Hong Kong

Strategically located in central East Asia, Hong Kong is a natural gateway to and from Mainland China. Built historically as a free market economy, Hong Kong has grown into a contemporary international business platform.

Working with the “one country, two systems” concept, Hong Kong is a Special Administrative Region (SAR) of China and enjoys high autonomy in running its affairs. Hong Kong’s corporate income tax rate is 16.5%. Dividend income and capital gains are not subject to corporate income tax.

Since its sovereign changeover, Hong Kong has maintained its status as an international finance center, and the leading business and trade hub of the region. Growth continues to be rapid, with the support of China.

As one of the premier international financial centers, Hong Kong acts as a preferred conduit for foreign direct investments into China. The jurisdiction has developed a high standard of financial services and compliance, with highly trained professionals. As a result, Hong Kong financial specialists are experts in managing risks with respect to investments into China.

The Hong Kong regime is well suited to international revenue planning. The income tax system is based on the source principle (i.e. territorially). This system only taxes profits arising from business activities occurring within the territory of Hong Kong.

As a result, all non-Hong Kong sourced income may be collected tax-free. No withholding tax is imposed on dividends and interests paid from Hong Kong investments.

Furthermore, Hong Kong does not have thin capitalization rules that restrict the amount of tax deductions corporations may claim for interest expense, if debt funding exceeds a certain limit.