1. Intro
Recognized as one of the most competitive economies in the world, Hong Kong is the gateway to Asia and the door to the American and European markets for international investors. Capital freedom, free financial markets, and post-investment benefits are the primary factors that entice international investors to establish businesses in this country. All of these factors have played a significant role in defining Hong Kong as a leading investment destination for global investors establishing companies there.
2. Why set up an offshore company in Hong Kong?
2.1. Simple procedures for installation and maintenance
Hong Kong is renowned for its easy and fast business establishment due to the availability of the coherent information, the simple documents that need to be prepared, and the speedy time it takes to get the results.
The process of registering a business takes only 2–4 days from the date the complete application is sent in. This is because all you have to do is send in the required information and documents for each type of business. The business application is registered at the Hong Kong Business Registry (also called the Companies Registry, or CR).
The validity of the Business Registration Certificate (BR) of Hong Kong companies is only valid for one (1) year from the date of registration of the business establishment. Accordingly, Hong Kong companies need to renew and maintain their operations for each subsequent year. The work above is also pretty easy. In addition to sending in tax reports as required, each company only needs to send in annual reports to renew (BR) and keep the business running.
2.2. Transparent, dynamic, and free regulations on enterprise law for foreign investors.
Hong Kong's economy, considered one of the freest in the world, is based on free market, free trade, and open to business principles. The regulations of Hong Kong are open-minded, facilitating and encouraging foreign investors.
In addition, the cost of setting up a business is also a concern for foreign investors. With a favorable and reasonable state fee, REFINY is committed to providing the most competitive fee available today.
The Hong Kong corporate law does not limit the percentage of capital holdings for foreign business owners; business owners have ownership rights in mostly or all of their own companies; each company can have a maximum of up to 50 members of the executive team, with no requirement that the director be a Hong Kong resident, no minimum capital, and no control over foreign exchange flows.
2.3. Attractive tax system
Taxes are a big worry for anyone who wishes to launch a business, whether domestically or internationally. Hong Kong is famous as one of the "tax haven" countries for businesses.
a, Corporate profit tax
In order to implement the principle of avoiding double taxation, Hong Kong applies a territorial tax policy, i.e., tax is only imposed on profits derived from or originating from transactions in the territory of Hong Kong. Therefore, profits for foreign companies (if they can prove their profitable origin outside the territory) will be exempt from corporate income tax in Hong Kong.
The tax rate is equal to 8.25% for profits below 2,000,000 HKD and 16.5% of profits in excess, applicable to companies operating in Hong Kong or having customers in Hong Kong. This tax rate is the most competitive in the world in comparison with the corporate profits tax in other countries, which ranges from 17% to 30%.
c, Single-tier tax system
Hong Kong's single-tier tax system (STS) allows corporate profits to be taxed only once. This means that dividends distributed to company shareholders will no longer be taxable.
d, Tax in case the company makes a loss
In the event that the company suffers a loss or damage during an accounting year, this loss or damage can be carried forward indefinitely and deducted from the future profits of business activities for tax purposes. This continues to be a tax reduction regulation for corporations.
Additionally, Hong Kong does not apply Value Added Tax (VAT), Goods and Services Tax (GST), Sales tax, Withholding tax.
2.4. Payment advantage:
Comparing the charging policies of PayPal payment gateways in Vietnam and Hong Kong reveals that the transaction fee for international sales accounts in Hong Kong is lower than in Vietnam. Specifically:
| Transaction fees outside Vietnam for PayPal Vietnam account |
4.4% transaction value + fixed fee |
| Transaction fees outside Hong Kong for PayPal Hong Kong accounts |
3.9% transaction value + fixed fee x 0.5% |
The fixed is low and identical in two countries (0.3 USD and varies by currency.)
3. Information and documentation required to establish a business in Hong Kong
Along with the simple order and procedures, each owner only needs to provide the following information and documents to set up a company in Hong Kong:
1. Business Name.
2. Scan or photocopy files of the business owner's passport.
3. Scan/photocopy of the Business Owner's bank statement for the last 3 months.
4. Information about the enterprise's business activities.
Business establishment documents will be completely prepared by REFINY and clients only need to review and sign documents according to the instructions.