Tax & Incentives
Businesses and individuals in Hong Kong enjoy one of the most tax‐friendly systems in the world . Only three direct taxes are imposed and there are generous allowances and deductions which can reduce your taxable amount.
In addition, the city offers investors a wide range of tax related incentive.
- Profits tax for the first HK$2 million of profits of corporations is 8.25 per cent. Profits above that amount will be subject to the tax rate of 16.5 per cent. For unincorporated business (i.e. partnerships and sole proprietorships), the two‐tiered tax rates will correspondingly be set at 7.5 per cent and 15 per cent.
- Salaries tax with standard rate of 15 per cent
- Property tax of 15 per cent
Profits Tax Exemptions: All privately offered onshore and offshore funds enjoy profits tax exemption for transactions on specified assets, regardless of their structure, size or purpose, so long as they meet the conditions for exemption.
Enhanced Qualifying Debt Instrument (QDI) Tax Exemptions: Hong Kong's profits tax exempts all interest income and trading profits derived from QDIs issued on or after 1 April 2018, regardless of tenor.
ETF Stamp Duty Waiver: Hong Kong waives the stamp duty on the transfer of all ETF shares or units. The exemption provided a further boost to the city’s ETF market, which is already one of the leading markets in the Asia Pacific region.
Here are the taxes which Hong Kong does not impose:
- No sales tax or VAT
- No withholding tax
- No capital gains tax
- No tax on dividends
- No estate tax
Free Trade Port
Another benefit of setting up business in Hong Kong is its free trade policy. The city’s free port status and easy customs procedures make it easier for businesses and companies to operate.