Benefits of setting up a company in Hong Kong

More and more foreign investors and companies are choosing Hong Kong (China) as a destination to establish companies and expand their markets abroad. Hong Kong has a strategic geographical location, a highly productive and efficient workforce, and a stable economic and political environment. In particular, the attractive tax system, safe legal system, and high information security are attractive factors attracting foreign investment here.

In this article, GLA will list in detail all the attractive benefits that attract foreign investors to set up a company in Hong Kong to help you clearly understand the advantages in this country before deciding to invest. 

1. Prime strategic location

First of all, Hong Kong is located in the heart of Asia. With just a 5-8 hour flight, you can connect to most markets in the Asia-Pacific region. If you are planning to "attack" the Chinese market, Hong Kong is the perfect choice.

Hong Kong is located on the southeast coast of China, at the gateway to the Pearl River Delta. Therefore, traveling between Hong Kong, Beijing, Shanghai and other major cities in China will be convenient and only take about a day.

In 2023, Hong Kong International Airport (HKIA) retained its position as the world's busiest cargo airport, marking the 13th consecutive year that HKIA has topped the list since 2010. Hong Kong Airport is currently home to 130 airlines with 220 destinations, including major cities in the Asia Pacific region, North America, Europe, the Middle East and destinations in China. This airport plays an important role as a transportation hub in the Asian region. 

Cross-boundary ferries provide fast, round-trip sea transport to and from six major mainland ports and coach services, covering more than 90 cities and towns in the Pearl River Delta basin. Hong Kong International Airport HKIA is regularly ranked as the "World's Best Airport" and has received numerous awards.

Hong Kong is also the epicentre of all maritime activity in southern China and is one of the world's largest ports in terms of equipment usage, handling, and heavy-duty passenger and cargo handling. 

2. Easy and convenient business

Hong Kong has always been known as an easy country to set up a company. The time to set up a company in Hong Kong is about 2 weeks. Infrastructure and business agencies are always easy to access. Intellectual property is protected and strictly enforced, with strict regulations. There are many different dispute resolution channels that companies can use, The simple tax system is always attractive and attracts foreign investors to the city. If you want to set up a company in Hong Kong, you can easily move and resettle to Hong Kong by applying visa, Hong Kong visa work here 

In IDM Report First 6 Months of 2024, Hong Kong ranked 5th globally, up 2 places compared to 2023. In particular, Hong Kong continues to rank highest in "International trade" and third globally in "International Investment". Hong Kong's score and ranking in Economy.

3. Extremely attractive tax incentives

Taxation is a major concern for all investors when planning to set up a company overseas. With its favorable tax policies, Hong Kong boasts one of the lowest tax jurisdictions in the world. 

• Personal income tax (PIT/Salary tax) from 2018/29 to 2023/24 will apply a tax rate of 5% for income below the first HK$5 million and 16% for the remaining income above HK$5 million. Before 2018/19, personal income tax rates ranged from 2% to 17%. 
• For companies and corporations in Hong Kong, there are two options for paying corporate tax: single-tier tax and two-tier tax. 
  • Single-tier tax: Companies that elect single-tier taxation are subject to a 16,5% tax rate on taxable profits and unincorporated businesses are subject to a 15% tax rate. 
  • Two-tier tax: An incorporated company that elects the two-tier tax will be subject to a tax rate of 2% on the first HK$8,25 million of profits and the remaining profits will continue to be taxed at a rate of 2%. An unincorporated business that elects the two-tier tax will be subject to a tax rate of 16,5% on the first HK$2 million of profits and the remaining profits will be taxed at a rate of 7,5%. 
• Taxes that are not applicable in Hong Kong include: capital gains tax, withholding tax on dividends and interest or social security benefits, value added tax (VAT) or GST.

To better understand the tax system in Hong Kong, please refer to the article: Overview of the corporate tax system in Hong Kong.

4. The freest economy in the world 

Hong Kong is one of the world's most dynamic economies, with principles of free enterprise, free trade and open markets. Hong Kong has no restrictions on inward or outward investment flows, no foreign exchange controls and no foreign ownership restrictions.

Factors such as a reliable banking system, virtually no public debt, a strong legal system, sizable foreign exchange reserves and a strict anti-corruption regime have consistently reinforced Hong Kong's position as a business-friendly region.

