Ease of Doing Business Rank: 3
Hong Kong is part of Greater China and consists of 260 territorial islands and peninsulas at the mouth of the Pearl River Delta, east of Macau.
It is an Asian Special Administrative Region of the People’s Republic of China operating with limited autonomy under the doctrine of “one country, two systems“.
Cantonese and English are the official languages of Hong Kong.
Cantonese is the most widely-spoken language (88.9%), followed by English (4.3%), native dialects (3.1 %), and other languages including Mandarin (3.8%).
The 2019 population estimate is 7.5 million.
The greatest number of people lives on the northern part of Hong Kong Island and the Kowloon peninsula, accounting for 3.16 million of the total population.
The top industries in Hong Kong are financial services, tourism, trading and logistics, and professional and producer services.
The Times Higher Education World Rankings ranked three Hong Kong universities in the top 100 in the world. A further three ranked in the top 500.
The Legatum Prosperity Index ranks Hong Kong’s education system 23rd out of 149.
The most common type of business entities in Hong Kong are sole proprietorship, partnership, and limited liability company.
The most common business vehicle in Hong Kong is the limited liability company.
The Hong Kong Science and Technology Park grants up to USD 110,000 to qualifying information and communication technology (“ICT”), electronics, precision engineering, biotech and app ventures.
Cyberport grants are also available for up to USD 42,000 for innovative ideas for development within Hong Kong. Hong Kong is also close to the city of Shenzhen, the “Silicon Valley of Hardware” in China.
Small Medium Enterprises may also benefit from the Export Marketing Fund of the Trade and Industry Department. They encourage trade fairs and business missions outside Hong Kong, and local exhibitions targeting foreign buyers.
Potential deductions include internet promotional activities such as web ads, improving corporate websites to entice foreign markets, and listing products of foreign e-commerce websites. Each company is entitled to 50% reimbursement on expenses incurred up to a maximum of HKD 200,000.
Offshore profits are not taxable in Hong Kong and the area also has double taxation agreements with over thirty countries.
Companies with existing investments in China may also benefit from the Mainland and Hong Kong Closer Economic Partnership Agreement (CEPA). It grants national treatment for over 50 service sectors allowing businesses to expand into the area seamlessly.
Multinational companies with regional headquarters in Hong Kong may also benefit from the new tax rules on Corporate Treasury Centres (CTC). CTC companies are eligible for a tax reduction of half the standard rate of 16.50%.
Central is the main area for business in Hong Kong. It is located on the north shore of Hong Kong Island. It is home to multinational financial services corporations, government and trade authorities.
Hong Kong is a densely populated area and modern architecture dominates the cityscape. The most outstanding place to view the miles of skyscrapers and Victoria Harbour is The Peak – the highest point on Hong Kong Island and the city’s most exclusive neighborhood since colonial times.
Across the harbor you’ll find Tsim Sha Tsui promenade in Kowloon. It features a colonial-era clock tower, the Avenue of Stars, the Hong Kong Cultural Centre, and the Hong Kong Space Museum. It also offers a pristine view of the Hong Kong Island skyline and bustling Victoria Harbour.
Hong Kong also has its own Disneyland, marine theme park, and both a ladies and night market. With miles of shopping, visitors are certain to find bargains.
Hong Kong also offers plenty of restaurants, bars, and nightclubs offering everything from chic wine selections and gourmet meals to gambling dens and disco clubs.
Fortunately, you can escape the hustle and bustle too. Hiking trails, deserted beaches, and tranquil city parks make it simple to get out of the madness. Practice tai chi, play chess, or shoot hoops in one of the many green areas.
Lantau Island offers a Buddhist monastery, sandy beaches, and a giant bronze Buddha statue. Ride a cable car for breathtaking views of mountains, forests, and the coast. Explore your spiritualism at the Ngong Ping Piazza and walk the Wisdom Path. Its 38 wooden steles are adorned with prayers for the Heart Sutra, highly-revered by Confucians, Buddhists and Taoists alike.
