Miscellaneous Tax Info

The Advantages of Using Hong Kong Limited Company in Corporate Development Hong Kong is a unique and sensible choice for those international groups wishing to establish a regional base in Asia, taking advantage of its financial infrastructure and strategic locationbeing in the heart of Asia and doorstep of China. The advantages of using Hong Kong limited as a jurisdiction for holding companies are as follows Taxation System Hong Kong Limited adopts one of the most pro-commerce tax systems in the world. Corporations are required to pay only 17.5%1 profits tax on their profits.

There is no restriction on the loss being carried forward. There is no value added tax, capital gains tax or sales tax. In addition, there is no withholding tax on dividend and interest. Hong Kong adopts a taxation system based on the territorial principle. Only profits which arise in or derived from Hong Kong limited are subject to tax in Hong Kong. Income from outside Hong Kong is not subject to any form of taxation.

There is no restriction from capital inflow into or outflow from Hong Kong Limited. Except for the double taxation arrangement signed with China, and a double taxation agreement with Belgium and Thailand, there is no other double taxation agreement signed3. Hence the concepts of resident and domicile, although not alien, are only applicable and considered in very limited circumstances4. Dividends from overseas subsidiaries are not taxed in Hong Kong since they are not sourced in Hong Kong limited.