The Benefits and Drawbacks of Doing Business in Hong Kong

Amazing sights in Hong Kong draw not just sightseers but also international businesspeople. The likes of London, New York, and Singapore have pushed this city to the forefront of the worldwide financial sector, but it has now been surpassed as the fourth most important financial hub in the world. Who are the winners in terms of advantages for company owners in Hong Kong?


Pros of Setting Up your Business in Hong Kong

1. Hong Kong’s business registration procedure is quick and painless.

Starting a Hong Kong firm, including preparing seals and documentation, takes a few days. It’s easy to set up a business in Hong Kong from anywhere. Hong Kong government personnel use the Internet better than we do.

Business in Hong Kong


A company may be formed with a copy of an individual’s foreign passport, proof of their living address, and information on the business’s name, structure, etc. Yes, there are enough documents.

In Hong Kong, any shareholder director may find a company. Authorized capital starts at 10,000 HKD, while the minimum payment to establish a firm in Hong Kong is 1 share or 1 HKD. Few activities need licenses.

2. Tax policies that are conducive to business

Hong Kong has a straightforward tax structure. Consider low tax rates and territorial taxation. Income taxes are 16.5 percent, while property taxes are 15 percent. The state also grants tax rebates and exemptions. Large and small enterprises get subsidies, and the 2016-2017 income tax rate is 75% for earnings up to HK$20,000. No dividend, royalties, capital gains, interest, value-added, etc. taxes.

Hong Kong’s territorial taxation helps cross-border commerce. It exempts Hong Kong firms from taxing their international revenues. 

3. Hong Kong is a corporate hub with a low-risk open economy.

According to the international center “Heritage Fund,” Hong Kong is one of the few sophisticated centers with an open economy and a competitive spirit. Variables like

  • diffusion of knowledge and money; 
  • freedom of expression; 
  • access to markets and services; 
  • labor force modernization.

Hong Kong is a welcome place for foreign entrepreneurs since the government actively recruits and supports them.

Hong Kong is one of the world’s most honest financial centers. This is despite the fact that most Hong Kongers are Chinese, who appear incapable of resisting bribes. Hong Kong won.

This financial center has an excellent European-style legal system that operates independently of Chinese courts. Even the most intricate Hong Kong arbitration cases are fair and reasonable since it was a British colony, and the UK prioritized business interests.

4. The place is ideal because of its proximity to China and other places.

Hong Kong benefits from being the economic heart of the Pacific-Asian region and within four hours of all Asian financial markets. China’s Pearl River Delta, which generates 12% of GDP and 35% of exports, can be accessed by train in under an hour. Its 70 million residents make it a huge consumer market.

Hong Kong has been called the “Gateway to the Middle Kingdom” for approximately 170 years due to its key position at the crossroads of commodities flows from Asia to the Americas and Europe, and vice versa. It has political, historical, and geographic ties to China. It’s important to understand Chinese business practices even in Hong Kong. This minimizes business relationship risks.

Hong Kong enterprises benefit from special accords with China. You may sell the goods duty-free in China with a certificate of local manufacturing. Hong Kong enterprises may now pass customs and health inspections more easily.

Hong Kong’s international airport and seaports make it simple to export items worldwide, and the city’s industrial facilities and Chinese market access are unmatched. Corporate headquarters in Hong Kong are highly regarded, especially by Chinese business partners. Eighty percent of the world’s major companies are in Hong Kong.

Overall, Hong Kong’s commercial benefits still exceed its negatives. Don’t spend time and money paying taxes and more when doing business in your normal jurisdiction. Contact Fintech Harbor Consulting to learn about Hong Kong business and the possibilities of second citizenship by investment.