Hong Kong has a lot to offer as a choice for offshore company formation, it has a strong, open business environment which attracts top global companies. It is an ideal location for firms who wish to do business in the Asian economies, it has high class infrastructure, well developed capital markets, a highly educated work force and an attractive tax regime.
Despite all this and a budget surplus Hong Kong is still taking measures to attract more investment by improving on its company ordinance and reducing taxes.
A comprehensive rewrite of the company law was initiated in 2006 and on the 12 July 2012 the Companies Bill was eventually passed by the Hong Kong Legislative Council with the new subsidiary legislation expected to be brought into operation in 2014. The four main objectives of this new legislation are to enhance corporate governance, ensure better regulation, facilitate business and modernise the law.
In a recent budget announcement by the Asian business Hub, small and medium sized businesses will get a break on their corporate income tax rates this year.
Business registration fees will be waived for 2013-2014 for SME’s and corporate profit taxes will be reduced by 75%, up to HK$10,000. The government is also proposing to broaden the profits tax exemption for offshore funds. This exemption will now include transactions in private companies that are now incorporated or registered in Hong Kong as long as they do not hold any Hong Kong properties or do business in the city. The government will also be implementing a 50% profits tax reduction on offshore business transactions of captive insurance companies.
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