Hong Kong Companies

Hong Kong is one of the most dynamic regions in the world and it is the world’s eighth largest trading economy calculated in terms of total value of trade undertaken. It is also the world’s seventh largest importer and the world’s ninth largest exporter and the vast majority of the 50,000 Hong Kong companies incorporated annually are local trading companies doing real business in the region. Therefore, one of the major advantages of choosing a Hong Kong company is that there is no immediate suggestion that the company is a tax avoidance vehicle. The tax rate in Hong Kong is 17.5% on source income. In practice, if a Hong Kong company dose not carry out business in Hong Kong there is no tax to be levied. To be more exact, Hong Kong profits tax is ONLY charged on profits derived from a trade, profession or business carried on in Hong Kong.

Consequently, this means that a company which carries on a business outside of Hong Kong, say in Europe, USA, or even in mainland China, is not required to pay tax in Hong Kong on those profits. There is no tax on capital gains, dividends and interest earned in Hong Kong. There are also no exchange or capital controls in Hong Kong, therefore, funds can be deposited and transferred easily. 
 
Hong Kong companies are required to file audited accounts and must also prepare and file an annual return which gives details of the current director(s) and of the shareholder(s) who have held shares in the company. However, the accounts can be conducted either in Hong Kong or outside of Hong Kong and the accounts can be kept where the director(s) think fit.