Hong Kong Company Formation Options for Foreign Entrepreneurs by anamaulida


									                             If you are an entrepreneur looking to set up
a company overseas, Hong Kong is an optimal jurisdiction for many
businesses. Whether you own an established company or a startup, the
combination of a globalized economy with a low corporate tax advantage
make it a prime place to incorporate an offshore company.Corporate Tax
RateAny HK company conducting business in he jurisdiction is liable to
pay corporate tax. Profits sourced in Hong Kong are taxed at a low rate
of 16.5%, and unincorporated businesses are taxed at 15%. Profits that
are sourced overseas, also known as 'offshore profits', benefit from a
zero tax rate, even when remitted back to the jurisdiction. Profits
derived from operating ships in Hong Kong are treated as 'offshore
profits' and are not liable to tax, but profits derived by professional
re-insurers for re-insuring offshore risks are taxed at 8.25%, i.e. half
the corporate tax rate.HK has one of the lowest corporate tax rates in
Asia and internationally, at 16.5%. Combined with low personal income
tax, the tax system is an attractive advantage for foreign entrepreneurs
looking to expand their business into Asia. An effective tax system
allows companies to conduct business without being overpowered by their
tax liabilities.Hong Kong Company IncorporationA central hub for business
in Asia, this jurisdiction is extremely popular for its political
stability, economic freedom and tax benefits.• Hong Kong has the most
globalised economy in the world, according to the newly released Ernst &
Young Globalisation Index (2011). The report analyzed 60 of the world's
largest economies in regards to the five categories of i) openness to
trade, ii) capital movements, iii) exchange of technology and ideas, iv)
movement of labor and v) cultural integration.• HK is the most
economically free country in the world, rated by the Heritage Foundation
and the Wall Street Journal (2011).• HK is positively ranked as the
world's 13th least corrupt country, in the 2010 Corruption Perceptions
Index by Transparency International, a measure of corruption amongst
public officials and politicians.• A HK company is subject to one of
the lowest tax rates in the world for a developed country, rated the
world's 3rd friendliest tax system by Forbes' Tax Misery & Reform Index
(2009).Advantages of a HK Company for ForeignersForeign entrepreneurs
enjoy a number of advantages from Hong Kong company formation,
including:1. Legal tax exemption on company profits, if sourced from
outside HK2. A company familiar to Chinese suppliers. A Hong Kong company
is popular for foreigners wishing to undertake business on Mainland
China.3. China suppliers can be paid in RMB from a Hong Kong corporate
bank account;4. No travel is required to incorporate in HK from
overseas.5. The jurisidictions reputation as a financial hub continues to
grow and is recognized as number 3 in the world after New York and
London.Hong Kong is a reputable, regulated international trading
jurisdiction. Hong Kong company formation is especially popular with
foreign investors setting up regional or global headquarters,
particularly those looking to access markets in China.Company Options For
ForeignersForeign entrepreneurs wishing to set up a company in this
market have 3 avenues to pursue. The types of business entities available
are:1. Hong Kong Limited Company - this form of company, sometimes
referred to a subsidiary company, enjoys all the benefits of a fully
incorporated business. The term Hong Kong Offshore Company can also be
applied to a Limited Company if it sources all of its business income
outside the HK jurisdiction. The HK corporate tax system means that such
a company is a tax-free company.2. Branch Office - a Branch must register
with the HK Companies Registry as a non-Hong Kong company and is not a
separate legal entity from its parent company.3. Representative Office -
a rep office cannot undertake profit making business operations so is not
suitable for objectives of most foreign entrepreneurs.Fees & support
servicesCompany formation in Hong Kong incurs standard fees, which can
include company registration, resident company secretary (if required),
virtual office, auditing and tax, government licenses, and opening a
corporate bank account. Reputable consultants are the best means to
incorporate your business, to ensure all legal paperwork and fees are
filed properly. Additionally, virtual office services can be a big money
saver as it meets the requirement of having a registered office in HK and
allows you to save the brick-and-mortar hassles of traditional set ups,
if your business doesn't justify the extra costs.Hong Kong is an
excellent location for international entrepreneurs to register their
business. It is a diverse multi-cultural environment and its recognition
as an international business hub and exciting place to live will continue
to support the investment from foreign entrepreneurs.

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