28 Oct Why Is Hong Kong Such A Popular Business Destination
There are many reasons as to why Hong Kong remains a popular business destination and one of them is the relative ease of hongkong company formation. However, that is only scratching the surface – the real reasons lie deeper. The taxation regime in Hong Kong is one of the best in the world. For example, all the profit that you make over here will not be subjected to tax. Among the part that is liable to be taxed only 16.5% of the amount needs to be paid as tax. May be, this rate can change but even then you will be notified of the same by concerned authorities.
Positive Image as a Business Destination
Hong Kong offers tax benefits but it is in no way, shape, or form a tax shelter as some may have you believe. This is the reason why the companies based in Hong Kong are not thought of as offshore tax havens. In an article that had been published during May 2009 the-then Director of Centre for Tax Policy and Administration, OECD (Organisation for Economic Co-operation and Development), had praised Hong Kong for the efforts it had taken in order to be compliant with global standards pertaining to exchange of information and transparency in the domain of tax.
As far as OECD criteria are concerned Hong Kong is not a tax haven and that says a lot about the country. In a report published in September that year Hong Kong’s status as a tax compliant region was vindicated yet again by OECD and also praised its efforts to adhere to international standards in such issues. This is the reason why companies in Hong Kong are normally respected around the world and they do not make any suspicious dealings.
Hong Kong is located strategically from a business point of view. It is situated right at the tip of China which makes it a sort of gateway to the huge market over there. It is quite easy to get across to mainland China from Hong Kong. The same can be said of the other important markets in Asia that are located close by. Majority of the top cities in Asia are within a distance of four hours by flight from Hong Kong. For any company looking to make it big in this market this is too big an opportunity to pass up.
Yet another factor that works in the favour of Hong Kong as a business destination is the free nature of its economy. In fact, it is regarded as the freest economy in the world. For 15 straight years Hong Kong has been ranked as such.Here, there are no restrictions on business and you can carry on without having to worry about the government intervening in your business. Thanks to the economic policies over here, there are no limits on the amount of capital inflow and outflow that can take place here. The laws also allow foreign entities to fully own companies over here.