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How to Setup a Tax-Free Company in Hong Kong
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Hong Kong holds a strong global reputation as a leading jurisdiction for company registration and business expansion, particularly for high-net-worth individuals (HNWIs) and international entrepreneurs. In 2024, over 145,053 new local companies were registered, bringing the total number of registered Hong Kong companies to over 1.4 million, and the number continues to grow.
While this may seem like a crowded market, the business setup process remains highly accessible and efficient. So why, how, and most importantly, where to start when establishing a new business in Hong Kong.
Why Set Up a Company in Hong Kong
Hong Kong’s regulatory environment is transparent and business-friendly, making it one of the most attractive destinations for entrepreneurs. The city has a low tax burden, streamlined incorporation procedures, and a world-class infrastructure that supports growth across industries.
Businesses benefit from Hong Kong’s proximity to Mainland China, offering access to one of the largest markets in the world. At the same time, Hong Kong operates under a common law legal system, ensuring strong investor protections and an independent judiciary.
The Key Industries for Foreign Entrepreneurs
Financial Services
Hong Kong is a top financial hub, with over 70 of the world’s top 100 banks headquartered there.
Technology and Innovation
Hong Kong has strong government initiatives supporting fintech, AI, and blockchain.
Trade and Logistics
Hong Kong has a free port status and efficient international trade and logistics customs procedures.
Professional Services
Hong Kong has highly developed legal, accounting, and consulting sectors
Real Estate and Investment
Hong Kong has a vast real estate market for investments, perfect for long-term growth opportunities.
Hong Kong Offshore Company Registration
Choose Your Business Structure
Most entrepreneurs choose a private limited company, offering limited liability and a separate legal identity. Sole proprietorships and partnerships are also available but come with personal liability risks.
Register Your Business Name
Your company name must be unique and follow Hong Kong’s business naming regulations. A name search can confirm availability before registration.
Submit Incorporation Documents
The necessary documents include the Incorporation Form (NNC1), Articles of Association, and details of shareholders and directors.
Obtain a Business Registration Certificate
All businesses must secure a Business Registration Certificate from the Inland Revenue Department within one month of operations.
Open a Business Bank Account
A corporate bank account is essential for managing company finances. Banks will require a minimum deposit contribution.
Apply for Licenses and Permits
Some industries, such as finance, healthcare, and import/export, require additional licenses. The Hong Kong Business License Information Service provides guidance on obtaining the necessary approvals.
Hong Kong Tax System and Territorial Taxation
What Is Territorial Taxation?
Hong Kong operates on a territorial tax system, meaning that only income sourced within Hong Kong is subject to taxation. Profits earned from overseas business activities are generally not taxed, making it an attractive jurisdiction for international businesses.
Key Tax Rates in Hong Kong
Profits Tax:
- Corporations: 8.25% on the first HK$2 million of profits, 16.5% on profits above that amount.
- Unincorporated businesses (partnerships & sole proprietorships): 7.5% on the first HK$2 million, 15% thereafter.
Salaries Tax: Capped at 15%.
Property Tax: Flat rate of 15% on rental income.
Taxes Hong Kong Does Not Impose
- No sales tax or VAT
- No withholding tax
- No capital gains tax
- No tax on dividends
- No estate tax
Free Trade Port
One of Hong Kong’s biggest advantages is its free trade policy. The city’s free port status means there are no tariffs on imports or exports, allowing businesses to operate with minimal trade restrictions. Easy customs procedures and a strategic location further enhance its reputation as a global trading hub, making it easier for companies to import, export, and distribute goods efficiently.
Offshore Tax Exemption
Offshore tax exemption in Hong Kong allows businesses to legally exclude foreign-sourced income from taxation. To qualify:
The company must demonstrate that profits were earned from business activities conducted entirely outside of Hong Kong.
Proper documentation, such as contracts, invoices, and operational records, must support the claim.
The company should have no significant business operations or decision-making processes occurring in Hong Kong.
Each case is subject to review by the IRD, which assesses the nature of the transactions and the location where profits are generated.
Benefits of Setting Up a Company in Hong Kong
Low & Simple Tax System(h3)
One of the lowest corporate tax rates globally (8.25% on the first HK$2 million, 16.5% beyond), with no VAT, no capital gains tax, and no tax on dividends.
Fast & Efficient Incorporation
Company registration can be completed in 1-2 days, with minimal bureaucracy and digital filing options.
