Why Hong Kong Is the Best Place for a Holding Company ?

Why Hong Kong Is the Best Place for a Holding Company ?

Selecting the ideal place for a Holding Firm can be a monumental task. The mix of getting a place that allows you to minimize on tax, cut costs, and counter the ever transforming risks can be complicated. Recently, accession of Taiwan and China into World Trade Organization has made the entire market an irresistible attraction. 

Indicators ideal location to set up a holding company

  • Low levels of involved risks and costs
  • Relatively low tax regimes
  • Stable financial system
  • Stable government
  • Supportive administration

Why Hong Kong is the best for your holding company ?

Many companies looking forward to establishing their operations in South East Asia consider Hong Kong as the gateway. Its location and independent operations from Mainland China have enabled the government to work on creating the best business environment for offshore companies. Here are additional benefits of using Holding company tax in Hong Kong.

Great ease of doing business 

When you establish a holding company in Hong Kong, it is like you have registered in two countries by investing in one. After investing in Hong Kong and want to open subsidiaries or trade with Mainland China, you will be given preference to other companies.

To put it in a different way, a foreign investor targeting to enter into China directly will find it very difficult compared to another similar investor entering China through a holding company in Hong Kong. This is a very convenient way to access the huge market that is China.

The process of setting up a company in Hong Kong is very easy 

You only require 14 days to have a company fully set up and ready to start operation. Simply gather the relevant documents including the passports of shareholders, memorandum of associations, physical address, and company secretary details to have the process started immediately at the company registry. The process is very easy such that you can even register the company in absentia with the assistance of an agency.

Straightforward tax system

The tax system in Hong Kong was designed to help businesses grow and expand fast in the region and globally. A company is only required to pay 17.5% tax on profit that is generated in Hong Kong. In fact, with proper structuring of your business, it is possible to qualify for 0% tax payment if the profit is earned elsewhere.

Besides, Hong Kong does not have value added tax, sales tax or capital gains tax. Therefore, you are sure of keeping all the proceeds in dividends from your company. Notably, Hong Kong does not have restrictions on capital flow. You can, therefore, move large sums of money to do business and earn huge profits.

Hong Kong has a very stable regime 

The Hong Kong administration and legal system are anchored on the Common English law that is highly pro-commerce.

The government facilitates the business operations and does not interfere with market forces so that the economy remains vibrant throughout the year. These, together with a robust financial system makes it easy to access funds, run projects, and meet all operational obligations easily.

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