Top benefits to start a business in Hong Kong


With very few regulatory restrictions and its reputation for efficiency, Hong Kong maintains the title for the world’s most liberal business economy and is recognized as an ideal destination for entrepreneurs. As of June 2018, over 1,407,743 companies have been registered in Hong Kong. Hong Kong possesses several advantages that attract start-up enthusiasts. Ranking 6th in the World Economic Forum’s Competitiveness Index, Hong Kong solidifies its claim as an esteemed global leader in finance, where businesses and companies can flourish. The following article will focus on the top benefits of incorporating a business in Hong Kong. 


TLDR: Hong Kong serves as a competitive platform in the Asia-Pacific region for many entrepreneurs. Because of Hong Kong’s tax benefits, Ease of Expansion, Ease of doing business, Free market, and favorable policies, it attracts many foreign company registrations and investment. In Hong Kong, companies will also seek help from professionals to handle the business registration, company incorporation and ongoing company maintenance.


Tax Benefits

Hong Kong is renowned for its low tax rate which is favorable for business operations. After 1 April 2018, a two-tier profit tax regime is applied for Hong Kong based companies. For Limited companies, the first HK$2 million of a company’s income will be charged at 8.25% while the remaining at 16.5%. Unlimited companies also have a similar 2 tied tax regime but with a lower tax rate. For unlimited companies, the first HK$2 million income will be charged on 7.5% while the remaining 15%. One important thing to note is that there is no tax imposed on capital gain and shareholder dividends in Hong Kong. These benefits attract people around the globe to register their businesses in Hong Kong. 

Another significant tax benefit is the territorial tax system being practiced in Hong Kong. This means that only income that arises in and is derived from Hong Kong is subject to tax. For Chinese companies, due to the double tax agreement between Hong Kong and China, corporations can enjoy a withholding tax rate on dividends distributed to Hong Kong tax residents reduced to 5% (after fulfilling some specific conditions). This prevents double taxation and promotes the setup of new businesses in both regions.


Ease of Expansion and Proximity to Mainland China

Before Hong Kong became a financial hub, it was famous for its entrepot role. Connecting different Asia countries just requires several hours of flight from Hong Kong. Combined with Hong Kong’s free-market policies, both local and multinational companies do not need to worry about anti-competitive practices. They can freely expand business markets effectively. 

From 24 August 2018, Hong Kong-Zhuhai-Macao Bridge started operating and giving a huge advantage to businesses in the Great Bay Area. With the continuous advancement in the city’s infrastructures, there are more opportunities for collaboration between companies in Hong Kong and China, creating avenues for businesses to enter the China market or expand to the Southeast Asian market.


2 Founder to discuss to start business in Hong Kong


Favorable policies

After the 2017 signing ceremony in Hong Kong, 9 municipalities in Guangdong Province became “the Greater Bay Area” aiming to develop an international innovation hub in different areas such as Innovation and Technology, tourism, and sustainable development. Infrastructures have also been built to foster the connection between different cities in China. China’s government has allocated a significant number of resources to this project in hopes of cultivating the “Silicon Valley of China”. With this initiative, companies can find tremendous opportunities in Hong Kong. 

“Belt and Road Initiative” on the other hand is a strategy initiated by the Chinese government aimed to connect the continent of Asia, Africa, and Europe through transportation networks so as to improve integration, trade, and general economic growth. As part of this scheme, Hong Kong has implemented different measures to contribute to the strategy. For example, Hong Kong has signed free trade agreements with a number of countries to promote international collaboration in trade and commerce.


Great business environment and Productive Workforce

One of the reasons why Hong Kong is known as a business-friendly city in the world is because of the ease of setting up a business here. Comparing Hong Kong with its neighboring countries, registering a business in Hong Kong does not require approval from government officials. You only need to fulfill some basic company registration requirements, like choosing a unique name, acquiring a local address, and filling in registration forms, to complete the whole process. 

The ease of operating a business in Hong Kong is not only limited to the formation process but also related to the business environment. Having one of the best transportation systems across the globe and constantly stable internet access, lays a perfect foundation for business owners to kickstart their ideas and dreams. The Hong Kong government also provides a lot of support to developing entrepreneurship in the city. There are different communities and fundings programs in Hong Kong to support SMEs and small businesses such as the HKSTP Incubation program and TVP for digital transformation.  

Despite having sound foundations, the availability of top notch talent in Hong Kong allows entrepreneurs to execute their business ideas with ease. Having 18-year free education in Hong Kong, the Hong Kong workforce, in general, has a high education level compared to other regions or countries. With advanced comprehension and communication skills, multilingual and international workforces in Hong Kong, you have the best team waiting to drive your business to greater rights.


Free Market

Hong Kong has been renowned for its free market for competition. Without local protection laws such as tariffs or quotas for specific goods, Hong Kong based companies that can provide more value succeed with ease. This is why such a fair competing ground attracts business owners from all over the world. As long as businesses have good products and services, nothing can stop them from thriving in Hong Kong. 

Furthermore, the free flow of capital attracts entrepreneurs too. Some other countries may have a limitation on capital flow which reduces the liquidity for business owners in times of political or economic crisis. The stable banking system and sound legal system in Hong Kong enable multinational companies to freely control their investment capital. Company owners can freely adjust their strategies in managing cash flow.


​​Favorable Immigration Policies and Diverse International Community

As a business-friendly city, Hong Kong has a great immigration policy for entrepreneurs who want long-term development in Hong Kong. Business owners can apply for Investment visas, which is a visa designed for entrepreneurs who desire to stay in Hong Kong to participate in business operations. Hong Kong also offers a dependent visa for your families to stay in Hong Kong. 

As a metropolitan, Hong Kong welcomes entrepreneurs from all over the globe. Being one of the English colonies, Hong Kong uses English as one of the official languages which allows for better business communication. There are many online and offline communities for entrepreneurs to find like-minded fellows to network and build relationships. After all, having great companions makes your journey in Hong Kong more fruitful.


How can FastLane help?

Although it is relatively easy to open a business in Hong Kong, there are still a number of details business owners need to pay attention to. Having thousands of satisfied clients, FastLane helps different businesses with their company formation process. We offer guidance in company setup and registration, company secretary, audit & profit tax filing, working visa, and a registered address service for companies with offshore activities.



We hope this article can bring you more thoughts on why doing business in Hong Kong is a good choice. After all, choosing a suitable battlefield is of utmost importance for business success. You can eliminate unnecessary challenges and difficulties. If you are looking for more information on the steps required to register a business in Hong Kong, check out our e-book for your reference.