Benefits of setting up a company in Hong Kong

5 minute read

What is it that attracts investors to Hong Kong?  Investors and entrepreneurs are attracted to Hong Kong because of the stable political environment, pro-business stance, highly talented workforce, strategic location, attractive tax advantages, and a common law legal system.


Opening a business in Hong Kong is simple and straightforward and can be done remotely within a few days. Have a quick look at a few of these benefits of setting up a company in Hong Kong:

100% ownership

Companies operate in a business-conducive environment. An overseas entrepreneur can own 100% of a business in Hong Kong and be the sole director and shareholder in the company. This means you do not need a local to partner you to start a business.

Unhindered access to the mainland

The Closer Economic Partnership Arrangement (CEPA) ensures that any business set up in Hong Kong can benefit from preferential access to the Mainland market. This means all “made in Hong Kong” goods may be conveniently exported to the Mainland without tariff.


The Hong Kong Government runs several programs and offers financial incentives to help businesses grow and improve. There are several pro-business organizations to support overseas companies in the Mainland and Asia. The Hong Kong Trade Development Council runs programs to help businesses find new markets.

Similarly, advisory support is available with the Support and Consultation Centre for SMEs. There are many government funded schemes that offer financial assistance to companies facing budgetary constraints for sustenance.

Tax system

Another benefit of setting up a company in Hong Kong is its favorable tax system. Territorial source principle of taxation applies to any business operating in the jurisdiction. This means companies do not need to pay taxes on profits that are sourced from outside of Hong Kong.  Taxes are levied on profits, salaries and property with varying rates.

For revenue and income earned within Hong Kong, a corporation is required to pay 16.5% profit tax. The HK government introduced a two tiered profits tax rates in March 2018 for corporations by lowering the tax rate for the first HK$2 million of assessable profits to 7.5%.  Additionally, there is no VAT, estate duty or tax on dividends.

Strategic location

Hong Kong enjoys easy access to the world’s leading markets which is why an impressive number of international businesses have based their Asia Head Offices in Hong Kong. Whether you wish to tap into the APAC or Mainland Chinese, setting up a business in Hong Kong is the best option.

Hong Kong enjoys excellent communication and travel facilities. It boasts the fifth busiest airport in the world and is connected with cross-boundary ferries for hassle-free sea transportation from major ports.

Limited liability

A limited liability company in Hong Kong is protected by the corporate veil. A limited company protects investors and shareholders as they are only accountable only for the capital invested into the business. This means that in the event of a lawsuit, the company is liable on its own and is separate from the shareholders.

Clean governance

The Special Administrative Region enjoys autonomy in all spheres, except defense. Many foreign investors are attracted to the politically stability Hong Kong.

Free economy

Who would not want to set up a business in one of the most dynamic economies in the world? The key drivers of Hong Kong’s economy include the principles of free trade and markets. The special administrative territory of China does not exercise foreign exchange controls. The jurisdiction does not impose any restrictions on inward and outward investments or on foreign ownership.

Another benefit of setting up a company in Hong Kong is its sound banking system, backed by a sizeable foreign exchange reserve.

Liberal immigration policy

Overseas investors can benefit significantly from the administration’s liberal immigration policy. Hong Kong has a visa-free entry policy for nationals of 170 countries for 7 to 180 days. The administration has introduced work visa provisions for foreign entrepreneurs interested to relocate to Hong Kong.

Investors can also benefit from different policies and schemes in Hong Kong for the purpose of employment of foreign nationals. Find our article on work visas in Hong Kong for further reference.

Sound legal environment

The Hong Kong Law is known for its transparency, with a focus on equality. The law enforces stringent regulations for copyrights, patents, trademarks, and intellectual property. Hong Kong has imposed distinct rules and regulations related to taxation, trade and commerce, and employment, making setting up a business convenient and hassle free in the jurisdiction.

Additionally, the crime rate in Hong Kong is one of the lowest in the world. With English being one of the main languages in the jurisdiction, Hong Kong continues to reign supreme as a business destination.

Next steps

Incorporating in Hong Kong is a strong choice when deciding where to base yourself.  Stable economy, strong workforces, and business-friendly tax policies let you get up and running sooner- so you can spend less time tangled in admin and more time growing your business.

You would be amazed by Hong Kong which occupies such a tiny place and with so small a population, can be ranked in the forefront in many good aspects in the world.

At Sleek we help people everyday to set up their businesses in Hong Kong.  Talk to us for practical advice if you have any questions about incorporation.

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