Hong Kong - A country that does not collect 5% VAT to run Facebook and Google ads

For businesses running Facebook and Google ads, paying VAT correctly according to regulations is a matter of concern for many businesses.

Value added tax (VAT) rates for Facebook and Google advertising activities in many countries range from 5% or more depending on the advertising position on Facebook (Meta).

Taking advantage of tax incentives in countries with low tax policies for Facebook and Google advertising is the choice of many businesses.

Establishing a company in Hong Kong is one of the choices of many Facebook and Google advertising businesses because of attractive tax incentives and benefits to help develop foreign businesses here.

1. What are Facebook and Google's advertising tax policies in different countries?

The advertising tax collection policy of Facebook, Google and other advertising platforms around the world depends on:

• Regulations of each country in which the business is established and operates.
• Which country location will the ad deliver to?

For example: When a business establishes a company in Hong Kong, when paying advertising fees to Google, Facebook will not pay value added tax (VAT) because Hong Kong applies a VAT policy of 0%.

However, if a business establishes a company in Singapore, when the Singapore company pays advertising fees to Google, Facebook will have to pay GST for Facebook advertising activities of 17% or more.

To refer to all types of VAT in countries around the world, businesses visit Exclusive VAT comparison tool to make investment decisions for the Business. 

2. Why does opening a Hong Kong company not charge 5% VAT to run Facebook and Google ads?

Currently, with the policies of Facebook and Google, depending on the country in which the Individual/Business runs ads, Facebook and Google will have different VAT or GST collection policies.

Currently, Hong Kong does not apply value added tax (VAT). In other words, Hong Kong's VAT is 0%.

Therefore, based on the list of countries that collect VAT for Facebook and Google advertising activities, Hong Kong is one of the countries where businesses operating Facebook advertising here do not need to pay VAT. For this reason, it has attracted many Individuals/Businesses to establish companies in Hong Kong to enjoy this incentive.

In addition to Hong Kong with a 0% tax incentive policy, there are a number of countries such as Singapore, America, etc. that have attractive incentives on: brands, good policies for foreign businesses, etc.

To choose the country that best suits the needs and business model of the enterprise, GLA will advise and support the enterprise to choose the most suitable country.

3. Attractive benefits for businesses running Facebook and Google ads when opening a company in Hong Kong

Hong Kong - a country that attracts the focus of many foreign businesses because of the attractive benefits of this country. These include:

• VAT is 0% and therefore when a Hong Kong company pays for Facebook advertising, Google will not incur VAT. 
• No corporate income tax is payable on profits earned outside Hong Kong.
• Diverse options to open payment methods: open traditional bank accounts, open online bank accounts, open international payment gateways: PayPal, Stripe, etc.
• Strategic location, connecting countries in the Asia-Pacific region.
• Business is easy and convenient.
• The freest economy in the world.
• Support and assist businesses in establishing companies in Hong Kong.
• Transparent legal environment.

4. Hong Kong company establishment process for businesses running Facebook and Google ads

5. Open a bank account for a company established in Hong Kong to run Facebook and Google ads

Businesses establishing a company in Hong Kong running Facebook and Google ads can choose from many ways to open a bank account: 

• Open a bank account online in Hong Kong. 
• Open a bank account online in financial center countries such as: Singapore, Mỹ, etc.
• Open a traditional bank account in Hong Kong or countries like: Singapore, USA, etc.

Opening a traditional bank account in Hong Kong or countries like Singapore, the US, etc. is currently quite difficult and complicated due to strict requirements from traditional banks and a complex and costly account opening process. Approval time and success rate are lower than opening a digital bank account card.

Digital bank accounts in financial centers such as Singapore, USA, etc. are attracting many Individuals/Businesses to choose because the account opening process is simple, easy, fast, and can be done online. , the cost of opening a card is low and the ability to successfully open a digital bank account is higher than that of traditional banks.

To choose and determine the appropriate bank account for a Business opening a Hong Kong company running Facebook and Google ads, the Business should contact GLA to have a team of banking and finance experts analyze and advise on the type of bank account suitable for the Business.

6. Frequently asked questions when businesses open a company in Hong Kong to run Facebook and Google ads?

Highlights

• Setting up a Hong Kong company to run Facebook Ads, Google Ads will not apply VAT, enjoy tax incentives in Hong Kong.
• Hong Kong company formation requires registration with the Hong Kong Company Registry.
• Hong Kong companies are required to renew their Hong Kong company incorporation certificate annually.