Economy of Hong Kong

Hong Kong is one of the leading international financial centres in the world. Hong Kong has an economy that is service oriented. This service oriented economy of Hong Kong is characterised by the low taxation policy of this Special administrative Region (SAR) area, which is governed by government of China, with a great deal of autonomy provided to Hong Kong.

Hong Kong provides almost free port trade that makes Hong Kong a well established international financial market. Hong Kong Dollar is the currency of Hong Kong. This currency is issued by three major international commercial banks. Hong Kong dollars are pegged to US dollars. The rate of interest is decided by the individual banks in Hong Kong. This makes the Hong Kong Dollars fully market driven.

There is no officially recognised system of having a Central Bank in Hong Kong. The Monetary Authority of Hong Kong serves as the authority for implementing financial regulations in Hong Kong.

Hong Kong has had the highest degree of economic freedom in the world, as per the reports of Index of Economic Freedom and since this index was incepted in the year 1995. The economy of Hong Kong is governed under positive non interventionism.

The economy of Hong Kong is highly dependent on international trade and finance. Hong Kong suffered an economic set back in the year 2009, when the economic growth fell by 2.8%. The Economic Freedom of the World Index listed Hong Kong as the number One nation, in its report in the year 2017, with a score of 8.97, out of a perfect 10.

The economic strategies of Hong Kong include having a sound system of banking, having a strong legal system, and no public debts. Sufficient foreign exchange reserves of US $ 408 billion in mid-2017, speaks for the super strong economy of Hong Kong.

Why form an offshore company in Hong Kong?

Hong Kong follows a different taxation rule wherein only corporation tax is charged at 16.5%. There is no tax on capital gains, shareholder dividends and on foreign sourced income. The other tax that it levies is 15% on unincorporated businesses and 2 to 17 percent on the salaries that is drawn by the employees. Also geographically, it is well connected to Chinese Main land and South East Asia.

Form an Offshore Company in Hong Kong

Benefits of Forming an Offshore Company in Hong Kong

  1. 0% tax on capital gains and inheritance
  2. 0% tax on dividends and interest earned
  3. No tax on company’s trading business activities based outside its region
  4. Double taxation treaties to provide relief on shipping and airline income