Why set up company in Hong Kong- Story Three

No tax – for Royalty income 

Background

1. Mr. Lin owns intellectual property or technology that can be licensed to other company for commercial use.

The arrangement

1. Mr. Lin setup Hong Kong company H Ltd, and register H Ltd as the owner of the intellectual property (IP);
2. H Ltd licensed use of the IP to a USA company for production use;
3. H Ltd received royalty income base on the use of the IP in Other country.

Benefit

1. The royalty income received by Hong long Ltd is not subject to Hong Kong profits tax;

      2. Such income will be taxable if the use of IP is located in Hong Kong.