As an international metropolis rich in information and opportunity, starting a business in Hong Kong provides unrivaled access to an estimated consumer market of 450 million people in southern China alone. With a strong infrastructure and a comprehensive legal system of its own, it provides an advantageous financial and business environment for many entrepreneurs and traders. Therefore, Hong Kong is a popular jurisdiction among international businessmen seeking to penetrate Chinese markets, and more and more people are establishing their own companies in Hong Kong for different purposes, which enhance not only the image of the company itself, but also competitive ability in the international market. The following information will help you determine whether starting a business in Hong Kong is the optimal strategy for doing so.
We know that there are many reasons or factors that can contribute to the success of business. While Hong Kong is considered one of the best cities to set up and run a business, it scores highly on factors that are important to businesses. Below are some of the key benefits of establishing a business in Hong Kong and will serve to provide you with the answers as to whether forming a company in Hong Kong is the optimal strategy.
1. To be an international information exchange center and transportation hub. A focal point of all maritime activities in South China and is one of the world’s leading ports in terms of shipping tonnage using its facilities, cargo handled, and number of passengers carried.
2. The world’s most dynamic economies driven by the principles of free enterprise, free trade and free markets open to all. No restrictions on incoming and outgoing investment, no currency exchange controls, and no foreign ownership restrictions
3. Strategically located very close to China. Modern and efficient air, rail, road and sea links offer unrivaled access to China’s prosperous southern provinces for many foreign businessmen.
4. With a very low tax rate (about 16.5% on net profit), tax-free for income not generated in Hong Kong (offshore income)
5. With a robust infrastructure, stable social and political environment, most companies choose to establish their operations in Hong Kong because it is believed to be politically stable with business-friendly governance and free market principles.
6. Enjoy the convenience of the international banking system. Various banks represent the interests of 32 foreign countries. Hong Kong’s banking and financial services are regulated by the Hong Kong Monetary Authority (HKMA). The features and benefits of using Hong Kong for private banking, bank accounts, corporations, and offshore asset protection are vast.
The process of forming a company in Hong Kong is relatively simple. The main requirements are:
1. Require at least one company director/shareholder and one Hong Kong resident company secretary (over 18 years of age).
2. Confirm the company name and corporate structure
3. A minimum issued capital requirement of HKD 10,000. The paid-up capital requirement is only the sum of one dollar.
4. Scope of business. There are almost no restrictions in the field of business scope when you set up a company in Hong Kong.
5. Operational requirements, such as opening a corporate bank account in Hong Kong, setting up an office (virtual office is an option), etc.