In 2019, Hong Kong was ranked third on the ease of doing business report by the World Bank. For about 20 years, Hong Kong has stood out as a business paradise, with most enterprises that come here rapidly expanding into multinationals. Being a liberal economy, the jurisdiction sets the ground even so that every enterprise can enter and grow based on the products on offer, brand, and marketing strategy. So, are you ready to form a company in Hong Kong?
We know it is a big decision, but to offer some help, here are the main advantages to anticipate for incorporating a company in Hong Kong.
Hong Kong is an International Junction
If you have a business or simply comparing the types of preferred markets, what would you consider an ideal jurisdiction? This should be a location that not only opens its local market but also allows you to access the neighbors.
When you incorporate a company in Hong Kong, it allows you to access the entire Far East easily. For example, you can easily access China’s mammoth market through the Economic Partnership Arrangement (CEPA) between the two jurisdictions.
Other countries, from the Philippines to Singapore, will be easy to access courtesy of the Free Trade Agreement (FTA) and the Investment Agreement (IA). Hong Kong has also signed other agreements with the US and Canada, among other states. So, it is up to you to grab these opportunities.
Low and Simplified Tax System
Hong Kong, unlike most jurisdictions on the globe, has a very straightforward tax system. You will also like its financial management system. Indeed, taxes are of great concern for many investors because the higher they are, the lower the profit from a business. So, here is a demonstration of how the Hong Kong tax system works.
Hong Kong uses a two-tiered profit tax system. Under this model, which is designed to encourage more businesses to come to Hong Kong, the tax for the first HKD2 million of assessable profits is set at 8.25%. Then, additional profits are charged at the normal rate of 16.5%.
When it comes to personal income tax, the tax rate starts at 2% and goes up to 17% for persons earning more than HKD 132,000. Another awesome thing about Hong Kong is that there is no withholding tax on interests, dividends, or capital gains tax. What these rates mean is that you are able to pocket the bulk of the profits and use them as you wish, whether for business expansion or personal ways.
Outstanding Property Rights Protection
Designing unique products is expensive, lengthy, and often requires a lot of commitment. Therefore, your intellectual property rights have to be protected well to ensure you benefit from them.
To make this possible, the Hong Kong administration opened the Intellectual Property Department that deals with copyrights, patents, and trademarks in the jurisdiction. Therefore, you can now form a business in Hong Kong and expect to use your patents to win a competitive edge in the local and regional market.
Use an Agency to Form Your Company in Hong Kong
Now that you know the main benefits to anticipate from expanding your business in Hong Kong, the first step is getting it registered. Although Hong Kong has tried to simplify the process of company formation, it is still lengthy, and the best idea is to work with an agency of experts.
These are professionals with wide knowledge about Hong Kong and company policies and are willing to hold your hands. They can also come in handy to help you cut down the cost of company formation in Hong Kong.
Once you contact the selected agency, the experts will prepare all the required documents and file them with the registry for you. They can also serve as your company secretary and address to help cut down the cost of operations. With these experts, you can get the company registered without flying to Hong Kong.
The benefits we have listed in this post are only a few of what to anticipate. Others include word-class infrastructure and an educated workforce. You can never go wrong with Hong Kong, especially when working with experts for company formation.
