Taxation of Hong Kong company incorporation

Hong Kong is more or less a tax haven for its businesses, both domestic and offshore. The country has a significant trading economy that facilitates all kinds of national and multinational companies operating in Asia. It has a very liberal tax policy and there are also ways whereby you can earn tax-free profits. Therefore, if you are thinking of Hong Kong company incorporation, now is the time. 

The huge tax advantage and liberal taxation policies not only favors the domestic investors, but it equally benefits non-citizens who are interested in an HK company formation. The law of tax is equal for every kind of investor. Hong Kong companies can be easily incorporated in the People’s Republic of China or anywhere in Asia. They are slowly becoming the financial hub of trading activities in Asia as companies easily enjoy the tax-friendly environment and business-friendly legal systems. 

Following are the taxation policies of Hong Kong companies:

The taxation policies of Hong Kong is generally based on territorial source principle, which translates to companies incorporated in the country paying tax only on income or profits sourced or earned in Hong Kong. 

The three major tax categories are- 

·         Profits Tax

·         Salaries Tax

·         Estate duty

The profits tax is based on the profits earned or sourced by the incorporated HK Company; salaries tax is based on individual’s income; estate duty is based on the area of property owned by the company.

This is plainly the taxation policies of Hong Kong. There are no withholding taxes on dividends or interests, no capital gains, and no sales tax. 

Therefore, if you are thinking about a limitedcompany formation in Hong Kong, go for it. The country has a great support system for its business houses. Take the help of business consultancies if you are new to the country and they will be of great help.