the highly developed infrastructure, liberal immigration policy, and diverse opportunities for growth. Remember that although the process of company registration in Hong Kong is so much simplified, the long list of documents, search for a company secretary, registered office, and additional business permits can make it a nightmare. Instead of booking multiple flights and trying to register a company on your own, the best alternative is to seek the help of an agency of experts.
Reach out to GMHK, the best agency for company registration, carrying out due diligence, and strategic formulation, for faster growth. You can never go wrong with the assistance of experts!