With its free trade policy, low tax rates, and not-too stringent compliances, makes Hong Kong a good place to do business, learn more
Is Hong Kong a good place to do business? well, yes. However, it could pose a number of challenges to budding entrepreneurs. More so, if it is a start-up! In the corporate world, only the fittest survive, and to be the fittest, one has to make the right decisions at the right time. Next to the fierce competition in the market, and the struggle for finding investors, the biggest ultimatum is, stationing the business at a strategic location. The same would be the case when a business owner strives to expand an existing business across countries.
Why Hong Kong?
It’s not child’s play to operate a business in a foreign nation. It’s imperative that the business owner does the groundwork exhaustively before setting foot in a foreign country. This is regardless of having a physical or a virtual office in the said location. It’s a known fact that the first preference for any entrepreneur would be to expand the business within Asia, considering the length and breadth of the continent, and the varied population it encompasses. Once again, choosing a prospective Asian country is not as easy as putting a finger on the map. Among the several Asian countries, Hong Kong has been competing equally with China, Singapore, and others, to lure entrepreneurs to install their business stations there.
Also, many business owners opine that Hong Kong’s market is relatively easier to enter, given its free economic policy and the ease of registration of business. Further, the fair legal framework and incentivized taxation policies are additional feathers on the cap. The following factors make Hong Kong the top favorite business location in Asia.
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Business Incorporation:
It might sound unbelievable, but in Hong Kong, the registration of any business could be done within a week. Also, the prerequisites like documents and other applications needed for the incorporation are quite straightforward, without driving the entrepreneurs to their wits’ end. These requirements are almost similar for resident and non-resident business owners. The process is so simplified that it does not even require a business owner to be physically present in Hong Kong to start a business there. Cost-wise, the incorporation charges are much more affordable without costing them a fortune. Saving the best for last, the most striking feature of incorporation of company in Hong Kong is that there are no minimum share-capital requirements to start a company.
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Reasonable Tax Charges:
The income tax levied for corporate businesses in Hong Kong is 16.5%. Hong Kong has always shown consistent efforts to encourage entrepreneurs by keeping the tax rates consistently low. Currently, Hong Kong is operating with a 15% corporate tax and this makes it the country to have the lowest corporate income tax in the world. Personal income tax on the other hand ranges between 2%-17%. In short, in Hong Kong, one gets to take home the major share of the money they earn. Also, indirect taxes such as VAT (Value-Added Tax) and GST (Goods and Services Tax) are not applied in Hong Kong. This makes entrepreneurs cast their votes for Hong Kong as the best Asian region to carry out their businesses.
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Flexibility in Business:
In Hong Kong, it is not mandatory that the director of the company should be a natural person. A company or a corporate body can also act as the director of a company. This gives immense flexibility to business persons to administer their company in Hong Kong even from a remote location. If the business owner should wish, a nominee can be appointed to act on behalf of the company in Hong Kong.
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Free Trade:
Hong Kong has been flaunting its free trade policy for some time now. Hong has declared itself as a free port, which means one gets to import or export from Hong Kong without any import-export duties. Hong Kong acts as an excellent business hub as it is well connected to mainland China and to the other Asian superpowers. Between Hong Kong and China, there exists a free trade area by virtue of the CEPA (The Closer Economic Partnership Agreement). Hong Kong has also struck such agreements with several other established economies like Australia and New Zealand and several other members of ASEAN (Association of Southeast Asian Nations) and the European Free Trade Association.
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Minimal Currency Restrictions:
In the current scenario, especially when a business goes international, it is inevitable to avoid dealing with multiple currencies. To facilitate this, Hong Kong has kept its economy free of foreign exchange controls, thus enabling the exchange of currencies without restrictions. Hong Kong also allows the use of foreign currencies liberally. For instance, a company can opt to pay its share capital in any major currency and not just in Hong Kong Dollars.
Thus, Hong Kong poses too many advantages to be listed from the perspective of international business. Further, Hong Kong is viewed as a gateway to entering China. With the number of business establishments buzzing in Hong Kong, it is now ranking on par with cities like New York, London, and Paris. The companies incorporated in Hong Kong or the ones that have their foreign branches stationed in Hong Kong are viewed with much credibility. These companies gain prospective clients easily and exhibit a remarkable growth curve. It is highly doubtful whether a business launched in other Asian countries like the Philippines or Thailand can help a business grow the way it would have, in Hong Kong. It is needless to say that Hong Kong would definitely be at the top of the business ecosystem for the decades to come.
