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Doing Business in Hong Kong

Hong Kong, a Special Administrative Region of the People’s Republic of China (PRC) since its reversion in 1997, has proven in past economic crises to be exceptionally resilient. Dominant and sustained drivers of economic growth include private consumption (retail), logistics and business services, financial services, real estate development (bolstered by ongoing public infrastructure works), and tourism.

Hong Kong is an ideal platform for doing business in Asia. Hong Kong is a free port that does not levy any customs tariff and has limited excise duties. Its strong rule of law and respect for property rights make it a strategic platform for Asian companies, especially small- and medium-sized firms, seeking to do business in the region.

Hong Kong’s businesses enjoy close links to mainland China and the rest of Asia. Hong Kong has benefited from continued economic integration with mainland China’s growing economy. In particular, Beijing’s policy of opening its service sector and gradually expanding the scope of the offshore renminbi (RMB – the PRC’s currency) market in Hong Kong and the sustained high numbers of mainland Chinese visitors have strengthened Hong Kong’s economy.

Hong Kong’s attractiveness in living and doing business is appealing, offering benefits that are uniquely available among other cities:

● A strategic gateway to growing Mainland China markets;
● A regional financial and logistics hub for expansion across Asia;
● A stable, highly efficient, business friendly cosmopolitan.
● Complete freedom of capital movement
● Clean and efficient government
● Low and simple taxation
● Close proximity to markets in Asian markets
● Highly skilled workforce

Author: Chandrawat & Partners

Date: April 2022

Topic: Doing Business in Hong Kong 2022

Download our comprehensive guide on – Doing Business in Hong Kong.

INTRODUCTION

Hong Kong is an appealing place to do business and a leading international trading and service hub, ranked as the world’s freest economy for over a decade. Hong Kong is a highly value-added manufacturing base in the world and a gateway to investment, supporting around a third of the foreign capital that flows into China. According to World Bank Doing Business Survey, Hong Kong is ranked third in terms of ease of doing business in the world.

Hong Kong is an exceptional place with prominent location on China’s southern coast with one of the world’s highest GDP per capita. Currently enjoying the status as Special Administrative Region of China, Hong Kong is former British colony with an extraordinary culture. With Ancient Chinese heritage and influencing experience of Western and colonial period, Hong Kong is a versatile city where English and Cantonese exist side by side.

Hong Kong is in five hours’ flight accessibility from most major cities of the world (comprising around half of the world’s population) and is well-connected by ferries and trains along with other efficient and affordable public transportation network.

As a global commercial and financial hub, Hong Kong welcomes people from all backgrounds with no discrimination. Everyone enjoys equal access to the outstanding public health system, freedom of expression, and exceptional municipal facilities. Hong Kong have consular offices of various nations which help and provide assistance to foreign people in case of any difficulties.

Besides its stunning modern skylines, excellent telecommunications, transportations and public healthcare facilities, the cost of living in Hong Kong is considerably less than many nations in North America or Europe. Moreover, students also enjoy great discounts on essentials such as transportations, arts and cultural events.

The Government has been encouraging a market driven economy with minimal government interference policy. It provides world famous healthcare structure with constant emergency and medical services. Unrestricted & free Wi-Fi services are widespread in the City with many Wi-Fi hotspots. It has a very low crime rate as compared to other countries in the world.

Hong Kong is the Asia’s second largest and the world’s third largest Foreign Direct Investment recipient with Hong Kong Dollar as the official currency. Its exchange rate has been constant from past 30 years at about HKD 7.8 to USD 1. ATMs are available everywhere in the City with no or less restrictions for outsiders to open bank accounts.

Although the Government of Hong Kong exercises minimum intervention policy towards business and industry territory regulation, investors still need to be cautious & aware of regulatory attributes relating to diverse sectors.

This guide proposes an overview of the key features of Hong Kong as a potential location for your business.

Establishing An Entity

In Hong Kong, company may be formed either by guarantee or limited by shares or unlimited. A company limited by shares can be a public or a private. A subsidiary company is usually limited by shares..

Government Initiative And Incentive

The Hong Kong Government is committed to support SMEs and startups to help realize their vision and take their business to the next level, providing an appealing tax environment for foreign..

Taxation

Hong Kong is considered tax heaven worldwide for its simple and low tax regime, making it one of the most business-friendly jurisdictions in the world. Tax in Hong Kong is bifurcated..

Foreign Investment

Hong Kong is known as a beacon of capitalism because  of its free trade agreements & very low taxes. Hong Kong is consistently labeled as the world’s freest & most abled economy by highly..

Trade

Hong Kong is one of the fastest growing markets in the world being a founding member of World Trade Organizations and a member of Asia Pacific Economic Cooperation..

Foreign Currency

Hong Kong is a key financing channel, holding one of the largest stock markets in the world and providing the biggest gateway for international investment. Hong Kong has become one..

Employment Laws

The most significant and comprehensive piece of legislation regulating conditions of employment in Hong Kong is the Employment Ordinance. The legislation provides the basic protection..

Immigration

Non-Hong Kong residents who possess special skills, knowledge and has expertise which is not readily available in Hong Kong may apply before concerned Hong Kong immigration..

Auditing

It is often beneficial to start a business at Hong Kong due to its straightforward taxation system, low tax rates and territorial concept for profits tax.The system may be different from other..

Work Permit

In Hong Kong, employment contract can be a permanent one or for a fixed term. In case a period is not specified in the contract, it is deemed to be a contract for one month..

Banking

Hong Kong holds one of the largest representations of international banks around the globe with extensive, historical existence of multinational banks..

Dispute Resolution

Hong Kong is an ideal hub to resolve international business disputes for foreign parties conducting business in, or with parties based, in Hong Kong and also acts as a bridge..

Winding Up

Winding up is a legal process of selling & converting assets into cash to repay debts. In Hong Kong, two most common methods for winding up a company involves Voluntary..

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Chandrawat & Partners is a leading full service firm in Hong Kong. We provide a wide range of high quality consulting services to domestic and international clients. With a strong network of professional advisors worldwide, we have a wealth of first hand experience and expertise in providing effective solutions to the complex issues.

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