In Hong Kong, simple and low tax regime and easy HK company formation and legal structure are two important benefits that you will get when incorporating a company.
Easy tax return system
Profit tax return Hong Kong has the low and easy tax regime, with no VAT or GST. The profits tax rate (or Company Income Tax rate) is just 16.5% that is the lowest compared to any country in the whole world. Profit tax return Hong Kong is charged on the source basis than the worldwide basis.
Effortless company incorporation
The Hong Kong Company doesn’t need its directors or shareholders to be the citizens of Hong Kong. The foreigners can also be the corporation’s directors or shareholders. Setup fee and yearly maintenance costs are very low.
Best legal system
Hong Kong has common legal system that is the best system for enforcing and protecting the legal rights and duties coming under commercial transactions or contracts. They follow internationally recognized practices in business commerce.
International finance hub
Hong Kong is known to be the international financial hub. There’re no barriers for access to financial market by the foreign companies and no boundaries on capital inflows/outflows in Hong Kong. They do not have any exchange controls.
Flat Company Tax Rate
In Hong Kong, they have flat corporate tax of 16.5% on the assessable profits. The concessionary tax rate of 50 per cent of its normal profits tax is applied to interest income and trading profits received and derived from debt instruments issued, and to the offshore business of reinsurance corporations.
Territorial Corporate Tax
For HK company formation, one needs to know that Hong Kong follows territorial taxation system. In this, tax is levied just on the profits coming in and derived from carrying the trade, profession or business in HK.