Tax Basics
Businesses and individuals in Hong Kong enjoy one of the most tax-friendly systems in the world. Only three direct taxes are imposed and there are generous allowances and deductions which can reduce your taxable amount.
The three taxes are:
- Profits tax for the first HK$2 million of profits of corporations is 8.25 percent. Profits above that amount will be subject to the tax rate of 16.5 percent. For unincorporated business (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5 percent and 15 percent.
- Salaries tax which has a maximum limit of 17 percent
- Property tax of 15 percent
Here are the taxes which Hong Kong does not impose:
- No sales tax or VAT
- No withholding tax
- No capital gains tax
- No tax on dividends
- No estate tax
Free Trade Port
Another benefit of setting up business in Hong Kong is its free trade policy. The city’s free port status and easy customs procedures make it easier for businesses and companies to operate.
Employment Policy
There are minimum entitlements in place for Hong Kong employees. More information on entitlements such as statutory holidays, Mandatory Provident Fund payments, sick and maternity leave and severance and long-service payments can be found at the Employment Ordinance.
Employers are also obliged to take out the employee’s compensation insurance policies for their employees under the Employees’ Compensation Ordinance.
Company Bank Accounts
Before setting up a company bank account, be sure to register and incorporate your business as those documents will be required to support your bank account application. You will be advised by your bank on what other documents are needed.
When opening an account, keep in mind that Hong Kong banks usually require a minimum deposit. Your bank may also request the identity and residence information of all the company’s beneficial owners due to Hong Kong’s anti-money laundering guidelines.
More information about opening and maintaining an account from the Hong Kong Monetary Authority can be found here.
Business Locations
Hong Kong has a wide variety of premises to suit all sizes and types of businesses. We can help you identify a prime business location or an appropriate rental model and connect you with relevant networks and service providers.