Why choose to invest in Hong Kong?
Hong Kong is recognised as a location for trade and value-added services. In addition, Hong Kong is the gateway to one of the world's largest manufacturing hubs : China. Here are some reasons why you should invest in Hong Kong.
Hong Kong allows everyone to invest
On a site like GuideMeHongKong, the autonomous territory is the ideal place to invest. Although Hong Kong has been part of China again since 1 July 1997, it is still considered an autonomous territory and has retained a special economic system for 50 years in terms of currency, regulations, customs and legal framework.
Despite recent investment agreements and the new Foreign Investment Law of 2020, some sectors remain closed to foreign investment, but Hong Kong encourages foreign investment, especially for the introduction of new products and the improvement of services.
In terms of taxation, Hong Kong applies a territorial test. This means that any business activity carried out in Hong Kong is taxed on its profits. As Hong Kong is a territory heavily dependent on business activity, low or no taxation encourages imports and exports.
In terms of tax rates, the progressive tax rate is 16.5% for companies and 15% or 2-25% for individuals. According to the law, all normal business expenses, such as entertainment expenses, employee benefits in kind, consultancy costs and depreciation of fixed assets, can be deducted from taxable profits. There is no VAT in Hong Kong.
Profits, dividends and capital gains on assets and repatriation of dividends from branches are also tax-free. For this reason, multinational companies establish branches and subsidiaries in Hong Kong.
To avoid double taxation, Hong Kong signed a tax treaty with France in 2010, which came into force in 2012, with a text that recognises the principle of withholding tax in Hong Kong, eliminating the risk of double taxation for French companies established in the territory.