Geography

Hong Kong is situated in the southern part of China, featuring renowned deepwater harbours and standing as one of the major cities in the Greater Bay Area. Spanning approximately 1,107 square kilometres, it encompasses Hong Kong Island, Kowloon, the New Territories, and numerous small islands. Positioned centrally in the Asia-Pacific region, it is within a 10-hour flight to other major cities in the area.

Population

The population in Hong Kong has reached approximately 7.54 million by the end of 2023.

Language

Biliteracy: Chinese and English
Trilingualism: Cantonese, English, and Mandarin

Economic system

World's Freest Economy - Hong Kong follows a free trade policy with no tariffs on importing or exporting goods. With a high degree of entry and exit and no restrictions on investments inward or outward, Hong Kong is highly competitive in the world’s market.

Gateway to Mainland China - the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) promotes easier access to China markets for Hong Kong made-products, and also reduces tariffs or even imposes zero import tariffs for exports from Hong Kong to China. With the zero import tariffs, therefore, Hong Kong becomes the key gateway to China which attracts foreign investors to have partnered with Hong Kong companies to manage their businesses in China. It is the world's 10th largest trading economy in 2023, with mainland China as its most significant trading partner. Hong Kong is also a major service economy, with particularly strong links to mainland China and the rest of the Asia-Pacific region.

Hong Kong is Asia’s top financial city - Hong Kong remains a prominent global financial center, ranking fourth in the latest International Financial Centres and continues to have a mature and active foreign exchange market, facilitating 24-hour global trading. Hong Kong Stock Exchange is still one of the world’s largest by market capitalization and remains a key player in Asia.

Tax system

Low and simple taxation system – Since 2018, Hong Kong has introduced two-tiered profit tax rates. For corporations and unincorporated businesses, the profit tax rates are 8.25% and 7.5% respectively for profits up to $2,000,000, and 16.5% and 15% respectively for profits over $2,000,000. However, for two or more connected entities, only one of them may elect the two-tiered profits tax rates. Salaries tax payable for individuals is calculated at progressive rates (from 2% to 17% at maximum currently) on your net chargeable income or at the standard rate (currently at 15%) on your net income (before deduction of the allowances), whichever is lower.

Taxes are charged in Hong Kong on income or profits that are regarded as having a Hong Kong source (referred to as the "Territorial Source Principle") rather than based on residence. There is no distinction made between residents and non-residents. A resident may therefore derive profits from abroad without suffering tax; conversely, a non-resident may suffer tax on profits arising in Hong Kong.

Direct tax in Hong Kong includes profits tax, salaries tax and property tax. Indirect tax in Hong Kong includes stamp duty, which is payable in respect of certain kinds of documents primarily relating to the sale or lease of immovable property in Hong Kong and the transfer of Hong Kong stock. There is no value-added tax (VAT), capital gains tax or withholding tax on dividends.

Hong Kong is actively seeking to build its Comprehensive Agreements For The Avoidance Of Double Taxation (“CDTAs”) networks and currently Hong Kong has concluded Agreements with over 50 countries all over the world. For details, please visit www.ird.gov.hk/eng/tax/dta_inc.htm