Hong Kong is a highly developed city with one of the world’s most thriving economies. The hustling and bustling city effortlessly weaves Western and Asian influence into a global hub for business, foreign investment, culture and international trade. It may be geographically small and known as one of the most expensive and densely populated cities in the world but the business opportunities here are limitless.
Thinking about taking your business to Asia? Hong Kong might just be the perfect location. It is an ideal country for foreigners to start a business with multiple other benefits such as having a tax-friendly environment, a productive legal system, open market for competition and more.
1. Tax-friendly environment
According to the World Bank’s Doing Business Report, Hong Kong is ranked third globally on the ease of doing business. Hong Kong has a simple and low-rate tax system, which makes it really attractive for entrepreneurs and business owners. In Hong Kong, there are only three direct taxes: salaries tax, profit tax and property tax.
It also has one of the most business-friendly tax systems in the world. Hong Kong adopts a territorial system of taxation. Under a territorial tax system, profit tax is only charged on profits which arise in or are derived from Hong Kong. This means that an individual who carries on a business in Hong Kong but obtains profits from another location is not required to pay tax in Hong Kong on those profits. If your company is incorporated in Hong Kong but profits or income are generated outside of Hong Kong, then it will not be taxable.
In order to promote economic development and support SMEs, Hong Kong’s government introduced a two-tiered profit tax system to reduce the tax burden on enterprises and startups (FastLane, 2022).
2. Productive legal system
Hong Kong is a free and open market that encourages competition. The country operates under the common law system. There are no capital flow restrictions and no local protection regulations e.g quotations or tariffs. There is a productive legal system with minimal legal procedures to register a company or set up a business. In Hong Kong, the law protects Intellectual Property Rights and Limited liability companies from lawsuits filed on the Mainland.
3. Straightforward Rules and Regulations
Filling out forms, spending your time researching the different rules and then finding out you still don’t have the correct information to set your business is extremely frustrating and time-consuming. Nevertheless, setting up a company in Hong Kong is simple and straightforward. Foreigners are not only permitted to hold 100% ownership and be the only director and stockholders of their business but there is also no need for a physical address to operate.
Thought, the rules and regulations in Hong Kong aren’t complicated, it may take you weeks to process the documents as well as the requirements if you are new to Hong Kong or unfamiliar with the requirements. However, if you enroll in services from a professional firm, the process can be done within 2-3 days with the guidance of the professionals. So as business owners, you can spend less time tangled in admin work and more time growing your business.
4. Business-friendly immigration and a diverse International Community
As a cosmopolitan city, Hong Kong is diverse and multicultural. There is a large international community with foreign residents taking up to approximately 10% of the total population. Most people in Hong Kong are able to speak English, Cantonese and Mandarin, which makes day to day communication so much simpler.
Moreover, there are business-friendly and favourable immigration policies. Visitors, entrepreneurs and investors from 170 countries can enter and visit Hong Kong without a visa. Work visas can also be easily obtained so entrepreneurs can conduct business activities and attend important conferences in Hong Kong.
Need help obtaining a work visa in Hong Kong? FastLane provides world-class services for businesses looking to expand and operate in Hong Kong. They offer a diverse range of professional services, including work-visa and global recruitment to enable successful business operations within the SME market in Hong Kong.
As experts, FastLane is able to provide a wide range of corporate and HR Professional Employer Organisation (PEO) services for businesses. The services include support on local compliances on employment law and tax obligations, HR and admin tasks and global recruitment. Business owners and managers can save time by taking advantage of FastLane’s professional experience in processing employment visa applications in Hong Kong and global recruitment. Focus your valuable time on growing the business and increasing profits.
5. Strategic Location
Hong Kong is often considered the heart of Asia. Beyond Hong Kong’s extensive tax and legal benefits, it is in close proximity to other robust and prominent markets such as Tokyo, Seoul, Bangkok, Shanghai and Taipei. Being closely located to Mainland China is a huge advantage for businesses as Mainland China is undoubtedly one of the biggest economies in the world. This makes Hong Kong a convenient location to conduct business activity.
Moreover, it is well connected with the rest of the world with world-class infrastructures and one of the best airports in the world. Hong Kong International Airport makes business travel in and out of the country simple and enjoyable. With visa-free travel for visitors from 170 countries, open trade policies and pro-business organisations offering support and advice for SMEs, doing business in Hong Kong is an effortless and prosperous experience.
Convinced in wanting to establish a business in Hong Kong? You will need a multi-currency global bank account to expand and conduct business abroad. A TranSwap’s global account allows you to operate in Hong Kong like a local by receiving payments using the local settlement network.
- A hassle-free and low cost alternative to securing local bank accounts in each country of operation.
- Pay to over 180 countries.
- Hold up to 34 currencies.
- Smoothly manage cash flow and bolster your competitive advantage in the local markets by paying and receiving money in the local currency.
- Instantly make international payments with no hidden costs and no need to maintain a minimum account balance. Use real-time exchange rates with no unwelcome surprises.
- Enjoy quick, secure and fast international transfers by accessing our global network of bank partners.
- Everything can be handled online. There is no need to visit a physical branch and no paperwork or phone calls.
Speeds up transactions progress worldwide so as business owners and entrepreneurs you can spend more time expanding your business. Ready to establish your business in Hong Kong? Contact us today.