The Hong Kong UNESCO Global Geopark showcases the timeless and eerily beautiful landforms of the region and includes a volcano discovery center. Hong Kong also has a marine and wetland park, botanic garden, and nature reserve you can explore.
It is believed that Hong Kong became part of the Chinese empire during the Han dynasty between 206 BC and 220 AD. During this time, Han Chinese settled in the area. The sheltered harbor became a principle stopover for trading ships on the Silk Road during the 7th century.
China also imported spices, plants, and textiles and exported porcelain and tea. Hong Kong’s 260 islands became a well-positioned haven for Chinese pirates.
During the 1500s, Portuguese, Dutch and French traders settled in Macau, neighboring Hong Kong. Later, the British joined in trade. However, China tried to restrict the European influx in the 18th century.
This angered the British and it created a trade imbalance. Europe wanted China’s silk, porcelain, and tea, but foreign trade was restricted to the southern port city of Canton. To counter the imbalance, the British East India Company grew opium in India and smuggled it into China illegally.
Eventually, an imperial edict banned the opium trade due to addiction issues. China seized a British ship laden with opium and Britain attacked in the First Opium War of 1840. Britain dominated China, and in 1841 China ceded Hong Kong to Britain.
In 1860, Britain also took the Kowloon peninsula after a second Opium War. They extended north into the rural New Territories in 1898 and leased the area for 99 years.
The British transformed Hong Kong into a huge commercial and financial hub built around one of the world’s busiest harbors. However, riots in 1967 protesting colonial rule led to social and political reforms and a partially elected legislature and independent judiciary.
Hong Kong grew quickly due to China’s increasingly open economy during the seventies. The city and port became a gateway between eastern and western trade.
In 1984, the future handover of Hong Kong to China was agreed between British and Chinese officials. Hong Kong would become a “Special Administrative Region” of China with all its freedoms and way of life for 50 years after the handover date of July 1, 1997.
In 1997, all lands returned to China. Hong Kong is now part of China, but officially governed independently. The “one country, two systems” has its difficulties, but Hong Kong survived the transition and thrives.
According to the 2016 census, 82.8% of the population practices Chinese folk religion, Buddhism, Taoism or they’re non-religious. A further 11.6% follow Catholicism, 4.1% follow Islam, 1.4% follow Hinduism and 0.2% Sikhism.
The 2016 by-census also indicates 92% of the Hong Kong population is ethnic Chinese, 8% are other non-Chinese ethnic groups.
According to Forbes’ 2019 Best Countries for Business, Hong Kong is the 3rd best country in the world for conducting business.
The 2019 Index of Economic Freedom rates Hong Kong 1st globally, stating “An exceptionally competitive financial and business hub, Hong Kong remains one of the world’s most resilient economies.”
World Bank’s “Doing Business” rankings rate Hong Kong 4th for ease of doing business in the world.
Blueback Global provides a one-stop integrated solution to managing all aspects of your global operations. We can take the burden off you or your company’s internal resources by managing Entity Setup, Local Payroll, Accounting, Tax Reporting, HR Admin and Regulatory Compliance matters associated with operating in a foreign country. Our services are designed to be flexible and customized, so whether you are starting from entity registration, or have already registered but need support in setting payroll or hire employees, we can help at every point of the process.
The common scenarios that may give rise to the need for Blueback Global’s services include the following:
With our integrated approach, you can expect the following experience:
We have an initial complimentary meeting to discuss the scope, objectives and plans for your expansion plan into Hong Kong. After this meeting, you can expect a follow-up proposal from Blueback Global within 1 to 3 business days, that outlines that the approach, scope of work and expected deliverables and outcome. Thereafter, our implementation team will then work closely with your team to register the local entity, set up payroll, accounting process, employee social security, and benefits. We will then develop a mutually agreed timeline and approach for ongoing payroll, accounting, tax reporting and HR support. Blueback Global will set up a compliance calendar so that you know exactly what and when compliance items such as tax reporting and payroll returns are due. We will, of course, facilitate all of these, so you do not have to keep track of the compliance dates.
Our goal is to make the process as smooth, simple and successful as possible, and remove the anxiety of operating in a foreign location, to deliver a great customer experience.