Offshore company formation Hong Kong

Hong Kong is a Special Administrative Region within the Peoples Republic of China, located on the South Eastern coast and consisting of part of the mainland and numerous offshore islands. Until 1997 it was a British colony. It elects its own legislature and maintains its own Court structure.

Hong Kong is a free port with excellent communications facilities and a major new international airport. China itself is developing rapidly and Hong Kong is its leading gateway. It has its own, fully convertible, currency, pegged to the U.S. dollar and it is the leading financial centre in South East Asia. The official languages are English and Cantonese.

Taxation in Hong Kong

Hong Kong is one of the very few territories that tax on a territorial basis. Hong Kong profits tax is only charged on the profits of a trade, profession or business carried on in Hong Kong. Profits earned in this way are accordingly taxed only in the country in which they are generated, even if they are remitted to Hong Kong. Income arising in Hong Kong is taxed at 17.5% and there are no taxes on capital gains, interest or dividends.

Where trading in goods is concerned the profits will arise outside Hong Kong if the negotiation and execution of the contract, in addition to the signing, is carried on outside Hong Kong. Where the profit is in the nature of a commission the activities of the commission agent must be carried on outside Hong Kong.

Royalties paid to non-residents are taxed at 5.25% or 17.5% depending on the relationship of the recipient to the payer. Except for a limited treaty covering shipping, Hong Kong has no double taxation treaties.

Hong Kong offshore company formation regulations

• *China-Corporate and personal income tax
• Belgium-Dividends, interest, royalties
• Some other countries for aviation and shipping
   

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