100% Foreign Ownership
There are no restrictions on foreign ownership, allowing entrepreneurs to have full control over their businesses.
High-Level Financial & Banking Infrastructure
Access to global banking services, multi-currency accounts, and robust financial institutions.
Business-Friendly Immigration Policies
Various investment and work visa options, such as the Investment as Entrepreneurs scheme and Top Talent Pass Scheme (TTPS), make locating easier.
Strategic Location & Free Trade Port
Hong Kong offers zero import/export tariffs and streamlined trade operations.
Banking for Companies in Hong Kong
Banking is an essential factor when setting up a company in Hong Kong, as it plays a critical role in business operations, transactions, and global expansion. Hong Kong banks offer a wide range of financial services, including multi-currency accounts, trade financing, and international payments, making them ideal for companies operating across borders.
Best Banks for Business Accounts in Hong Kong
HSBC Hong Kong– Best for large-scale businesses and international trade.
Offers multi-currency corporate accounts with HKD, USD, EUR, and RMB options.
Provides trade finance solutions, including letters of credit and supply chain financing.
Global banking connectivity for businesses expanding across different markets.
DBS Hong Kong– Best for startups, tech firms, and SMEs.
Fast-tracked online account opening with lower initial deposit requirements.
Strong digital banking ecosystem with real-time FX conversion and cash management tools.
Specialized financing solutions for early-stage companies and venture-backed businesses.
DBS Hong Kong– Best for digital-first and crypto-friendly businesses.
Fully remote account opening with low fees and quick verification.
Supports crypto-to-fiat transactions and works with licensed crypto businesses.
No physical branch visits required, making it an efficient choice for overseas business owners.
Crypto Banking in Hong Kong
Hong Kong has clear regulations for crypto businesses, making it one of the few jurisdictions where digital assets and traditional banking can work together.
Licensed Crypto Exchanges
Businesses handling crypto must register with the Securities and Futures Commission (SFC) to ensure compliance with AML/KYC laws.
Crypto-Friendly Banks
ZA Bank and DBS allow business accounts with crypto transaction support, providing digital asset firms with fiat-to-crypto conversions and banking services.
Corporate Crypto Accounts
Some licensed financial service providers offer crypto custody, stablecoin settlements, and blockchain-based payment solutions for companies.
For businesses setting up in Hong Kong, choosing the right banking partner is crucial for smooth operations. From multi-currency accounts to crypto-friendly banking, understanding the options available can make a significant difference. Learn more in our detailed guide:Banking in Hong Kong: Everything You Need to Know in 2025.
Maximizing Business Potential with a Hong Kong Company
Hong Kong company setup can be a very powerful tool for reaching the Asian market and beyond. With this, access to international banking, low taxes, and a prime trade location is guaranteed. As the city operates under a territorial tax system, businesses can legally optimize profits, while its stable regulatory framework ensures credibility and long-term growth.
For companies navigating corporate banking, compliance, and expansion, it’s more than just incorporation, choosing the right financial partners and structuring operations efficiently is key. From leveraging multi-currency business accounts to accessing crypto-friendly banking or ensuring full regulatory compliance, entrepreneurs can thrive in Hong Kong and further enhance success with the guidance of experts in the field.
How Wealth Consulting Can Assist
Navigating the company setup, banking, and compliance landscape in Hong Kong can be complex. Our team provides specialized guidance to ensure a smooth and efficient process, helping you establish and grow your business seamlessly.
Personalized Business Assessment – Analyzing your business structure, operational needs, and financial goals to recommend the best company setup and banking solutions.
Company Registration & Documentation
- Assisting with business incorporation, ensuring compliance with the Companies Registry and Inland Revenue Department.
Corporate Bank Account Opening
– Helping you choose the right bank and prepare the necessary documents to streamline the account opening process.
Regulatory Compliance & Licensing
– Advising on required business licenses, AML/KYC compliance, and offshore tax structuring where applicable.
Financial & Tax Planning
– Offering strategies on tax efficiency, asset protection, and profit repatriation within Hong Kong’s territorial tax system.
Ongoing Business Support
– Providing continuous assistance post-setup, including compliance updates, accounting solutions, and expansion strategies.
With our expertise, you can confidently establish your Hong Kong company, access world-class banking, and benefit from the city’s pro-business policies and global financial network.