Hong Kong is located in the southern coastal area of China with a total area of under 1,100 square kilometers. It covers Hong Kong Island, the Kowloon peninsula and the New Territories including over 200 outlying islands. Hong Kong has no natural resources but a deep-water harbour with a population about 6.8 million. Hong Kong is an excellent place to set up a business for its simple and low tax rate and enter the China market.
Hong Kong is well known for simple tax system and low tax rate. There are only three types of income tax on which taxes are levied.
- Profits Tax
- Salaries Tax
- Property Tax
Hong Kong adopts a territorial source principle of taxation. Only profits that have a source in Hong Kong are taxable here. Profits sources elsewhere are not subject to Hong Kong Profits Tax. The standard tax rate is 17.5% for corporations and 16% for other businesses that relatively low compared with other developed countries.
Unlike most other countries such as Australia and UK, Hong Kong does not impose a capital gains tax. Besides, dividend income is also exempt from profits tax.
| Tax Basis | According to accounting profits and subject to adjustments under the tax code |
|---|---|
| Profit Tax Rate | (1) Normal rate (for the year of assessment 2003/04) - Corporations : 17.50% - Unincorporated Businesses : 15.50% (2)Normal rate (for the year of assessment 2004/05) - Corporations : 17.50% - Unincorporated Businesses : 16.00% |
| Losses | Losses can carry forward subject to restrictions |
| Capital Gains | Not taxable |
| Dividends income | Not taxable |
The HKSAR government imposes no regulations in restricting foreign investment in Hong Kong and profits can be remitting to overseas at any time. The currency Hong Kong dollar has been pegged to the US dollar at the rate of HK$ 7.8 to US$1.00 since 1983.
Hong Kong is a global banking center with over 150 licensed banks available in the market.
Banks are independent of the HKSAR Government and foreign banks are free to operate with only limited restrictions. Companies can establish their business without restrictions in Hong Kong and protected by Hong Kong legal structure.
Hong Kong is located in the southern coastal area of China and closed with Shenzhen and Macau.
There are many people commute daily across the boundary by train which needs one or two hour.It takes around 3 hours to fly from Hong Kong to Beijing and 2 hours to Shanghai.
Hong Kong is a duty-free port except taxes applying to several domestic consumption such as motor vehicles, tobacco, alcoholic beverages, methyl alcohol and hydrocarbon oil. Hong Kong also levies no customs tariff.
Copyright © SUNG SIM SERVICES LIMITED. All rights reserved.
