Advantage of setting up business in Hong Kong
ADVANTAGE OF SETTING UP BUSINESS IN HONG KONG
If you are thinking of starting a business somewhere in Asia then Hong Kong should be the number one country in your list. Renowned as the global business cities of Asia, there are several factors which make Hong Kong the perfect place to start any sort of business. Hong Kong has a population of 7 million with a GDP per capita of US $43,700. All these just indicate that Hong Kong is thriving as a nation. With all that said listed below are some of the factors which highlight the advantages of setting up a business in Hong Kong.
To say that Hong Kong is strategically placed to perfection would be an understatement. It is expected that two-thirds of the global middle-class people will be comprised of the Asians. As a result, more and more companies and investors are taking up a huge interest in entering and capturing the Asian market. Hong Kong’s geographic position is such that it is only four hours flight away from all the major Asian market regions.
Hong Kong also happens to be strategically in close proximity to China. It is often viewed as the gateway to entering the Chinese market. Besides, businessmen all over the world think it’s easier to open operations in Hong Kong and then trade with China rather than flying all the way to and fro from their own countries. Hong Kong is just one hour’s drive away from the world’s biggest manufacturing region, Pearl River Delta. This means Hong Kong easily has the access to the 450 million consumers present in the Southern China.
Any companies that are starting in Hong Kong will be able to benefit from all the developed air, rail, and road and sea links. All these are both efficient as well as modern. Hosting direct flights to over 150 international destinations and handling over 50 million passengers every year, the Hong Kong international airport happens to be one of the busiest airports in the world. In fact, it is the busiest airport in all over Asia and Pacific. The transit from the airport to the Central city is very convenient and fast. The Airport Express will get you to the city within 23 minutes. Transportation within the city is very affordable and reliable too with their taxi services being the best according to Forbes Magazine.
That’s not all. Hong Kong’s international cargo airport happens to be one of the worlds busiest as well. It ranks 3rd in terms of the busiest container port in the entire world. The Hong Kong container port ships 100 different international lines and connects to over 5000 destinations spread across the entire globe.
Policy and Tax
According to the Heritage Organization’s 2009 Index of Economic Freedom, Hong Kong is the world’s freest economy. Based on the Transparency International –Corruption Perceptions Index 2008, Hong Kong also happens to be the 12th least corrupt country in the entire world. Both of these are just massive indicators that in terms of doing a business you won’t find anywhere as secure, efficient and with a reliable jurisdiction than Hong Kong. It is as if the whole nation was built to provide a safe haven for all the companies to conduct their business.
The taxation policy of the country is one of the prime reasons as to why so many companies are setting up their business over here. Any business that incorporates in Hong Kong will be able to enjoy all the low tax rates and the simple taxation system. Corporate taxes are fixed at a staggeringly low rate of only 16 percent. On the other hand, income tax has a ceiling of only 15 percent. This means only a handful of the money that you generate from your business will be going to the government’s fund and the rest can be thoroughly enjoyed by you. According to Forbes Tax Misery Index, Hong Kong has the third lowest tax misery in the entire world. And it is quite understandable why the rating is so good because there is no sales tax, capital gains tax, or even dividends tax in Hong Kong.
In terms of setting up a business in Hong Kong, you will not find a simpler or a more cost effective incorporation anywhere in the region. According to the World Banks’ Doing Business survey (2009), Hong Kong ranks as the 4th easiest place to do business in. It only takes around 2 weeks to legally incorporate your business in Hong Kong.
The requirements for starting a business in Hong Kong are very straight forward. Their only must follow the rule is that every company should have a director who can be of any nationality. Alongside the director, there should be a company secretary who needs to be a Hong Kong resident. The same person cannot hold the role of both these people, however. You will be required by law to audit your financial statements annually. Quarterly reports are not a necessity in Hong Kong. This ensures that conducting business in the country is very easy and user-friendly too.
With all that we pretty much sum up the various advantages, there are in setting up a business in Hong Kong and why so many entrepreneurs find this country the most viable place to conduct their businesses.