Frequently asked questions about Hong Kong
What are the advantages of setting up a company in Hong Kong?
It is inexpensive
The formation and registration fees are lower than in most other countries.
Taxes are low
For profits less than HKD 2 million, corporate taxes are only 8.25%.
Hong Kong is a global business centre
It has a fast-growing start-up ecosystem and is strategically located near China and Southeast Asia
Which business entities exist and which one is the best for me?
Limited liability company
A limited company in Hong Kong is liable for its own debts and liabilities. Hong Kong allows 100% foreign participation. It must keep books and prepare annual accounts. The accounts must be audited each year and submitted to the Hong Kong tax office. A registered Hong Kong company can only be dissolved by liquidation or deregistration.
Branch of a foreign company
A branch is not a separate legal entity and is considered an extension of the foreign parent company. The parent company is therefore fully liable for the debts and liabilities of a Hong Kong branch. There is no need for a separate audit and the operation of a branch may be terminated upon notification to the Registrar of Companies
A representative office has no independent legal status in Hong Kong, so the foreign parent company is fully responsible for its debts and liabilities. Unlike a branch office, a representative office is not required to register with the Hong Kong Commercial Register, but it must apply for a business registration. A representative office is not permitted to enter into legal contracts alone, nor can it negotiate, sign transactions, issue invoices or engage in commercial activities on behalf of the parent company. On the basis that it does not conduct business in Hong Kong, a representative office should not make profits under Hong Kong taxation.
How long does it take to set up a company in Hong Kong and do I have to travel to Hong Kong?
- It takes about 5 days to incorporate your company after ALL documents are in place. You should estimate approximately 2 weeks for the entire process.
- This includes the time to verify that the compliance standards are met and the whole process of signing and exchanging the documents.
- No, a personal presence in Hong Kong is not necessary for company formation. All documents and forms can be exchanged by mail.
What do I need to start a business in Hong Kong?
- At least 1 Shareholder
- At least 1 managing director
- Hong Kong Licensed Company Secretary
- Registered office address
- Completed registration documents
Do I need a bank account at a bank in Hong Kong for my Hong Kong registered company?
- In order to process your transactions, a business account with a bank located in Hong Kong is required.
How long does it take to open a bank account in Hong Kong?
- The duration depends on the internal audit of the respective bank. Our experience shows that at least 3 weeks are to be expected. In exceptional cases, however, it may take several months, in case of queries from the bank.
What are the requirements for opening a business account in Hong Kong?
- The company must already be registered with the company register.
- Depending on the bank, different requirements are made. Usually, the selected bank issues a list of the documents that need to be provided.
- The traditional banks require personal presence. With the new virtual banks, the application form can be filled out online, making personal presence unnecessary.
- Depending on the bank, a minimum deposit may be required.
What should I consider when choosing a bank in Hong Kong?
- As one of the top five financial centres in the world, Hong Kong has one of the highest concentrations of banking institutions in the world. In total, there are about 190 authorized institutions.
- If your company is internationally oriented, it makes sense to choose one of the 4 major banks, as they offer products for all types and levels of companies.
- A new development in the banking landscape is the so-called virtual banks, which process everything online. Here, the personal presence in Hong Kong is also no longer necessary.
Taxes & Duties
What taxes are there and what are the rates?
- Taxes on corporate profits
- No taxes on dividends
- No turnover or value added tax
- No withholding tax
- No capital gains tax
- No tax on dividends
- No inheritance tax
What is the tax rate on company profits?
- Hong Kong has a two-tier tax system
- Corporate profits up to HKD 2 million are taxed at 8,25 %. Everything above that is taxed at 16.5%.
Is there a double taxation agreement between Germany and Hong Kong?
Which Duties are there in Hong Kong?
- Hong Kong has a free trade policy. I.e. there is no customs tariff on goods imported into Hong Kong
Human resources & Visa
Can I get a work visa for my own company?
- There is the possibility to apply for an investor visa.
Which additional benefits in addition to the salary I have to consider as an employer?
- In addition to the salary, the employer is obliged to pay a share of the pension plan (MPF). This amounts to 5% of gross salary and a maximum of HKD 1,500.
- To get the best applicants, employers often offer voluntary benefits such as health insurance or housing allowance.
How do I get capable staff?
- The local labour market is very flexible thanks to legislation.
- There is a good supply of qualified personnel in the common sectors (finance, trade).
- KAYRO can help you find suitable employees.
Do you have other questions or would you like more detailed information?contact us here