Business As Usual in Hong Kong
Historically, tax rates increase during bleak times in hopes of bringing in cost-free revenue streams.A country’s nationals are less likely to repatriate their funds when accustomed to offshore tax bargains, preventing some income from returning to mainstream economies.The money kept offshore by westerners only partially explains the continuous revenue growth in Asia.
While western countries continue to feel the effects of the global economic crises, investment opportunities continue to grow in Asia. Western countries struggle in sluggish banking and financial markets, while Asian financial centres, such as Hong Kong and Singapore, continue to grow and receive recognition as leading international financial centres.
What makes Hong Kong so important?
Hong Kong has long been the point where ‘East meets West’. Simultaneously a physical trading port, gateway to China, and western oasis in East Asia make this a convergence point of opportunity and infrastructure. The autonomous government, legal code and economy, all adapted from British systems, are familiar and trusted for western investors, providing stability for global financial markets. This blending, or bridging, of two worlds creates a formula for easily enticing and accepting FDI, turning a tiny island jurisdiction into a global financial centre.
Further to this, Hong Kong provides advantages for business and banking. For investors and companies, a Hong Kong bank account is easy to obtain and provides advantages similar to other offshore jurisdictions. Companies incorporated in other Asian countries, such as Singapore, can remit their profits to a Hong Kong bank account for a tax advantage. For growth, Hong Kong company registration is a vehicle for pioneering into China, or spearheading international profit and investments into one entity.
Below are just a few examples in which a Hong Kong company benefits at varying levels of business.
At 16.5%, Hong Kong has one of the lowest corporate tax rates in the world. The only one demanding less is next door, Macau. The strong tax advantage is most useful for a western corporation’s Hong Kong branch company or offshore company, as repatriation of profits is permitted. These subsidiary Hong Kong company structures can be registered as their own legal entities, which many companies find to be the best way to manage regional operations. The international reputation and strong commercial centre of Hong Kong is unbeatable in Asia, especially if tapping into Mainland China as part of a business strategy.
Because of the western style infrastructure, it is very easy for entrepreneurs to set up and run a business. The style of capitalism and Western legal infrastructure facilitate setting up a business and company law is in a form that many international business people are familiar with. Because Hong Kong is the gateway to China, entrepreneurs can reduce their cost base sourcing products and services nearby. China’s advantageous supply sources for manufacturing, natural resources, and labour are attractive for an entrepreneurial company looking for growth. In addition, Hong Kong’s banking infrastructure and financial services sector is first-rate and entrepreneurs can find many funding and joint venture opportunities.
Individuals & Investors
Incorporating a Hong Kong company and opening a Hong Kong bank account allows individuals and investors safety and security in an international location to meet their financial objectives, such as refinancing mortgages for foreign property outside of Hong Kong, while international consultants can house revenue from clients within one cohesive cost and tax entity/structure.
Hong Kong’s advantages can benefit every level of business ownership – from conglomerates and large corporations, to self-made entrepreneurs and individual investors. There is opportunity in its physical proximity to China, and its close ties to Western systems. High growth and returns on Asian investments are worth waking up to.