It’s an exciting time to be thinking of venturing into Asian markets especially setting up a business in Hong Kong. While later than fellow Asian countries, Hong Kong’s start-up’s arena is now goring substantially.
In 2018 the nation saw a steady upward trend in the number of local and foreign startups 201% increase to be precise. The hike is attributed to the city’s growing aspects as a financial center, tech hub and its perfect location connecting with APAC. Additionally, it’s an ideal export route for foreign entrepreneurs looking to set-up their own growing business.
Why Opening a Company in Hong Kong?
Hong Kong is considered a thriving business center in Asia
due to its strategic location for exports and connecting with APAC. Hong Kong provides a friendly political
environment, the economy is trustworthy, and the taxation system offers various
advantages for businesses.
The
city also hosts a productive legal system and various top-notch universities in
Asia that will allow you to hire qualified local staff. Due to its proximity with
Mainland China, Hong Kong also represents an interesting location for those
planning to enter the largest market in the world and the Hong Kong government
supports innovations, which attracted thousands of start-ups over the last few
years.
As
a hub in Asia, it has emerged as one of the preferred locations for some global enterprises, but not only. Hong
Kong is also rated as the best city to live in which can also be an important
asset for foreigners willing to establish in APAC.
As a
business owner, you can easily open a
business in Hong Kong and the process is very affordable and easy since the
government has streamlined the process. Foreign startups are allowed to own
100% of their companies with no requirement for resident
or specific nationality. When compared to the surrounding countries, Hong Kong
offers stability and worldwide recognition backed by an advanced financial
sector.
Opening a Business Bank Account
To open a business bank account in Hong Kong is a straight
forward process. Hong Kong is one of the members of the Financial Action Task Force and it
takes 2 to 3 weeks to complete the process of you have all the documents
and aware of the procedures.
A business bank account is different from a personal bank account and non-Hong-Kong residents are entitled to own it and to use the business credit card worldwide. Banks like HSBC offers multi-currency accounts and handy e-banking services that will allow you to remotely manage your account. In case you have questions about your financial situation, note that HSBC provides a 24/7 client service, which is super convenient, especially is you live abroad.
The Low Tax Rate for Businesses in Hong Kong
The
business tax rate in Hong Kong is the lowest compared to other economic powerhouses around. For example, in Japan, the corporate tax rate
is 31% and in South Korea 22%, but in
Hong Kong, it’s 16.5% of assessable business profits.
Companies in Hong Kong aren’t required to pay capital gains tax such as the sale of stocks, bonds, precious metals and business properties amongst others. Another significant tax benefits business doesn’t pay value-added taxes or sales taxes and no withholding tax on dividends and interest imposed on the company. Note that oversea dividends the business earn are generally offshore won’t be taxed by the Inland Revenue Department (IRD).
How to Open a Hong Kong Company?
The
process is fast, easy and affordable and can mostly due remotely but note that
there are several requirements:
- Hong Kong Companies registry, a process which can be started online.
The
next step is deciding on the company type and the most common business type is a
Limited Company.
Upon successful registration the company’s registry
issues:
The
above document is required to identify the business, dung taxation and in case
you need government funding.
The Incorporation Agencies in Hong Kong
For the registration process note that hiring an agent to open your company in Hong Kong can help you saving time while it’s not necessarily a costly service. The firm will take care of all necessary formalities and can act as a secretary company, thus hire a competent and service-oriented firm. A firm experienced with local incorporation company that can help. So, make sure you use specialist registration agency that knows the market.
Opening a company in Hong Kong is fast and offers different advantages, both from a taxation and a staffing standpoint. Hong Kong has an abundance of digital talent ready to be plucked for the right opportunity. It’s a fascinating time to be venturing into Asian markets, and with Hong Kong is proving so much opportunity for start-ups.
Give your startup the best chance of success by making sure you have a bullet-proof business plan, cover all legality’s, registrations and license requirements and hire the very best people.
