Setting Up Business in Hong Kong

Being both the gateway to South China and the sea-routes nexus of Asia and the world, Hong Kong enjoys its unique geographic advantage. As an international finance and business centre, Hong Kong has been elected as the freest trade district for consecutive ten years, by Forbes. Against the backdrop of economic globalization, Hong Kong has become the springboard for Chinese investors to the outside world and vice versa.

Business Environment

Being the centre of Asia, Hong Kong is also known as the most internationalized city in Asia. It is always a dynamic metropolis known for its cultural mix of east and west. As the freest economy in the world, Hong Kong has a sound legal system, free flow of capital, a simple and clear tax system, low tax rates and complete infrastructure, in short, providing a business environment of fair competition for investors both home and abroad.


As at 1.10.2011, there are 59 Consulates-General, 62 Consulates and 5 Officially Recognised Bodies in Hong Kong.

Legal System

The legal system in Hong Kong is based on common law and is supplemented by the local laws. The legal system of Hong Kong exercises the principle of judicial independence. The law officers are not influenced by the administrative organ of the government or the legislature when performing their duties.

Tax System

  • Income tax: the tax rate is 16.5%, one of the lowest around the world.
  • Duty: All goods are exempt from the duty except for imported cigarettes, wine, hydrocarbon oil and methanol.
  • Salary tax: the tax rate ranges from 2% to 17%, which is one of the lowest around the world.

For more information on corporate taxes, refer to Hong Kong Taxation.

Exchange Control

There are no exchange controls in Hong Kong, and the foreign exchange market is developed with active trading. In addition, Hong Kong is the sixth largest foreign exchange trading centre, with a state-of-art foreign exchange clearing system.

Financial Market

  • Hong Kong is reputed as a major financial centre due to its high market transparency, strict disclosure requirement to financial institutions and prudent supervision.
  • Hong Kong ranks thirdly in the Global Financial Centres Index issued by the City of London in March 2010.
  • As of December 31, 2010, there are 1,244 and 169 companies listed on the Main Board and GEM respectively, with total market capitalization amounted to HK$210,769 trillion.

Banking Services

  • Hong Kong is one of the cities with the most international banks, where some 70 out of top 100 banks have operations in Hong Kong.
  • As of the end of 2010, there are 1960 recognized banking institutions and 70 representative offices in Hong Kong.
  • Hong Kong is the third largest syndicated loan centre in Asia
  • Leveraging on the “Mainland and Hong Kong Closer Economic Partnership Arrangement” (CEPA), the barriers for Hong Kong banks to enter the China market is lowered. Effective from July 2009, Hong Kong banks have been approved to handle RMB settlement for cross-border trading.
  • According to the Supplement VI to CEPA, any foreign bank branch established in the Guangdong province by a Hong Kong bank can apply to establish “cross-location” sub-branches (i.e. different from the municipality where the relevant branch is located) within the Guangdong province, which shall take effect from October 2009.


Hong Kong has an extensive transportation network comprising the airport, railways, highways, container terminals, inland terminal depots and trans-boundary transportations. The complete transportation infrastructures closely connect Hong Kong and mainland China to the world, which contributes to the development of trade and logistics.

Company Incorporation

Most companies in Hong Kong are limited companies, where the shareholders assume the limited liabilities proportionate to their subscribed equities, and the standard capital requirement is 10,000 Hong Kong dollars.

For more information on Company Incorporation, refer to Hong Kong Company Incorporation.


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