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Why start a business in Hong Kong ? What are the advantages in 2023 ?

Opening a company in Hong Kong is an appealing venture for many entrepreneurs due to its advantageous business environment. But what are the main things to consider ?

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Start a business in Hong Kong is an appealing venture for many entrepreneurs due to its advantageous business environment. Hong Kong boasts robust infrastructure and efficient access to many global markets, making it an ideal location for businesses to expand outside of their home country. The city is also the world’s freest economy with low tax rates, and investors are drawn by the strong legal protections available. Furthermore, Hong Kong has a highly educated workforce that speaks a wide variety of languages, providing an advantage over competing cities when it comes to recruiting quality personnel. With these factors taken into account, as well as other benefits such as proximity to China and positive exchange rates on the HKD (Hong Kong Dollar), there is no surprise why so many foreign companies are opting to open offices in this vibrant global financial center.

start a business in hong kong

Hong Kong Strategic Location

Hong Kong is one of the most strategically located cities in Asia for doing business due to its proximity to the world’s largest economies such as China and Japan. These two major markets present incredible opportunities for expansion with high demand for products on both sides of their borders. Furthermore, the city has become a major gateway for business activities between China and other countries in the ASEAN region.

The city is well connected through air, land, and sea transportation links making it easy for businesses to move goods throughout the region.

As a matter of fact, Hong Kong presents a unique opportunity to businesses seeking access to the lucrative Chinese market, without necessarily incorporating in China. With CEPA (Closer Economic Partnership Arrangement) free trade agreement providing preferential tariff-free entry for goods originating from Hong Kong into mainland China, it is an attractive option for companies looking to extend their reach beyond local boundaries.

Less limitation for foreign investors and fast company incorporation

Hong Kong offers a unique dynamics for foreign entrepreneurs and business owners – one of openness, flexibility, and trustworthiness. As opposed to mainland China which limits foreigners’ options when building their enterprise with only three company structures that limit operations; Hong Kong provides international businesses the opportunity to run smoothly under comfortable conditions familiar from home countries.

Furthermore, many of the traditional bureaucratic hindrances have been removed from the incorporation process making it a fast and straightforward procedure to set up a business in Hong Kong.

Competitive taxation system

Hong Kong is one of the most tax-friendly jurisdictions in Asia. It has a low and simple taxation system with no capital gains, dividend or estate taxes in place. Additionally, businesses are expected to pay just 8.25% on net income which makes it a highly attractive business destination for entrepreneurs setting up shop. Moreover, the city is well-known for its numerous tax incentives which could help businesses reduce their corporate tax rate even further.

To ensure workers’ security in the long term, employers are legally obligated to contribute a minimum of 3% of each employee’s salary towards a pension plan, with employees providing an additional 5%. These requirements can be increased based on the provisions of an employment contract, however they cannot be decreased. This system makes Hong Kong a great place to work, as it provides employees with peace of mind when it comes to retirement savings and planning for their financial future.

Thriving economy

Hong Kong is home to a booming economy and constantly voted as one of the world’s most competitive locations for doing business. This city is well known for its vibrant financial services sector, but also has an impressive manufacturing base, robust tourism industry, and a growing technology sector making it attractive to entrepreneurs from all over the world.

This is due, in part, to its advanced infrastructure and efficient legal system which facilitates trade and commerce. The government also provides a wide range of support services for businesses, including advice on setting up and running a business, access to financing options, and various tax incentives.

Clear legal system

Hong Kong has a well-regulated legal system that provides businesses with the necessary protection to operate smoothly. The city’s laws are based on a combination of traditional English common law and Chinese customary law, thereby providing companies a stable and secure regulatory environment. Moreover, businesses can have confidence in their reliance on contractual obligations as the Hong Kong court system is known for its enforcement of agreements and upholding of justice. This provides a solid and reliable legal framework for businesses to operate without fear of unexpected surprises.

Top-tier infrastructures

With a vibrant economy and ever-growing demands, Hong Kong stands at the helm of infrastructure development, providing companies with access to modern transportation networks, reliable telecommunications systems, and advanced banking services.

Boasting one of the best airports and busiest ports on Earth; transport services within its confines are nothing short of remarkable – allowing for efficient handling and movement both inbound as well outbound goods with ease. Business parks such as Cyberport & Science Park enhance this capability even further by offering seamlessly integrated facilities that facilitate quick access to major locales from any point inside or outside Hong Kong’s boundaries.

This allows businesses of all sizes to benefit from the efficiency of a well-organised city, giving them the opportunity to focus their energy on growing their business. Additionally, it is well connected to international markets, making it a great place to do business on an international scale.

Conclusion

Hong Kong offers businesses a wide range of advantages, from its low and simple taxation system to its well-regulated legal system and efficient infrastructure. It is also renowned for its numerous tax incentives, providing further value for entrepreneurs setting up shop in the city.

Overall, Hong Kong is an attractive destination for foreign investors looking to set up a business. It is no wonder why so many companies choose to launch their operations in this city. With its competitive advantages, Hong Kong is likely to remain a popular choice for entrepreneurs and businesses alike.

Why start a busness in Hong Kong
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