Company Incorporation Hong Kong
Hong Kong – Brief Description
For more than a century and a half, Hong Kong has been called “the Pearl of the Orient”. In 1843, the British took possession of what was then a small fishing village and, over time, converted it into a thriving metropolis. In Asia, Hong Kong became the bastion of open trade, free port and rule of law - all of which were lacking in the surrounding region. In July 1997, the colonial era ended; sovereignty reverted to China but Hong Kong was classified as a Special Administrative Region (SAR) within the People's Republic of China, with its own legal system.
Because of its liberal economic policies and potential access to Chinese market, Hong Kong is considered as having the freest economy and one of the best places in the world for doing business.
Advantages of Hong Kong Company
01.Limited Liability
As the investment in China is held by the Hong Kong incorporated company rather than by the foreign investor directly, there is no direct relationship between the foreign investor and the China investment. The foreign investor is therefore protected from any liabilities of the China investment as the Hong Kong incorporated company is a limited liability company, i.e. the foreign investors' liabilities is limited to the amount of share capital injected in the Hong Kong company and will not be personally liable. A Hong Kong private company has a separate legal entity distinct from its members, allowing it to acquire assets, go into debt, enter into contracts, sue or be sued in its own name. The shareholders’ liability to the company is limited to the amount of their respective share capital investment.
02.Absence of Exchange Control
There is no exchange control to restrict foreign direct investments or income repatriation in Hong Kong; hence, funds can be freely remitted into and out of Hong Kong without any restriction.
03.Low Tax Rates
Hong Kong has the lowest tax rates among all the places in the world. Currently, the corporate tax rate is at 16.5%. There is no capital gain tax, value-added tax, goods and services tax, sales tax, and withholding tax. Dividend income is likewise not subject to profits tax. Therefore, by setting up a Hong Kong company, the foreign investor can avail himself of the low tax rates in Hong Kong and minimize the tax liabilities arising from his investment in China through proper tax planning.
04.Stable Banking System
Hong Kong has one of the best banking systems in the world. Almost every major international bank has its branch or representative office in Hong Kong. Foreign investors will therefore easily find a suitable banker to arrange the finance and credit facilities required. The well-established banking and communications systems in Hong Kong also facilitate international trading and fund transfers.
05.Productive Workforce
Hong Kong has a pool of professional experts trained in all facets of international business - a skilled local workforce, who is well educated, computer-literate, productive, disciplined, competitive, and highly trainable.
06.Proximity to Mainland Chinese Market
CEPA opens up huge markets for Hong Kong goods and services, greatly enhancing the already close economic cooperation and integration between the Mainland and Hong Kong.In brief, the Mainland has applied zero import tariff for exports from Hong Kong in line with the enhanced CEPA origin rules for goods and preferential market access for Hong Kong companies in 47 service sectors, including banking, logistics, legal, audiovisual, transport and mining.
07.Ease of Incorporation
It only takes one week to complete a company incorporation procedure in Hong Kong. Furthermore, a physical office space is not required for company registration. As regards the number of director and shareholder, a Hong Kong company only requires one (1) director and one (1) shareholder who can be non-resident foreigners.