5. Support and assistance to foreign companies 

A number of programmes have been set up by the Hong Kong government and the private sector to help companies and enterprises develop and innovate in all aspects of their business. A number of business support programmes and financial incentives have also been established to promote the development of SMEs.

Organizations such as the Hong Kong Trade Development Council help national companies do business in mainland China and Asia, and it also supports Hong Kong companies in finding new markets.

The Hong Kong Productivity Council promotes productivity and the use of more efficient methods throughout Hong Kong's business sectors. The Support and Consultation Centre for SMEs provides comprehensive advice and information to small businesses. Financial assistance is available through the Government Grant Scheme.

6. Direct access to China 

Hong Kong has a prime geographical location, a gateway to the mainland (China) and Asia. From Hong Kong, you can travel to cities and central gateways in China within just 1 day. Hong Kong and China have signed world economic agreements including: the Mainland and Hong Kong Closer Economic Partnership Arrangement (“CEPA”) - a free trade agreement between the Central Government and the Hong Kong Special Administrative Region Government, the free trade agreement (FTA) signed between Hong Kong SAR and ASEAN and effective since 2017.

All eligible goods originating from Hong Kong can be exported to China duty-free. Furthermore, Hong Kong service providers in 40 regions are eligible for preferential treatment in providing services in the mainland (China). The favorable geographical location and bilateral trade agreements between Hong Kong and other countries will help your Hong Kong company easily access the business potential in China and other developed countries. 

7. Liberal immigration policy

Hong Kong operates a liberal immigration policy. Citizens of approximately 170 countries and territories are allowed visa-free visits to Hong Kong for periods ranging from 7 to 180 days. Individuals wishing to visit Hong Kong for short periods to conduct business negotiations and sign contracts may do so on a visitor visa or entry permit.

The Hong Kong Government has introduced appropriate work visa regulations to meet the needs of entrepreneurs and individuals who want to relocate to Hong Kong to run their businesses or hire foreign experts to work for their companies.

Currently, there are various policies and programs for hiring and employing foreign experts, hiring mainland talent and experts, or for individuals who want to enter Hong Kong for investment. Dependent visas are issued and allow the holder to perform almost any type of legal work in Hong Kong.

8. Efficient and productive workforce

Hong Kong has a highly skilled, well-educated and well-educated workforce. This workforce is made up of talented local individuals and experienced, dynamic professionals who are particularly well-versed in the business cultures of the rapidly developing mainland cities. Employees are generally regarded as hard-working, competitive and constantly seeking to improve themselves.

Although English is the language of business communication, a large portion of the workforce here still communicates in Cantonese and Mandarin, due to the country's links with China.

9. Infrastructure

Hong Kong is constantly upgrading its infrastructure to meet the growing needs of businesses. Hong Kong is considered to have one of the best airports and busiest ports in the world. Transport services in Hong Kong are considered to be more efficient and cheaper, connecting to all major centres.

Hong Kong is also a preferred Convention and Exhibition Centre for most businesses in the region. The Hong Kong Convention and Exhibition Centre has received numerous recognitions and awards for being the “Best Convention and Exhibition Centre in the Asia Pacific Region.

Hong Kong is home to world-class industrial/business parks such as Cyberport and Hong Kong Science and Technology Parks. These areas provide integrated infrastructure and can help businesses reduce costs, while also allowing companies to operate in a friendly, conducive environment.

Hong Kong's telecommunications infrastructure is among the most advanced in the world. Broadband coverage is available to all office buildings and residential properties. Hong Kong's open market ensures that telephone and Internet service providers compete with each other. Broadband Internet access is available to over 98% of Hong Kong households.

Highlights

• Hong Kong is one of the countries with a favorable geographical location, suitable for companies doing business with China and a preferential tax system, is the first choice of many foreign business investors. Find out the following information to help you have a comprehensive view of establishing a company in Hong Kong:
  
  • Hong Kong company business type.
  • Preferential tax system in Hong Kong.
  • Hong Kong company establishment process from AZ.
  • Open a bank account for a Hong Kong company.
• Contact GLA to receive direct advice from our experienced staff!