Hong Kong company Advantages

Hong Kong taxes are among the lowest in the world, and the tax regime is simple and predictable. Profits tax payable by local and foreign companies is equally low 17.5 percent. The actual tax bill is even less after various deductions and depreciation allowances.

There is no capital gains tax in Hong Kong. Furthermore, there is no withholding tax on dividends and interest and no collection of social security benefit.

Salaries tax is also very low using a progressive tax rate imposed on all salary income of individuals derived in or from Hong Kong. The salaries tax is demanded on a yearly basis and can be paid in two installments, usually between December and March.

The property tax applies to owners of land or buildings situated in Hong Kong. Again this is low 16 percent (for 2004/5) of the rental income from the land or buildings and an allowance of 20 percent is permitted for repairs and maintenance.

There is no sales tax or VAT in Hong Kong. The limited tax base, combined with exceptionally low tax rates, makes Hong Kong's tax incidence much lower than in virtually all other developed economies.