🇭🇰 Hong Kong Company Formation
Territorial taxation — 0% on offshore profits, no VAT, no capital gains tax. The China–global financial bridge with 50 tax treaties and British common law.
Updated April 2026
Onshore CIT
8.25–16.5%
Offshore Profits
0%
Capital Gains
0%
Tax Treaties
50
VAT / GST
None
Tax System
Rates and incentives
| Tax | Rate | Note |
|---|---|---|
| Profits tax — first HKD 2M | 8.25% | Two-tiered system. Reduced rate on first HKD 2M of assessable profits. |
| Profits tax — above HKD 2M | 16.5% | Standard rate on HK-sourced profits exceeding HKD 2M. |
| Offshore profits | 0% | Territorial basis — profits sourced outside HK are not taxable. Formal Offshore Claim required. |
| Capital gains tax | 0% | No general CGT. FSIE regime may apply to MNE entities on foreign-sourced disposal gains. |
| Withholding — dividends | 0% | No WHT on dividends paid to residents or non-residents. |
| Patent Box — qualifying IP | 5% | Concessionary rate on qualifying patent income. Enacted 2024. |
Why Hong Kong
Key advantages
Territorial taxation — 0% on offshore profits
Only HK-sourced profits are taxed. Offshore Claim provides formal IRD confirmation of 0% tax status for genuinely offshore operations.
No VAT, no GST, no capital gains tax
Simplifies international invoicing and eliminates tax on investment gains. One of the leanest tax systems in the world.
China–global financial bridge
Unique CEPA access to Mainland China, Renminbi clearing hub, and gateway for cross-border trade between Asia and Western markets.
50 double tax treaties and participation exemption
DTA network covering China, Japan, UK, France, Singapore, India, and UAE. FSIE participation exemption eliminates tax on qualifying dividends from 5%+ holdings.
British common law with independent judiciary
Common law system inherited from British colonial rule. Familiar and trusted by international investors, counterparties, and courts worldwide.
What We Build
Full scope of implementation
- ✓Hong Kong Limited Company registration — fully remote, no visit required
- ✓Local company secretary provision — mandatory by law, we provide
- ✓Offshore Claim preparation, supporting documentation, and IRD filing
- ✓Corporate bank account — full KYC file for traditional and digital banks
- ✓Annual return, profits tax return, and statutory audit coordination
- ✓FSIE compliance documentation for MNE entities
- ✓Transfer pricing documentation for intragroup transactions
Who This Is For
Ideal client profiles
2025 – 2026
What has changed
⚠ FSIE regime — expanded scope from January 2024
Foreign-sourced passive income received in HK by MNE entities is now taxable unless substance, participation, or nexus tests are met. Affects pure passive holding structures without HK employees.
Patent Box regime enacted — 5% concessionary rate
Qualifying patent income taxed at 5%. OECD-compliant modified nexus approach. Available for patents and copyright-protected software.
Pillar Two — Hong Kong Minimum Top-up Tax implemented
15% global minimum tax for MNE groups with consolidated revenue above EUR 750M. Mid-market structures below the threshold are unaffected.
Common Questions
FAQ
Is offshore income still tax-free in Hong Kong?
For non-MNE entities (private companies, family businesses), yes — the territorial system is unchanged. For MNE entities, the FSIE regime from 2023 requires economic substance or participation exemption conditions to be met for foreign-sourced passive income. Active trading income with genuine offshore source remains exempt.
What is the Offshore Claim and how does it work?
The Offshore Claim is a formal submission to the Inland Revenue Department demonstrating that profits are sourced outside Hong Kong — contracts negotiated abroad, goods/services procured and delivered outside HK, and key decisions made outside HK. IRD reviews evidence and confirms 0% tax treatment.
Do I need to visit Hong Kong to set up a company?
No. Company formation is fully remote. However, most traditional banks (HSBC, Standard Chartered) require an in-person visit for corporate account opening. Digital alternatives like Airwallex offer fully remote onboarding in 2–5 days.
Is an annual audit mandatory?
Yes — every Hong Kong company must have its financial statements audited annually regardless of size or activity. Audited accounts are submitted to the Companies Registry and IRD with the profits tax return.