Hong Kong has been the destination of many companies all over the world and for god reasons. Although not officially a part of China, the city enjoys independence, economic and political stability, as well as modern infrastructure. It is the ideal gateway for companies which would like to access the buzzing Chinese economy and the rest of the Asian region.
Starting a business in Hong Kong is not a difficult feat. Tax planning in Hong Kong is relatively straightforward compared with other jurisdictions because it has simple tax laws.
Using a Limited Company to Start a Business in Hong Kong
There are many advantages and limited liabilities to using limited companies when starting a business in the city of Hong Kong. When you look at limited companies from a legal perspective, it is a separate legal entity and it has the capacity to institute proceedings. The directors and other shareholders of the company will not be liable for the company’s debts.
Conditions of establishing a legal company
A limited company can be established by one or more persons. Any of the people who established the company can be a shareholder, a secretary and also a director. There are no restriction son secretaries who are individual persons as long as they are a resident of the city. There are also no restrictions the nationality and residency of the director and shareholder. There is no limit to the capital of limited companies as long as it is not less than a single Hong Kong dollar.
Starting a Business Quickly in Hong Kong
There are plenty of ready-made companies in Hong Kong which have not commenced business yet. These companies also do not have debts or liabilities. These companies are called shelf companies and they are the best choice for people who would like to start a business immediately.
Shelf companies are registered in the Companies Registry and already have the Certificate of Incorporation. The amount of money an investor as to shell out for a shelf company is just about the same for fresh companies.
Taxation in Hong Kong
Only profits or income arising in Hong Kong are taxable and this is why investors like starting a business in Hong Kong compared to other places. There is no tax on capital gains and the current corporate profits tax rate is only 17.5%.
On the other hand, salaries tax is imposed on income arising in Hong Kong from any employment. Tax is deducted on a sliding scale which ranges from 2%-20%.
Starting a business in Hong Kong is easy and quick. This is one of the reasons why investors flock to the city because it offers a lot of advantages.