After being occupied by the uk in 1841, hong kong remained a british protectorate until it was officially ceded back to the peoples. Pkf hong kong setting up a business in hong kong what is the best form of investment in hong kong. The basic law prescribes the systems to be practiced in the hksar. Broadly, speaking, noncapital profits arising from a business conducted in hong kong which are sourced in hong kong should be subject to hong kong profits tax.
Figure starting a business in hong kong sar, china and comparator. A world in transition this report reflects the survey results gathered across the seven asean economies which are part of the apec economic forum. View the article pdf and any associated supplements and figures for a period of 48 hours. Hong kong adopts a territorial concept of taxation.
Singapore is widely acknowledged as being one of the best places to do business in the world, having won numerous accolades including. Why do hong kong, singapore, and shanghai boast so many head offices of foreign companies in the asia. As an international financial centre and business hub in the asia pacific region with wellestablished infrastructure, robust legal and financial system as well as simple tax system, hong kong is the preferred location for business establishment. Advantages of setting up a business in hong kong many investors are electing to set up their businesses overseas, with one of the most popular jurisdictions being hong kong. Royalties royalty payments made to a nonresident are deemed to be taxable in hong kong if made for the use. It underscores hong kong s strategic importance for doing business in china, explains the taxation systems, and also takes you through the process of setting up a company in hong kong and in the mainland. Creative design of the guide was provided by jessica huang, kking lu and belen rodriguez. Guide to doing business in hong kong addleshaw goddard. Solid infrastructure facility protects businesses to develop efficient business operation the infrastructure facilities in hong kong are what make the city so wellknown worldwide to business owners. Doing business in hong kong and macau guide british chamber. Lehmanbrown business guides doing business in hong kong. What is the legal system civil law, common law or a mixture of both. Hong kong is also a member of the asiapacific economic cooperation apec forum which aims to achieve sustained growth and development in. Hong kong is vested with executive, legislative and independent judicial powers including that of final jurisdiction.
To be incorporated in hong kong, a new company must obtain a certificate. Here, we present some things you should know about hong kong and the chinese before you go. Doing business in hong kong is an attractive proposition for many reasons. Business executives in hong kong have fast and easy access to. The doing business in hong kong and macau guide website is now live and the hardcopy brochures are currently being distributed. Under the territorial basis of taxation, foreign sourced income is not subject to hong kong. Hong kong is a fascinating blend of hightech modernism and ancient beliefs. Tourists from hong kong remain numerous, representing about 20% of arrivals. Her free market in foreign exchange, gold, securities and futures continue. Many foreign investors choose hong kong as their steppingstone for entering the prc because she possesses the freest economy in the world and the talents who have good understanding of both chinese and western cultures. Hong kong s air and sea transport facilities provide world class service for all customers. The most appropriate business structure would depend on the particular. Foreign companies can also setup in hong kong as a branch office or a representative office.
It is one of the freest economies in the world and a gateway to investment in china. The appeal of doing business in hong kong, singapore, and shanghai. For this reason, hong kong has long held a reputation as a popular gateway to invest in china. Hong kong retains her status as an international financial centre. Doing business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 190 economiesfrom afghanistan to zimbabweand over time. Doing business in singapore geography singapore is situated at the tip of the malayan peninsula, at the southeastern end of the straits of malacca. Doing business in hong kong at the southeastern tip of china, hong kong and its islands returned to the sovereign rule of china from the united kingdom in 1997. Taxable income corporations, partnerships, trustees and bodies of persons carrying on a trade, profession or business in hong kong are subject to tax on hong kong. Interest there is no withholding tax on interest payments from a hong kong entity. This guide to doing business in hong kong will provide foreign investors with an insight into the key aspects of investing and undertaking business in hong kong special administrative region hksar. Hong kong has a prime location at the geographical and economic centre of asia. Key factors for doing business in china contributed by deloitte.
Figure starting a business in hong kong sar, china procedure, time and cost this symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. It features topics such as setting up business entities in hong kong, import issues, tax and financial systems, financial reporting and. Since 200304, 178 economies have implemented 722 reforms captured by the starting a business indicator set, either reducing or eliminating barriers to entry. Five days before the arrival in manila, the spanish authorities filed a case against rizal and his followers. Economic environment singapore has one of the most. Western companies in hong kong activate contingency plans as. Pkf doing business in hong kong 4 the basic law further provides, inter alia, that. Hong kong is an attractive place to do business and a leading international trading and service hub as well as a high valueadded manufacturing base. Between september to november 2015, the unemployment rate stood at 1. A booming tourism industry which attracts more than 60 million tourists a year, hong kong is an ideal market for establishing a presence in the region. Hong kong enjoys a clean and efficient government system and the rule of law is wellestablished.
Doing business in hong kong summer 20 2 academic component. The corporate tax rate and income tax rate are capped at. A person or corporation that wishes to establish a business. Doing business in hong kong this document describes some of the key commercial and taxation factors that are relevant on setting up a business in hong kong. Under the territorial basis of taxation, foreign sourced income is not subject to hong kong profits tax.
While the peoples republic of china maintains responsibility over foreign affairs and defence, hong kong benefits from a great degree of autonomy in governance, economic affairs and. Doing business in hong kong world business culture. Hong kong operates a territorial basis of taxation. Fee includes tuition and fees for three credit hours, lodging in hong kong, and. It features topics such as setting up business entities in hong kong, import issues, tax and financial systems, financial reporting and audit standards, and labour and employment.
