As an entrepreneur, you’re not bound to living in one place and there are plenty of options when it comes to incorporating your company. Especially if you are running an online business and living the digital nomad lifestyle, there's no obvious country to incorporate your company and it can pay off to compare your options. If you do want to settle down in one place, but are still considering where to go, Hong Kong may be a good choice as well. Here are the top 6 advantages of incorporating your company in Hong Kong.
1). Easy & cheap
The process of setting up a company in Hong Kong is straightforward and can be done remotely in a few days. You can find the basic fees charged by the Hong Kong government here. There may be some additional fees if you are hiring an agency to help with, for instance, the paperwork or providing a (virtual) office address. The total costs are, however, still low compared to establishing a company in most other offshore jurisdictions.
Unlike some other (offshore) jurisdictions, Hong Kong law allows foreigners and non-residents to be the sole shareholder and director of a company, so you do not have to partner with a local resident in order to establish your business.
In the past, the only reason you'd have to visit the city in person was to open a bank account. However, with Neat Business, this requirement has now been removed as well, which makes setting up a Hong Kong company easier and cheaper than ever.
2). Tax System
One of the major reasons to set up a company in Hong Kong for non-residents is its favourable tax system. Profit tax is set at 16.5% for companies and profits made outside of Hong Kong are not taxed, which can save you thousands of dollars a year (do note that you may still be required to pay taxes in your home country). Besides a general low tax rate, the Hong Kong tax authority also allows business owners to write off a wider variety of expenses compared to many other tax authorities. Please check with a certified accountant on what tax deductions your company can benefit from.
3). Global Business Center
Hong Kong consistently ranks as one of the most business friendly cities in the world, with one of the freest economies. Hong Kong has a stable economy and independent rule of law. If you’re running a high-tech startup, your intellectual property may be your most important asset and Hong Kong ranks one of the best in the region when it comes to protecting your IP rights. And while Hong Kong offers competitive tax rates, it is considered a reputable business center and incorporating a company in the city will normally not cause any issues with tax authorities in your home country or put you on a blacklist.
4). Up-and-coming startup ecosystem
The startup scene in Hong Kong has grown rapidly over the past few years and Hong Kong now has thousands of startups. While Hong Kong has always been known as an entrepreneurial city, interest in the past was mainly in traditional sectors, such as real estate or retail, but interest in (tech) startups is growing. This is evidenced by the rapid growth in co-working spaces, incubators and accelerators. To get you started, you can find a list co-working spaces, incubators and accelerators here.
Easy access to many cities in Asia, as well as of course mainland China, make Hong Kong an attractive hub if you are doing business across Asia or globally. It's ideal for an e-commerce businesses, as you can easily get your products shipped from China, and global shipping from Hong Kong to the rest of the world is relatively cheap. There are also plenty of service providers that can help you with your warehousing or dropshipping needs. In addition, you can find many potential employees who are trilingual (Cantonese, Mandarin, English), which can be of huge advantage. And don’t worry if you don’t speak the local language, getting around and surviving in Hong Kong with only English won’t be difficult.
6). Great place to live
While sometimes it may feel as if your startup consumes your entire life, balance is key to having success in your startup as well as personal life. Hong Kong offers many options to unwind, from hikes and remote beaches to world-class dining and vibrant nightlife: there’s something for everyone. There are few other cities in Asia that offer so much diversity in terms of activities within a convenient 30 minute public transport ride. What are you waiting for?