Taxation in Hong Kong
Although Hong Kong is not considered to be a Tax Haven, it grants all the advantages a tax-free jurisdiction can give.
The main postulates of Hong Kong tax system are:
- No sales tax
- No withholding tax
- No capital gain tax
- No income tax on profits gained outside Hong Kong
The company in Hong Kong by all means has a much positive image compared to usual tax haven states. It is a jurisdiction of choice for trading with China and any other country in Asia.
Absolutely legal tax-free environment is quite easy to achieve. Here is a brief guide you must take into account if you would like to take advantage of 0% corporate income tax.
The key to a straightforward Hong Kong taxation system is location of the companies Hong Kong enters into agreements with. In other words, income that derives from Hong Kong company trading with outside-of-Hong Kong companies is not taxed.
Corporate income tax rate
For companies generating there income from domestic business, i.e. Hong Kong company trading with other Hong Kong companies, the corporate income tax rate is 16,5%.
Conditions to 0% tax on income
- A Hong Kong company can have a bank account in Hong Kong. And it still will not be subject to income tax.
- The Hong Kong company does not have a physical operating office in Hong Kong. But it is absolutely fine to use a virtual office for receiving mail and telephone messages.
- The Hong Kong company does not enter into contracts with Hong Kong based suppliers
- The Hong Kong company does not enter into contracts with Hong Kong based clients
- The Hong Kong company products are not transported to Hong Kong
- The Hong Kong company can have employees, but they visit Hong Kong occasionally (less than 60 days per year)
Darwin Tax has helped large number of clients to start successful business with a Hong Kong company, including:
- Setting up proper corporate structure
- Tax planning
- Opening bank accounts in Hong Kong and overseas banks
- Accounting and audit service
- Setting up virtual office
We as well provide monitoring of the company structure and accounting records to ensure the company continues to benefit from Hong Kong tax regime.
HOW DARWIN TAX CAN HELP?
- Advise on structure and taxation opportunities - free of charge
- Select proper nominee structure depending on business requirements
- Introduce to Hong Kong or non-Hong Kong banks
- Set-up substance for your company with virtual office, employees, web-site, etc.
- Preparation and submition of audited financial report