Companies including hong kong companies and non hong kong companies carrying on a trade, profession or business in hong kong are subject to profits tax on profits derived from hong kong. The ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operationstronger protections of property rights. The appeal of doing business in hong kong, singapore, and. The course will cover areas such as the constitutional, administrative, electoral and legal system that exists in hong kong. Kong and around the world, to exchange ideas and do business. Western companies in hong kong activate contingency plans as turmoil spreads banks, others doing business in city say unrest has led to delays of some events, while employees are being allowed to. Business executives in hong kong have fast and easy access to all the major markets in the region. Tai kong cpa limited the firm is a member of urbach hacker young international. Dividends there is no withholding tax on dividend distributions from a hong kong entity. The average growth rate of economy in macau between 2001 and 2005 was approximately 10%. For a foreign corporation establishing a place of business in hong kong, it must register as a non hong kong company with.
The economies with the most notable improvement in doing business 2019 are afghanistan, djibouti, china, azerbaijan, india, togo, kenya, cote divoire, turkey and rwanda. Onethird of all business regulatory reforms recorded by doing business 2019 were in the economies of subsaharan africa. The three most common forms of business presence in hong kong are. Its simple, lowcost tax structure has made hong kong a natural regional hub for multinational companies doing business in asia. The branch will not be subject to limitations on the. Doing business in hong kong hong kong became a special administrative region hksar of the peoples republic of hina pr and the basic law came into effect in 1997.
Santa clara founded a program in hong kong in 1980. This article was prepared by lehmanbrown international accountants. The hong kong stock exchange is the prime fundraising. Some of the reasons behind this trend are finding a way to enter an international market and to benefit from taxfriendly jurisdictions. What you dont know about doing business in hong kong. Creative design of the guide was provided by jessica huang and estela mi. I have included a few items which you might not think of immediately as directly related to doing business here, but if doing business in hong kong also means living here, these are factors you. Doing business 2020 continues to show a steady convergence between developing and developed economies, especially in the area of business incorporation. Foreign investors intending to establish business presence in hong kong can choose to set up a private limited company, partnership, liaison office or branch. Hong kong is also a focal point of all maritime activities in southern china and is one of the major ports of the world in terms of tonnage of shipping using its facilities, cargo handled and the number of passengers carried. The average growth rate of economy in macau between 2001 and 2005 was approximately 10% annually. Brunei darussalam, indonesia, malaysia, the philippines, singapore, thailand and viet nam. Doing business 2020, a world bank group flagship publication, is the 17th in a series of annual studies measuring the regulations that enhance business activity and those that constrain it. The most frequently used form of business entity in hong kong is the private limited company either as a standalone business or as a subsidiary of a foreign company.
It is one of the most open and externally orientated economies in the world. As the nation continues to restructure its economy, u. Pkf doing business in hong kong many foreign investors choose hong kong as their steppingstone for entering the prc because she possesses the freest economy in the world and the talents who have good understanding of both chinese and western cultures. By setting up a company in hong kong, busi nesses can take advantage of. Hong kong, a special administrative region of the peoples republic of china prc since its reversion in 1997, has proven in past economic crises to be exceptionally resilient. Western companies in hong kong activate contingency plans. Hong kong is renowned for being an easy place to set up a business. The branch will not be subject to limitations on the scope of its activities. This article is intended for general information purposes only and is not intended to provide, and should not be used in lieu of professional advice.
Only hong kong source income is subject to profits tax. The primary focus is on the legal system of hong kong with its common law heritage, and doing business with and in the unique structure of. The hong kong government practises an open and liberal investment policy and actively encourages inward investment. Doing business 2019 doing business 2019 is the 16th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. Jan 29, 2019 hong kong is largely autonomous from china, and foreign companies will quickly discover that the rules of doing business in the mainland simply do not apply in hong kong, and vice versa. Hogan lovells offices in beijing, shanghai and hong kong allow us to provide you with strategic advice in your home country with regards to all legal aspects of your business endeavors in china while at the same time executing your strategy through the experienced legal experts in. Advantages of setting up a business in hong kong start it up. Starting a business this topic measures the number of procedures, time, cost and paidin minimum capital requirement for a small to mediumsized limited liability company to start up and formally operate in each economys largest business city. To register under the companies ordinance, the foreign company will need to appoint a local person authorised to accept service of proceedings and notices in hong kong and have a registered place of business. An introduction to doing business in hong kong 2017. Upon his departure in hong kong, the spanish consul general immediately sent a cablegram to spanish governorgeneral despujol. The chief executive appoints members of the executive council, which is a think tank for formulating government policies for the territory.
Hogan lovells offices in beijing, shanghai and hong kong allow us to provide you with strategic advice in your home country with regards to all legal aspects of your business endeavors in china while at the same time executing your strategy through the experienced legal experts in our offices in greater china. Findings from the 2018 annual survey of companies in hong kong with. This years report data cover regulations measured from june 2010 through may 2011. Hong kong company registration guide healy consultants. Rankings on doing business topics hong kong sar, china. The spanish governorgeneral also made sure that rizal had not acquired german citizenship. The 2018 doing business in hong kong guide has been prepared to assist those who are interested in doing business in hong kong. Doing business in a more transparent world assesses regulations affecting domestic firms in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency and trading across borders. Doing business in hong kong introduction a person or corporation that wishes to establish a business presence in hong kong can do so in a number of different ways. Preface bn lawyers is a law firm established with the foresight that law practice should follow macaus. Basis hong kong operates a territorial system of taxation, with tax levied on income arising in or derived from hong kong. However, there is an effective withholding tax for certain royalty payments made to persons not carrying on a business in hong kong sarfor the use in of intellectual property, or for the use of intellectual property outside hong kong sar, and where a deduction for the payment is claimed in hong kong sar. The class offers an understanding of hong kong s unique legal system.
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