Incorporating Your Company in Hong Kong: Pros and Cons

by Business Published on: 12 October 2020 Last Updated on: 13 October 2020

Strategically positioned in the heart of Asia, Hong Kong has become a revered business city and financial hub. This is why the first offshore destination for entrepreneurs looking forward to growing their businesses offshore is, in most cases, Hong Kong. So, should you also expand your operations to Hong Kong? Here are the main pros and cons of company incorporation in Hong Kong.

Here are Incorporating Your Company in Hong Kong: Pros and Cons:


  • Tax Advantage

One of the reasons entrepreneurs take their operations offshore is to try and cut operating costs. Well, in business terms, this is pretty simple – you cut the cost of production to optimize profitability. Hong Kong can help you to keep business costs low because of its subtle tax regime.

First, a Hong Kong-registered company is legally tax-exempt for all operations that are done outside the jurisdiction. This implies that if most of your operations are based outside Hong Kong, it is possible to qualify for zero tax. Furthermore, Hong Kong does not levy taxes on interests, dividends, or capital gains earned by individuals.

  • A Supportive Administration

One question that entrepreneurs always ask is, “Why do businesses in Hong Kong always prosper?” The answer is because of the supportive administration. Because Hong Kong is an island with little land to practice agriculture or mining activities, its administration opted for a business-based economy.

Hong Kong administration has installed policies that are aimed at helping businesses to become successful. For example, they have a number of programs, such as the Cyberport Incubation Program (CIP), that help startups develop their ideas and transform them into profitable ventures. So, if you have unique business ideas, especially those based on technology, Hong Kong might be the best jurisdiction.

  • Registering a Company in Hong Kong is Pretty Easy

According to the Heritage Foundation and World Bank, Hong Kong is one of the freest economies on the globe. One of the things that reflect this freedom is the ease of registering businesses. Unlike many countries out there that have complicated business registration procedures, Hong Kong is different. You can easily find all the requirements for company registration in Hong Kong in the Companies Ordinance.

The process is simplified further because the Companies Ordinance allows agencies to register companies on behalf of their clients. This makes the process so simple because an agency can help you prepare all the required documents, such as Articles of Association, and submit them to the Companies Registry. And now, onto the best part, you do not have to fly to Hong Kong to get your company registered.


The main disadvantage of opening a company in Hong Kong is that you will be required to travel there to open a bank account. However, this is crucial in avoiding fraud and protecting your money. Besides, the bank account is a very sensitive item, and banks are required to strictly follow know-your-customer protocols. Remember that the bank account will come in handy when it comes to balancing your books and filing tax returns at the end of every financial year.

If you want to expand your company, Hong Kong is a business paradise that will never disappoint. It has world-class infrastructure systems, a supportive regime, and acts as the gateway to Mainland China. So, make sure to identify a professional agency to hold your hand not just during registration, but also during the early period of joining the new market.

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Ariana Smith is a blogger who loves to write about anything that is related to business and marketing, She also has interest in entrepreneurship & Digital marketing world including social media & advertising.

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