For about 20 years, Hong Kong has stood out as a paradise for offshore investors. If you check any large multinational out there, from MacDonald’s to Barclays Bank, the chances are that it has an offshore company in Hong Kong. So, if you are thinking of going offshore, Hong Kong is one of the best jurisdictions to consider. Here is a closer look at the main benefits of using Hong Kong for foreign investment:
A Brief Look at Hong Kong
When selecting an offshore jurisdiction, it is important to start by understanding the economic data that make it to stand out from other.
The most notable thing about Hong Kong is that it has a pro-business economy, which implies that its administration directs the bulk of its efforts to making businesses succeed.
This is part of the reasons why your enterprise is likely to succeed after offshore company registration in Hong Kong. Other important facts about Hong Kong are:
- Although part of China, Hong Kong enjoys a great level of autonomy, including making its own laws and maintaining its own monetary policies via the Hong Kong Monetary Authority (more here).
- Hong Kong has a total population of 7.5 million.
- The total GPD of Hong Kong in 2020 was US$439.319 billion.
- According to the 2017 report, Hong Kong was the 10th largest trading entity in exports and imports.
- Because of its limited land for agriculture, over 90% of the food used in Hong Kong is imported.
Offshore Investing in Hong Kong: The Main Benefits
All numbers and facts we have listed above show a jurisdiction that is ready for investors. Here are the main benefits to anticipate after expanding offshore to Hong Kong.
- Multiple Bilateral Trade Agreements
To help businesses that are coming to Hong Kong, its administration has entered into many bilateral agreements that make it easy to exploit the neighboring markets. Therefore, you are likely to find it easy to reach and sell your merchandise in Japan and Malaysia, among other states in the Far East.
- The Process of Registering a Company in Hong Kong Straightforward
Because it has no land for agriculture or minerals, Hong Kong relies on businesses to drive its economy. This is why they have simplified the process of company registration so much for investors. Indeed, offshore investors can register offshore companies in Hong Kong without travelling there. All that you need is to identify and work with an agency of experts.
- Low Tax Regime
Hong Kong uses a two-tiered tax regime that helps companies to keep the bulk of their profits. For the first two million of your business’s assessable profits, the tax rate is 8.25%. However, additional profit is charged 16.5%, the standard rate. Furthermore, Hong Kong does not have a withholding tax on rents, interests, or dividends.
- Serves as the Gateway to Mainland China
For most offshore companies in Hong Kong, one of the targets is accessing Mainland China. Through the Closer Economic Partnership Arrangement (CEPA), your company will enjoy exporting products to China tariff-free. So, all you need is to identify clients or build a supply chain network in Mainland China to exploit its market. Then, utilize the state-of-the-art infrastructure, such as rail network, airports, and inland container depots (ICD), to cost-effectively move your merchandise.
Offshore investing is considered one of the crucial steps when thinking of growing a business abroad. Hong Kong’s administration has stood out because of its impressive pro-business policies that nurture enterprises until they become successful. Consider Hong Kong as a springboard that you can use to catapult your enterprise to the next level.
