Geography

Strategic Location - Hong Kong is geographically located at the southern part of China with the renowned deepwater harbours, with its total area of about 1 107 square kilometres covering Hong Kong Island, Kowloon and the New Territories and numerous small islands. It locates in the middle of the Asia-Pacific region and requires less than 10 hours of air travelling to other major cities in the region.

Population

The population in Hong Kong reached approximately 7.39 million.

Language

Official: English and Chinese
Dialect: Cantonese native language

Economic system

World's Freest Economy - Hong Kong follows free trade policy with no tariffs on importation or exportation of goods. With the high degree of entry and exit and no restrictions on investments inward or outward, it increases the competitiveness in world’s market.

Gateway to Mainland China - he Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) promotes easier access to China markets for Hong Kong made-products, and also reduced tariffs or even imposed zero import tariffs for exports from Hong Kong to China. With the zero import tariffs, therefore, Hong Kong becomes the key gateway to the China which attracts foreign investors to have partnered with Hong Kong companies to manage their businesses in the China. It is the world's 7th largest trading economy, with the mainland of 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 and ranked 3rd in the world - Hong Kong has a mature and active foreign exchange market links with financial centres overseas enable foreign exchange dealing to continue 24 hours a day around the world. The stock market is one of the world’s largest in terms of market capitalization and is also the third largest stock market in Asia.

Tax system

Low and simple taxation system - The current profits tax rate for corporations and unincorporated businesses are 16.5% and 15% respectively. Salaries tax payable for individual is calculated at progressive rates (from 2% to 17% in maximum currently) on your net chargeable income or at standard rate (currently at 15%) on your net income (before deduction of the allowances), whichever is lower. The Inland Revenue (Amendment) (No. 3) Ordinance 2018 was enacted on 29 March 2018. The amendment ordinance has introduced two-tiered profits tax rates for corporations and unincorporated businesses by lowering the tax rate by 50% for the first $2 million of assessable profits with effect from the year of assessment 2018/19, that is 8.25% and 7.5% respectively. However, for two or more connected entities, only one of them may elect the two-tiered profits tax rates.

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 on the basis of 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 and withholding tax on dividends.

In the beginning of 2010, Hong Kong is actively seeking to build its Comprehensive Agreements For The Avoidance Of Double Taxation (“CDTAs”) networks and currently Hong Kong have concluded the Agreements with over 40 countries over the world. For details please visit to www.ird.gov.hk/eng/tax/dta_inc.htm