Taxation in Hong Kong

Taxation in Hong Kong is based solely on earnings that are incurred within the country itself.

Like other offshore company destinations, Hong Kong requires no taxation on earnings from outside of the country. While Hong Kong may not be a tax haven in the traditional sense, Hong Kong boasts no sales tax, no capital gains tax, and no withholding tax on interest or dividends.

Hong Kong is a country that neighbors most Asia-Pacific regions, yet has the “West meets East” mentality. This, plus its above described taxation laws, make it a popular offshore company destination. Even though it had been under English rule nearly since its establishment in 1842 (with a brief 4-year occupation by Japan in 1941 during the Pacific War), China resumed sovereignty over Hong Kong in 1997. However, since Hong Kong was under British rule for an extended period of time, it has maintained a high degree of autonomy from China.

 Tax benefits of a Hong Kong company:

  • No income tax on profits earned outside of Hong Kong
  • 16.5% income tax for business done inside Hong Kong (note that this is the lowest in Asia)
  • 15% salary tax for individual employment or unincorporated businesses
  • No taxation or domestic withholding on the following:
    • Capital gains
    • Sales
    • Estate (abolished in 2005)
    • Dividends
    • Interest
    • Royalties
    • Valued-added (VAT)
    • Goods and Services (GST)
    • Annual net worth

Hong Kong is not generally considered a “traditional” tax haven jurisdiction since companies situated within its borders are required to file annual returns including accounting, auditing, and taxation. It is required by law for every company based in Hong Kong to file an annual return for the Hong Kong Companies Registry. The filing must include all details on the company’s structure including the director, secretary, and shareholders.

Additionally, account records for auditing purposes are required and must be available if requested. Lastly it is important to note that all Hong Kong based companies must file a tax return even if they are not required to pay any taxes due to exemptions from foreign income.

Financial Guardian uses its wealth of experience opening offshore companies in Hong Kong to assist you in your decisions regarding this lucrative jurisdiction. With over ten years of experience and customers in over sixty countries, we can incorporate an offshore company or open an offshore bank account for you in a selection of countries. We take pride in rendering professional, discreet, personal and reliable services to our growing list of satisfied clients.