{"id":37818,"date":"2020-08-20T13:04:53","date_gmt":"2020-08-20T05:04:53","guid":{"rendered":"https:\/\/zegal.com\/?p=37818"},"modified":"2023-03-10T13:46:41","modified_gmt":"2023-03-10T05:46:41","slug":"benefits-setting-company-hong-kong","status":"publish","type":"post","link":"https:\/\/zegal.com\/en-hk\/blog\/post\/benefits-setting-company-hong-kong\/","title":{"rendered":"Benefits of Setting Up a Company in Hong Kong"},"content":{"rendered":"
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Photo by Unknown Wong on Unsplash<\/figcaption><\/figure>\n

Much of Hong Kong\u2019s appeal as a potential business destination can be attributed to the ease of setting up a business here. Online applications for incorporating and registering a business can be processed within one hour. If you are already in Hong Kong, the entire incorporation procedure can be completed in less than a week. Visitors to Hong Kong can stay up to 180 days without a Visa ( varies by nationality<\/a>), and directors can be of any nationality.<\/p>\n

Here is a handy chart filled with some of the myriad benefits to setting up shop in the 852:<\/p>\n

Benefits of Setting Up a Company in Hong Kong<\/b><\/h4>\n\n\n\n\n\n\n\n\n\n\n\n
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No need for a local Director or Shareholder<\/span><\/p>\n<\/td>\n

\n

This minimises your costs and simplifies management. For example, Singapore and Australia require a local resident Director who will then be part of the decision making procedures and wish to see books and records etc. <\/span>
\n<\/span>Other countries in SE Asia require either a local partner or entire local ownership. <\/span>
\n<\/span>Hong Kong does not have these requirements.\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n

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English common law system<\/span><\/p>\n<\/td>\n

\n

The legal framework is very familiar to those coming from the US and UK. The law is written in English and so easy to navigate.\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Best route to China<\/span><\/p>\n<\/td>\n

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It\u2019s location and political system ensure that either buying or selling into China is easier with a HK company.\u00a0<\/span><\/p>\n

Agreements such as the Closer Economic Partnership Arrangement (CEPA) and the Greater Bay Area initiative demonstrate this.\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n

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Freedom of capital<\/span><\/p>\n<\/td>\n

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The company can have several bank accounts, in different currencies and in different locations. There are no restrictions on movement of capital.\u00a0<\/span><\/p>\n

An RMB bank account may be set up to facilitate trade with China.\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Territorial taxation, and a low rate if taxed.\u00a0<\/span><\/p>\n<\/td>\n

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Hong Kong uses the territorial source principle of taxation, in which profits made outside of Hong Kong are tax-free.\u00a0<\/span><\/p>\n

Many online sellers pay 0% tax as their profits are not made in Hong Kong.\u00a0<\/span><\/p>\n

Revenue created inside Hong Kong and taxed at around 16.5%. There are large numbers of allowances and deductions possible.\u00a0<\/span><\/p>\n

There is no VAT or GST on sales.\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n

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No capital gain tax<\/span><\/p>\n<\/td>\n

\n

There is no capital gains tax in Hong Kong. A Hong Kong company selling it\u2019s assets )ie intellectual property) will not pay tax on the profits of this sale.\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n

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Simple Corporate Structure<\/span><\/p>\n<\/td>\n

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A Limited Company has no minimum capital requirement, can be set up very quickly, and changes such as a capital increase can happen very quickly<\/span><\/p>\n<\/td>\n<\/tr>\n

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Intellectual Property protection<\/span><\/p>\n<\/td>\n

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Intellectual Property registration, and enforcement of rights, is protected by Hong Kong law and straightforward.\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n

\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Regular Use Cases for Hong Kong companies:<\/b><\/h4>\n