What Does the Way to Your Company in Hong Kong Start With?
The use of Hong Kong companies in today’s business conditions is seen to be one of the most efficient tools in the international tax planning. The jurisdiction reputation and the well-though-out legislation have made Hong Kong an excellent place to develop your business. While not being offshore the jurisdiction offers advantages which are virtually equal to those of an offshore.
Though foreign trade and financial operations mostly form the basis of Hong Kong economics, shipbuilding, textile, sewing, electrical engineering, and petrochemical industries also develop rapidly.
As for the taxation itself, it was established in Hong Kong on the model of that in England and has inherited the basic principles of the British Commonwealth tax policy procedures adopted in 1947.
There are no so called resident and non-resident companies in the territory of this jurisdiction. The territorial taxation principle has been adopted here. The latter provides for imposing taxes on the companies whose incomes have been received from a source located in Hong Kong only.
At present the main legislative act, Inland Revenue Ordinance, stipulates four main types of the income tax:
- payroll tax;
- profits tax (the tax rate is 16,5%);
- interest income tax;
- real property tax.
The following advantages of the tax regime in Hong Kong should be mentioned:
- The above mentioned territorial tax system which does not stipulate imposing a tax on profits received from sources outside the jurisdiction.
- Recognition of Hong Kong as a reputable financial center by most countries.
- Absence of other main taxes apart from the profits tax (16,5%)
- Personal tax on incomes of individuals is not more than 16%.
- Interest income from a deposit in Hong Kong is not subject to tax.
- No tax on dividends received abroad.
- No tax on dividends transferred abroad.
- No tax on capital income or capital gains.
OneTwoCompany offers high quality services for development of the best possible tax system in Hong Kong. Besides, our specialists will render the required associated services. This approach to work will allow you to set up your business in Hong Kong in the most efficient way and take advantage of all the benefits provided by the jurisdiction.
Difference Between Accounts in Offshore Banks and Ordinary Accounts in Foreign Banks
A bank account in an offshore bank, particularly in Hong Kong, is not different from that in any other foreign bank. However, such an account is attractive for customers primarily because it provides a higher level of confidentiality. Absolute confidentiality cannot certainly be ensured in this context, but a high level of safety and security of funds as well as reliability of different financial operations are guaranteed to depositors.