Hong Kong is one of the world’s most significant financial centers and the fifth most competitive global market. It’s a fast-growing market with opportunities across many industries such as trading, finance, manufacturing, etc.
Some of the top companies which are set up in Hong Kong are Deloitte, HSBC, KPMG, Accenture, IBM, Citi, and J.P. Morgan. As an entrepreneur you can join the market by setting up a company in Hong Kong. Because it is developed, and an ideal location that supports economic growth and creates business-friendly policies. Below are the other benefits that entrepreneurs get to form a company in Hong Kong.
Good Hong Kong Co-working Spaces
Hong Kong is expensive - even for a small business also. But what happened if you have access to a co-working space. In Hong Kong, there are multiple workspaces which you can choose as per your needs. Some famous co-work spaces are as follows:
Hong Kong is the largest commercial centre and also a heart of Asia. As stated above it is well-developed and inter-connected with other countries. In the report of the busiest airports in 2022, Hong Kong remains on the list. The transportation network is efficient only by planes but also by railways, ferries, minibuses, etc. The business will not face any problems in the business operations.
Low Tax Rates
Hong Kong is a tax haven for many investors because of many reasons. And one of the key benefits is that it provides a low tax regime. Particularly, Hong Kong imposes only three taxes - corporate income tax, personal income tax, and property tax.
For corporate profits, there are two-tiered tax rates
In the whole of Asia, you find business-friendly tax rates in Hong Kong. While some other countries charge corporate tax rates between 17% to 30%. Also, companies established in India can take tax exemption from the Inland Revenue Department (IRD) for their grants from the outwards of the country. This validation is granted under a letter form with up to 5 years and it is called an Offshore claim.
The fundamental three types of tax in Hong Kong are as follows:
The following taxes are not applicable in Hong Kong:
Free Economy and Trade
All types of business can be set up in Hong Kong but business should be legal such as trading, E-commerce, manufacturing, consulting, and finance. Businesses can open a bank account anywhere in Hong Kong without any restriction from the Hong Kong Government.
Also, you don’t have to pay any chargeable tax for goods imported to Hong Kong excluding some products such as motor vehicles, liquor, tobacco, hydrocarbon oil and methyl alcohol.
For the export and import of some goods in Hong Kong, you need to apply for a license, and the licensing process is not that complex. Money transfer and exchange is admissible for every type. The report of the World Bank in 2020 states that Hong Kong is the third easiest country to set up a business.
Variety in Language
People can choose English as a second official language after Chinese. Also, immigrants from other countries bring variety in language such as French, Japanese, Russian, German, etc.
The manpower in Hong Kong is trained, disciplined, computer literate and highly skilled. People can easily understand the business requirements because English is one of the official languages in Hong Kong. As the workforce is trained in all aspects of international business matters, there is no shortage of professionals in the country.
Quality of Life
As per the survey by Global Consulting Firm, Hong Kong is the most expensive city for ex-pats. But entrepreneurs came here because of its fascinating life quality and benefits.
The transportation is cheap and reliable with efficient banking, public and entertainment services. Other than this, the diversity of foods and consumer goods gives different options to live.
Easy Access to Mainland China
For your business, if you want to tap into the Mainland Chinese Market, then you must know that Hong Kong is situated on the southeast coast of mainland China. This allows you to travel to various Chinese cities within one day such as Beijing, Shanghai and other major cities.
Liberal Immigration Policy
Hong Kong allowed nationals from 170 countries and territories for visa-free visits for a period of 7 days to 180 days. Visitors can visit for short-term to sign contracts or negotiate business on a visitor visa or entry permit.
Also, the government has introduced work visas for entrepreneurs who want to relocate to Hong Kong to run their businesses and want to hire foreign professionals to work in their companies.
The laws and legal system of Hong Kong are transparent and different from those in Mainland China. Arbitration was established in Hong Kong in 1985 and it is a popular method to dissolve business disputes. Also, laws protect Intellectual Property Rights (IPR), patents, copyrights, trademarks, etc.
Most businesses set up their operations in Hong Kong because it is politically stable with proper governance and free market principles. Also, it is one of the most corruption-free economies in the world. The anti-corruption watchdog has set up called Independent Commission Against Corruption (ICAC). It mandates the deal with both public and private sector corruption.
To summarise, Hong Kong become famous for its uncomplicated incorporation, reasonable tax rates, open market, and developing environment. Also, setting up a company in Hong Kong gives excellent infrastructure and a productive workforce. So, all these benefits are important because it attracts entrepreneurs and investors across the globe to set up a company in Hong Kong. You can choose Hong Kong as it opens the door for you to Mainland China Market.