Over the years, we’ve assisted numerous businesses to set up and flourish in Hong Kong, from establishing their initial presence to expanding their existing operations into the country’s market.
Here are some of the insights we’ve gained over the years on this incredible business location.
A note on Hong Kong’s taxes
First off, and speaking as international tax advisers, it’s a delight to navigate Hong Kong’s tax code.
It’s acclaimed for being one of the most straightforward and concise in the world.
To give you a comparison, the British tax code spans around 17,000 pages, in contrast to Hong Kong’s 300.
However, you should be aware of certain taxes before relocating. For instance:
- Salaries Tax: This tax applies to your income and pension, ranging between two and 17 per cent, with allowances and deductions available to mitigate the amount payable.
- Property Tax: Planning to own and rent out property in Hong Kong will attract a property tax at 15 per cent of the net assessable value.
For businesses, you’ll likely encounter Profits Tax on your company’s earnings, set at 16.5 per cent for corporations and 15 per cent for unincorporated businesses.
Fortunately, Hong Kong’s tax system only taxes local income, exempting foreign-sourced income.
Moreover, you won’t have to pay VAT or Sales Tax, Dividend Tax, Capital Gains Tax, or Inheritance Tax.
This significantly benefits businesses aiming to minimise tax liabilities, positioning Hong Kong as a top global business hub.
Bamboo scaffolding but very modern skyscrapers
Hong Kong’s dynamic and vibrant atmosphere can be overwhelming for newcomers.
Its status as a business-friendly location has spurred technological advancements, with its skyline rivalling those of New York, Tokyo, and London.
Yet, the traditional use of bamboo scaffolding in construction, in contrast to the steel poles used in the UK or US, often surprises Westerners.
This practice reflects Hong Kong’s commitment to sustainability and tradition and says a lot about the city’s blend of heritage and innovation.
A note on the environment
Hong Kong’s terrain is notably hilly, especially on the island of Hong Kong itself.
The city is home to the world’s longest, covered, outdoor escalator, the Central-Mid-Levels escalator, which facilitates the daily commutes of thousands of Hongkongers.
Despite the urban growth, the hills are lush, offering outdoor enthusiasts a glimpse into the island’s pre-urban state.
For those less inclined to hike, numerous parks and green spaces are available at lower elevations, making Hong Kong an exceptional place for both business and leisure.
Hong Kong’s greenery also extends to its tax policies, with the Government promoting environmental initiatives that benefit businesses.
Investments in eligible eco-friendly vehicles and property upgrades can enjoy significant tax deductions.
The 2021/22 budget introduced the Green and Sustainable Finance Grant Scheme, further encouraging sustainable business practices.
Time to speak to a tax adviser?
The tax advantages alone are compelling reasons to consider relocating.
However, if you’re still undecided and would like professional tax advice tailored to your business needs, we’re here to help.
Please get in touch with one of our team for more information and guidance in making the move to Hong Kong.
Reanda UK is a subsidiary of leading independent accountancy firm Grunberg & Co Limited. Our aim is to help businesses and individuals to navigate the UK’s world-renowned business and tax infrastructure, and to support them with their international ambitions. To find out how we can help you, please contact us.