If you’re reading this, you’re probably already aware that there are benefits to registering your company overseas.
Hong Kong is a popular location, but why?
What are the advantages and disadvantages, and how do you do it?
Hong Kong is a popular site for offshore registration because it’s the gateway to China.
These days, it’s a laissez-faire business hub where businesses can enjoy numerous tax-haven levels of freedom to doing business and is home to millions of companies registered abroad who want to make the most of it.
If you want to do business in China, you need to register and pay taxes just like everywhere else.
For historical and political reasons, the laws and taxes in Hong Kong are set up to expedite that registration.
Today we’ll discuss the specifics of registering in Hong Kong – what it is, why companies choose Hong Kong, the tax situation, and how to actually register.
By the end of this article, you’ll know exactly why and how to register in Hong Kong.
Offshore registration is a fancy term that means to register your company in a foreign market.
You can’t just open a business in a country – you’ve got to get the government’s permission, set yourself up to pay taxes, etcetera.
Registration is the start of that process.
China’s economy is the fastest-growing major economy in the world and registering in Hong Kong is the simplest way to enter that market.
Registration is a normal part of doing business in any country and registering a business in Hong Kong is surprisingly simple.
China has made no secret of the fact that it wants to become the world’s dominant economy.
To do that, it has aggressively pursued a policy of attracting foreign investment and technology.
Hong Kong is a pivotal part of that strategy.
While under British rule, Hong Kong served as an economic gateway to the East.
It combined Western financial systems and know-how with the logistical advantages of its location.
China maintained Hong Kong’s status as a regional economic powerhouse when it took over.
In fact, China has gone to great lengths to ensure that Hong Kong is still an attractive location to register or even incorporate foreign companies.
As a result, Hong Kong enjoys a variety of perks such as favorable tax laws, easy access to foreign exchange markets, and a highly streamlined registration process.
Additionally, Hong Kong remains far more Westernized than China.
Western companies often find Hong Kong’s legal, cultural, and economic systems much easier to navigate than those in the mainland.
Registration in Hong Kong is sufficient to meet the legal requirements of entering the mainland China market.
It’s worth noting that there are considerable advantages to incorporating in Hong Kong.
The basic tax rate in Hong Kong is about 16.5%, and there is no capital gains tax.
In fact, Hong Kong’s tax system was specifically designed to make it an attractive location to incorporate.
No, they just have low taxes. If you’re looking to hide assets or pursue other paths of questionable legality, Hong Kong probably isn’t the place for you.
The government of Hong Kong goes to great lengths to reinforce this distinction; expect to abide by the rule of law in Hong Kong.
Hong Kong’s is generally amicable to foreign corporations, but it’s not in the business of helping corporations break laws in their home country.
Maintaining low taxes while avoiding the impression of being a tax haven has been part of China’s strategy to attract foreign investment, and it’s worked.
A few examples of major companies located in Hong Kong are the Bank of China, the Bank of East Asia, and several other major Chinese companies.
Additionally, multinationals such as Esprit Holdings, Jardine Matheson, and PacSafe all have their headquarters in Hong Kong.
It’s surprisingly simple. As mentioned earlier, China is keen on attracting foreign companies, so the entire process is extremely streamlined.
There are really only four basic steps:
Now just collect your Certificates of Registration upon approval.
Registration typically takes no more than a week once these steps have been completed.
There are companies in Hong Kong whose sole business is guiding foreign companies through the incorporation and/or registration process, but the process is simple enough that most companies can do it on their own.
For more information, check out the Hong Kong government’s official Company Registry Website, found here.
Does this seem like a bunch of busy work you don’t want to deal with?
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