Hong Kong, the land of skyscrapers, is a global financial hub, a business paradise, and the go-to destination for entrepreneurs. Since 1999 when Hong Kong regained independence, the single most notable thing is its relentless focus on supporting businesses for growth. So, whether you are in the import-export business, Hong Kong has a special place for you. Keep reading to learn the unique benefits of doing business in Hong Kong that no one is telling you.
A Brief about Hong Kong
Before looking at the main benefits to anticipate for running a business in Hong Kong, here are some important facts that you need to know:
- Hong Kong uses a devolved executive-led system of governance featuring executive, legislature, and judicial powers
- The jurisdiction has a total land area of 2,794.97 square kilometers
- The population of Hong Kong is 7.5 million (according to the 2019 estimates)
- GDP (PPP) of the jurisdiction is US $472.395 billion (according to the 2021 estimates)
- According to the 2017 estimates, Hong Kong is the 10th-largest trading jurisdiction in exports and exports
- 92.7% of the Hong Kong GDP comes from services
Special Benefits to Anticipate when Doing Business in China
One of the unique benefits of opening a company in Hong Kong is its low tax regime. Unlike other jurisdictions where taxes are as high as 20-30%, Hong Kong is different. The jurisdiction uses a two-tiered tax system, which is aimed at helping companies retain more profits for faster growth. Under this system, your company will be charged only 8.25% for the first HKD 2 millions of assessable profits. Anything beyond there is charged the normal rate of 16.5%. Other benefits that come with doing business in Hong Kong include:
- Hong Kong Serves as the Gateway to Mainland China
For some companies, the 7.5 million target market is ample for their companies, but there is a lot more to expect. Instead of confining your enterprise to Hong Kong alone, it is possible and pretty easy to access the Chinese market. Under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), you can export most products to China duty-free. So, are you ready for a huge market of about 1.4 billion? This might be the opportunity you have been waiting for to catapult the business to success.
- Easy Business Setup Procedure
The first step of taking your company offshore is registering it with the relevant authorities, but this process is punitive in most jurisdictions. However, Hong Kong is different. Here, the documents and processes required for company registration in Hong Kong are clearly defined in the Companies Ordinance. Now, to the most amazing part, you can even register a company without flying to Hong Kong. All you need is to identify a good agency of experts to help with the process.
- Hong Kong Helps Companies to Expand Globally
If you want to grow your company rapidly and take it global, Hong Kong has already laid out the red carpet. The Hong Kong administration has signed over 45 bilateral trade agreements that you can use to trade in other countries. For example, it has free trade agreements with Australia, most ASEAN countries, and the EU. All of these markets are waiting for you to exploit and make your company the multinational of your dreams.
These are some of the unique benefits that you should expect when doing business in Hong Kong. Indeed, the list can be way longer. To take advantage of the benefits, it is important to identify and work with an agency of experts in your company. The expert can help you when crafting strategies for growth and other functions, such as payroll management, accounting and filing tax returns.
