Are you preparing to set up a company in a foreign country but can’t decide which country should be the one? Well fret not, Hong Kong is by far the best choice. Why? Take a look below to understand the reasons why you should set up a business in Hong Kong. If you decide to set up your company in Hong Kong, below, you will also find a guide on starting a business in Hong Kong and get it running immediately.
Reasons for starting a Business in HK
If the reasons listed below excite you, then you must consider the following compelling reasons to start a business in Hong Kong. Foreign investors largely contribute to the dynamic growth of the economy, and therefore the government of Hong Kong has established special programs for them.
- Economic Growth of Hong Kong
The vibrant economy of Hong Kong is the principal reason why you should start a business in Hong Kong. The financial freedom of this country stands in the first place, both regionally as well as internationally. This independence is provided by:
- Transparent legal laws
- The open market of Hong Kong
- Economic policies
- Security to the property rights
- Efficiency in the regulatory systems
- Attractive Government Initiatives and Policies
Foreign investors are enthusiastic about starting a company where the government is supportive. Hong Kong grants 100% ownership to foreigners. Consequently, they can be the Hong Kong business proprietors and enjoy the senior-most position in the firm. The government of Hong Kong has begun Investing in a section that offers free investment promotion to the business and provides services to foreign companies.
- Geographical Position of Hong Kong
Hong Kong is located in Central Asia, and therefore it gives the business accessibility to various trade markets, especially mainland China. The strategic situation of Hong Kong is one of the many compelling reasons why investors are drawn towards Hong Kong. Investors who receive access to a broad range of markets are always ready to grow their business to such regions, and Hong Kong is one of them!
- Less Burden of Taxes
Hong Kong’s corporate tax rate is meager compared to other nations. There are no dividend sales taxes or VAT here. The current charges of Hong Kong 16.5% profit tax, 15% for property tax, and 15% of salaried fees. This low tax regime granted by the Hong Kong government is one of the primary reasons why businesses are expanding their business to Hong Kong.
Business Structure:
Some famous business structures of Hong Kong are listed below.
- Limited Company
Small and medium-sized businesses usually organize this type of entity. You require to hire at least one director and one shareholder to set up a limited company. There is no capital amount required for starting this business.
- Branch Office
The parent organization begins as a Branch Office. The headquarters decide all the actions of the branch office. The debts and accountabilities of the branch office are accountable to the parent company.
- Subsidiary Office
The subsidiary office operates similarly like a branch office except that it is liable for its debt and liability.
- Representative Office
A representative office is an attractive way to explore the market of Hong Kong before growing your wings here. An RO cannot do any income-generating business here.
- Sole Proprietorship
This business has a single owner and is the best fit for small firms. The owner of the firm is accountable for all the debts and can enjoy the profits after giving income tax.
- Partnership
When two personages come together under an agreement to work together, a partnership firm is built. There are two types of partnership companies:
- General Partnership is where the investor is solely liable for the firm, including the partner’s work.
- Limited business is best to advance where you are liable for your contribution, but you cannot guide any activities of the company. It is settled between the principal partner and the limited companion.
https://www.ird.gov.hk/eng/tax/bre_abr.htm
How to Start a Business in HK
The procedural actions of business registration are:
- Choose a Company’s Name
Pick a unique name for the organization before registering a company in Hong Kong. Make sure that the title that you have selected is exceptional, and no other firm has the same title as yours in Hong Kong.
- Register the Company
Petition for business registration to get a business registration certificate. Ensure your application form has been rightly filled to avoid rejection. You can do this easily by selecting the right business entity and filling other details.
Follow the link below for more information on how to register a business in Hong Kong.
https://www.gov.hk/en/business/registration/businesscompany/index.htm
- Open a Local Bank Account
After your company has been registered with the Inland Revenue Department, you are required to open up a local bank account. Hong Kong is a universal leader in banking and offers a multi-currency facility to you.
- Register a Local Business Address
You need to have a local business address so that you can get the newsletter, and it becomes a mailing location for your business.
- Hire Employees
Depending on your business requirements, you must hire local workers for your business. Contracting can be a challenging task if you are new in Hong Kong. Hence we suggest that you enlist a firm that will recruit the needed employees for you, depending on your specification, by giving out job openings.
- File Taxes
Once your company has started its operation, it is necessary to pay taxes to the government and present the annual financial report. You can hire an accountant so that he/she can help you in filing returns and growing the overall business operations, thereby cutting down additional costs.
You may refer to another article by following the link below for more information:
https://www.gov.hk/en/business/supportenterprises/businesstopics/licensing.htm
