Hong Kong

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Hong Kong

General information about the jurisdiction

Hong Kong (a Special Administrative Region of China) – is one of the main financial center of the world. Hong Kong was a British colony until 1997 and than it became a part of China with wide autonomous rights.

In spite of the high-tech technology located in Hong Kong its authorities pay attention to environmental issues by saving huge territories inviolable.

There is one of the highest levels of economic freedom in Hong Kong which is used by businessmen from all over the world. Although Hong Kong is not an offshore, it uses a territorial principle of taxation which means that the income earned outside Hong Kong is exempt from taxation.

1. Legislation

Company activities in Hong Kong are regulated by Companies Ordinance, cap. 32.

2. Company formation

2.1 Types of companies

Limited Liability Company (Ltd).

2.2. Limited Liability Company (Ltd):

  • The minimum authorized capital – not established. Usually, declared share capital is HKD 10 000 (≈ 1300$), payment by the moment of incorporation is not required.
  • Shares – bearer shares and shares without par value are not allowed.
  • Director – at least 1, individual or legal person, no residency required.   
  • Members – at least 1, individual or legal person, no residency required.  Nominee service may be used.
  • Secretary – is required, individual or legal person, resident of Hong Kong.
  • Publicly available information: information about directors, shareholders and secretary. The information may be hidden by using nominee service. 
  • Company is obliged to keep and submit an annual financial report, be audited.
  • Registered office in Hong Kong is required. 

3. Taxes

The taxation of Hong Kong is based on territorial principle which means that the income earned outside Hong Kong is exempt from taxation. It should be noted that the authorities examine the information about origin of the income very carefully. For tax exemption company must not produce goods, have employees, conclude treaties, have agents in Hong Kong and must not transfer goods within ports of Hong Kong. 

Corporate tax - 16,5%.

Tax on dividends – 0%

VAT - none

4. Currency control

None

5. Agreements on avoidance of double taxation

Hong Kong concluded some full and limited agreements on avoidance of double taxation, but not with Ukraine.

6. Features

Hong Kong had been in the Ukrainian tax heaven list until 2001.  Many countries consider it as an offshore jurisdiction.