Advantages to incorporate in Hong Kong
Why Hong Kong
According to the 2014 Paying Taxes* study of 189 economies, Hong Kong has one of the most tax-friendly economies in the world. Why? The city only imposes three direct taxes and has generous allowances and deductions which reduce your taxable amount.
- Profits tax is capped at 16.5 percent
- Salaries tax is a maximum of 15 percent
- Property tax is 15 percent
More important are the taxes exemptions in Hong Kong:
- No sales tax or VAT
- No withholding tax
- No capital gains tax
- No tax on dividends
- No estate tax
The ease of submitting tax returns is another attractive part of Hong Kong’s business environment. Many people complete their tax returns themselves – a simple process – and can submit them online. Others rely on Hong Kong’s many accountancy firms, large and small, for cost-effective tax services and advice.
Advantages of incorporation in Hong Kong
Moreover, Hong Kong is also known for its free port status and easy customs procedures. Duty is paid on very few products, for example, tobacco. One major recent change has been to make the import of wine and beer duty free. This has encouraged a thriving wine import, export and storage business serving retail and individual buyers.
There is no ‘offshore’ legislation in Hong Kong, all companies are incorporated under the same legislation regardless of whether they do business on or offshore. However companies that do not derive any income from sources in Hong Kong are not subject to tax thereby effectively making it an offshore company in all but name. An excellent infrastructure and strong regulatory frame work are contributors to the success of Hong Kong as a major destination for business.
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