Tax Haven Hong Kong

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Tax haven Hong Kong is a predominant offshore financial centre in the offshore world. As a tax haven, Hong Kong is endowed with a diverse network of financial institutions and markets which make a broad spectrum of services available to both a domestic and global clientele. A major feature of tax haven Hong Kong is the high liquidity ratio of its financial markets, transparency in regulatory framework and compliance with internationally established financial policies.

Providing a favorable environment for businesses, as well as simple and minimal taxes for the corporate public are the principle basis on which the tax haven Hong Kong’s government controls the country’s market.

Country Overview

Tax haven Hong Kong is officially known as the Hong Kong Special Administrative Region. Tax haven Hong Kong is located in East Asia in the southern part of China and has a very large population of about seven million. For several years, tax haven Hong Kong was a dependent territory of the United Kingdom up till the transfer of sovereignty of Hong Kong to China in 1997. Approximately 95% of Hong Kong’s population is composed of Chinese descendants, while there are a variety of South Asian ethnic groups including Pakistanis, Sindhis, Nepalese and Indians, as well as Vietnamese. A fairly large population includes Americans, Japanese, Canadians, Australians, Europeans and Koreans who have either settled in tax haven Hong Kong as expats or are employed in financial and commercial businesses.

Tax haven has eighteen administrative districts which are represented by district councils which are responsible for consulting the governments on issues such as upgrading the physical environment, public facilities, cultural programmes and community activities. Prior to 1842, Hong Kong tax haven’s name referred to an inlet which is now known as Little Hong Kong or the Aberdeen Harbor.

Hong Kong tax haven adheres to the ‘one country, two systems’ when it comes to politics. Despite having the status of a special administrative region Hong Kong exercises a lot of autonomy, except in matters relating to international affairs and defense. The constitution of Hong Kong tax haven is known as the Basic Law and provides an outline for the judicial, executive and legislative councils of Hong Kong. The Standing Committee of the National People’s Congress interprets the Basic Law. The Chief Executive is in charge of the Executive Council, the members of the legislature are elected by popular vote, and the judiciary consists of the High Court, the Court of Final Appeal and the District Court.

Hong Kong Fiscal Incentives and Advantages

Hong Kong tax haven presents endless incentives and benefits for companies in the areas of commerce, entrepreneurship, manufacturing, telecoms, science, R&D and services. Not only is the fiscal regime friendly and applied on a territorial basis, but under the Closer Economic Partnership Agreement, Hong Kong tax haven exerts its prominence as a leading, competitive and revolutionary financial and business centre. Among the many benefits that Hong Kong tax haven offers, the following are found:

  • Zero tax on offshore income
  • Professional and highly trained professionals
  • Gateway to China
  • Rule of Law
  • Readily available information
  • Strategic geographic location
  • Free economy
  • Low taxes
  • Modern infrastructure
  • Free economy
  • Transparent government

Hong Kong Offshore Financial Services

In September 2007, it was recorded that tax haven Hong Kong had a total 30 deposit-taking companies, 142 licensed banks, 29 restricted license banks, and 82 local representative offices of overseas banking institutions, administering a total of almost 1,330 local branches. Under the CEPA a series of liberalisation measures took effect. For example, from 2006, all products that were manufactured in Hong-Kong were able to enter China free of duty as long as those products were compliance with the necessary rules of origin. Also, in January 2009, 29 liberalisation measures were implemented with regard to 17 services sectors, bringing the number of measures implemented for to liberalize services to over 200. Offshore/international services offered in Hong Kong tax haven include:

  • Hong Kong company formation services
  • Offshore banking
  • Asset management
  • Investment brokerage
  • Fund management
  • Finance factoring
  • Real estate
  • Legal, financial, management and policy consulting
  • Asset valuation
  • Patent agency services
  • Logistics
  • Convention and exhibition services
  • Securities
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