General
Hong Kong is located to the south east of the People's Republic of China,
The People's Republic of China regained control of Hong Kong in July 1997.
Hong Kong is one of the world's largest financial centres, despite its limited
size. It is, however, an unliveable area. The economic explosion of the
People's Republic of China is going to lead to the necessity of another
offshore metropolis (probable Shanghai) in future months or years.
Business Card
- Interesting tax system
- Facilities for business
- A place of global standing
- Official language: Chinese (Cantonese), English
- Population 2004: 7,483,009.00 Hab
- Growth rate: 0.880
- Surface area: 1092 km²
- Currency: Hong Kong Dollar
- Main city: Hong Kong
Banks
Banking secrecy is respected.
There are numerous local banks (more than 150).
It is extremely easy for a non-resident to open a multi-currency account.
Tax
Taxation in Hong Kong is very low; the main tax is the tax on employment
revenue. Capital tax, VAT and wealth tax do not exist.
The principle of residence or non-residence is not important in the calculation
of tax and it is the principle of "territoriality" which prevails.
As is the case for individuals, taxation on companies, partnerships and
trusts is based on the principle of territoriality. The standard rate
of taxation is 16% for commercial companies and 15% for other forms of
business, such as trusts.
The principle of territoriality makes Hong Kong a highly attractive destination
because most of the profits will not be taxed, which is the opposite of
many other jurisdictions.
As a result of this principle of territoriality, it is impossible for
a profit to be doubly taxed. Consequently, double taxation treaties are
of no particular benefit here.
Companies
Private Company Limited by Shares: Must have between 2 and 50 shareholders
with a minimum of 2 directors. The directors may have unlimited liability
if it is mentioned in the statutes. The company's annual accounts must
be published annually after auditing. The General Assemblies may be held
abroad. There are no restrictions with regard to the nationality of the
shareholders, apart from one secretary who must be a resident. This type
of company may become public after an introduction to the Stock Exchange
without any specific restrictions.
Limited Partnership : Maximum of 20 partners, in general one of
the partners must have unlimited liability (unlimited partner) with regard
to the other partners, they will be responsible for the level of their
contribution (limited partners). This type of partnership must be registered
with Hong Kong's Companies Register; if this is not the case it will be
considered as a General Partnership with unlimited liability for each
partner. The partnerships must obtain a license.
As is the case in England, a partnership with a single partner will be
described as a Sole Proprietorship and the sole partner will have unlimited
liability. The partner therefore benefits from business taxation, rather
than individual taxation and can consequently benefit from a rate of taxation
on profits instead of on income.
E-commerce
Hong Kong wants to entice investors into e-commerce, and the government
has taken two impressive measures, in cooperation with the private sector,
to allow the jurisdiction to become a leader in the area of high technologies
and the Internet.
The first measure "Digital 21 initiative" aims for all residents
to be connected to the Internet via high speed broadband.
The second measure concerns the construction of a "Cyber port",
a dedicated area for the new technologies companies, with a complete infrastructure
necessary for conducting electronic business activities.
Our understanding is that the infrastructure is developing in such a way
as to enable Hong Kong to become one of the dominant jurisdictions in
the area.
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