Hong Kong taxes on a territorial basis. What matters is where income arises in or is derived from Hong Kong, not a generic “tax residency” test.
Short visits may be exempt. Income from services rendered in Hong Kong during visits not exceeding 60 days in a year of assessment is not chargeable to Salaries Tax.
No withholding tax on dividends or interest. Royalties for IP used in Hong Kong may be deemed taxable.
Digital nomads are remote workers who are not tied to a single location and can travel freely while working online. They may be employees or self-employed across fields such as:
- Design
- IT
- Accounting
- Marketing
- Project management
- Sales
- Software development
- Writing
- Teaching
- Transcription and translation
- Recruiting and HR
What Do Taxes Look Like for Digital Nomads in Hong Kong?
Hong Kong’s system is source-based. There is no general 183-day “tax residency” rule for charging income tax. The key questions are “Where are services rendered?” and “Where do profit-generating activities take place?”
Income from services rendered in Hong Kong during visits not exceeding 60 days in a year of assessment is exempt from Salaries Tax.
There is no capital gains tax, and Hong Kong does not impose VAT or GST.
Salaries Tax (for employees and employment income)
Income arising in or derived from Hong Kong from an office, employment, or pension.
Short visit exemption applies if the total Hong Kong days does not exceed 60 days in a year.
Hong Kong vs non-Hong Kong employment (DIPN 10)
The IRD looks at multiple factors such as:
- Where the contract was negotiated and enforceable
- Where the employer is resident
- Where remuneration is paid
If employment is classified as non-Hong Kong, only income for services actually rendered in Hong Kong is chargeable (often time-apportioned).
Current rates and how tax is computed
- Progressive bands on net chargeable income after allowances: 2% / 6% / 10% / 14% / 17%.
- Two-tiered standard rates from 2024/25: 15% on the first HKD 5,000,000 of net income, 16% on the remainder.
Tax is the lower of the progressive calculation or the standard-rate calculation.
Rental income is normally assessed under Property Tax. You may elect Personal Assessment to aggregate income sources if beneficial.
Profits Tax (for freelancers, sole proprietors, and companies)
If you carry on a business in Hong Kong, profits arising in or derived from Hong Kong are chargeable to Profits Tax.
Two-tiered rates apply:
- Corporations: 8.25% up to HKD 2,000,000, 16.5% above.
- Unincorporated businesses: 7.5% up to HKD 2,000,000, 15% above.
FSIE (2023/24 refinements): Foreign-sourced dividends, interest, disposal gains, and IP income received in Hong Kong by an MNE entity may be taxable unless economic substance, nexus, or participation conditions are satisfied.
Source: Tax Rates of Profits Tax
Property-Related Taxes and 2024 Stamp Duty Changes
- Property Tax applies to rental income from Hong Kong properties.
- Aggregation under Personal Assessment may reduce liability for some individuals.
- From 28 February 2024, BSD, NRSD, and SSD were abolished.
- Ad Valorem Stamp Duty (AVD) still applies to residential property transactions.
Withholding Tax
- Hong Kong imposes no withholding tax on dividends or interest.
- Royalties paid to non-residents for IP used in Hong Kong are deemed taxable, and a portion may be retained by the payer.
Source: Corporate - Withholding taxes
Automatic Exchange of Information (AEOI) / Common Reporting Standard (CRS)
Hong Kong participates in AEOI under the CRS. Financial institutions report specified account information to the IRD, which exchanges it with reportable jurisdictions under local law. The IRD maintains the current list of reportable jurisdictions.
Company Setup for Digital Nomads
You do not need to be physically present in Hong Kong to incorporate. File applications online via the Companies Registry e-Services portal. Banks will conduct KYC separately.
Air Corporate makes Hong Kong company setup hassle-free for digital nomads — we handle incorporation, compliance, and banking support 100% online.
Staying Compliant With Tax Regulations
- Keep records showing where services were rendered and where core profit-generating activities occurred.
- Consider Personal Assessment if you have both business and property income.
- If you become an employee in Hong Kong, you will generally be subject to Mandatory Provident Fund (MPF) rules in addition to tax obligations. Check current MPF guidance with the Mandatory Provident Fund Schemes Authority.
- For double taxation and Foreign-sourced Income Exemption (FSIE) questions, seek professional advice.
Are you searching for seasoned advice for structuring your operations to minimize your tax burden in Hong Kong? Get in touch with Air Corporate right away.
The experienced team at Air Corporate can guide you through the entire process and also help you set up a company in Hong Kong.
FAQs
There is no dedicated digital nomad visa. Some applicants consider the Quality Migrant Admission Scheme (QMAS) or Entry for Investment as Entrepreneurs, subject to eligibility.
Hong Kong has three main direct taxes: Salaries Tax, Profits Tax, and Property Tax. Self-employed profits are assessed under Profits Tax at the two-tiered rates.
As per Hong Kong laws, directors or shareholders don’t have to be physically present in Hong Kong when setting up an offshore company.
It is possible to complete the process remotely.
2% / 6% / 10% / 14% / 17% on net chargeable income, or two-tiered standard rates of 15% then 16% from 2024/25, whichever is lower.
