Company registration in Hong Kong: An Attractive Business Hub – 8 Key Benefits
Hong Kong has been ranked as the fourth-easiest country to do business by the World Bank in 2019. Its strategic location and numerous advantages make it an attractive destination for entrepreneurs looking to set up a company. Here, we highlight eight key benefits of establishing a business in Hong Kong, brought to you by Tetra Consultants.
- An International Junction: Situated at the heart of Asia, Hong Kong provides access to some of the world’s largest and robust economies. It serves as a gateway to the Chinese market and offers convenient connections to Asia and beyond, making it an ideal connecting point between the West and East for business ventures;
- Free Trade Policy: Hong Kong benefits from the Closer Economic Partnership Arrangement (CEPA), a bilateral free trade agreement with mainland China. This agreement allows Hong Kong-made goods exported to China to enjoy zero tariffs. CEPA also streamlines access for Hong Kong-based service suppliers, facilitating trade and investment between Hong Kong and mainland China;
- Low and Simple Tax: Hong Kong boasts a straightforward and low tax system, which is a significant advantage for businesses. With a corporate tax rate of 15% and no withholding tax on dividends and interest, it provides a tax-friendly environment. Additionally, there is no value-added tax (VAT) or goods and services tax (GST), further enhancing the appeal for entrepreneurs and investors;
- Limited Liability Company (LLC) Setup: The option of establishing a Limited Liability Company (LLC) is the most popular incorporation choice in Hong Kong. Operating as an LLC protects directors and shareholders from unlimited liability, as they are only liable for their invested capital. Incorporation can be done in English or Chinese, making the registration process easily accessible;
- Availability of Productive Workforce: Hong Kong’s workforce is highly trained, flexible, and energetic. With English as their second official language, language barriers are minimized, making it easier for businesses to operate in the region.
- Intellectual Property Protection: Hong Kong has stringent regulations to safeguard intellectual property rights. Registered designs, patents, copyrights, and Intellectual Property Rights (IPR) are well-protected by the reputable Intellectual Property Department of Hong Kong;
- Relatively Hassle-Free Setup: Compared to mainland China, setting up a company in Hong Kong is relatively simple and fast. Hong Kong’s legal system operates separately from mainland China, based on English common law, offering an open economy and free trade. The bureaucratic process and intellectual property registration are straightforward and consistent;
- No Requirement for a Local Director or Shareholder: Unlike some Southeast Asian countries, such as Singapore, Hong Kong does not require companies to have a local director or shareholder. This reduces costs and simplifies management decisions, making it an attractive option for foreign investors.
In conclusion, the benefits of setting up a company in Hong Kong, including low taxes, straightforward incorporation, a productive workforce, and more, make it a top choice for entrepreneurs. For a smooth and hassle-free registration process, Tetra Consultants offers comprehensive services, including business entity selection, registration, license acquisition, corporate bank account opening, and ensuring compliance with government regulations.
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