How to set up a holding account in Hong Kong – that will be the title of this article.
Nothing written here should be considered as any form of financial advice.
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Introduction
A former British colony until 1997 when it was returned to China, this dynamic city has a unique history. The local culture is a mixture of British heritage and Chinese roots, reflected in architecture, street names, afternoon tea and double-decker trams.
Today Hong Kong is not a city or a country, but a special administrative region of the PRC. According to the principle of “one country, two systems” developed by China for Hong Kong and Macau, Hong Kong has broad autonomy in most areas – it has its own legal and tax systems, economy, migration regime, currency and much more.
China is only responsible for defense and foreign policy. According to this principle, Hong Kong will exist until 2047, after which it will become part of the PRC, but under special conditions. However, already now, every year China’s influence on Hong Kong is increasing.
But still, Hong Kong is very different from China. Locals don’t like being called Chinese. Even the Chinese language is different here – in China they speak Mandarin, and in Hong Kong they speak Cantonese. In China, few people understand English, and in Hong Kong it is the second official language. Also in Hong Kong, unlike China, all messengers, social networks and Google work, and any application can be downloaded in two languages - Chinese or English.
Thus, Hong Kong is a mixture of East and West, an Asian metropolis with an international character. Everyone will find something of their own here. In this article, we have collected the main pros and cons of living in Hong Kong, which will be useful for those who are thinking about moving to this metropolis.
The pros of living in Hong Kong
Well-developed transport system
The public transportation system in Hong Kong is very efficient and convenient – most places can be reached by metro. Some of the finished areas can be reached by buses. There are also trams, ferries, taxis and trains. Taxis are relatively inexpensive, especially when compared to Tokyo or even some cities in Western Europe. Apps like Uber also work.
The metro and buses run frequently, so you won’t see people running after the bus because the next one will arrive in a couple of minutes.
Varied food
Hong Kong has a wide variety of restaurants offering a wide variety of food, from inexpensive and delicious street food to Michelin-starred restaurants. According to statistics, there is one restaurant for 600 people. Tourists and locals alike line up to sample the world’s famous dim sum, mouth-watering brisket noodles, delicious egg tarts and pineapple buns. Even true gourmets will not lack new places with delicious food here.
Convenient regional travel
Hong Kong Airport is a major transit hub from which you can get to almost any corner of the world. So it is very convenient and easy to travel from here, for example, to China, Thailand, Vietnam, Korea, Japan, etc. Most of these countries can be reached in just a couple of hours.
English is the official language
In most cases, in Hong Kong, knowledge of only English will be sufficient. In many places there are signs not only in Chinese, but also in English, and the staff in most large shopping centers speak English well.
Breathtaking nature
For many, the first picture that comes to mind when they mention Hong Kong is tall buildings and densely populated areas. However, you will be surprised to find that Hong Kong actually has many opportunities to spend time outdoors while enjoying nature. From amazing hiking trails to expansive beaches and nature reserves, where people can get away from the hustle and bustle of the city.
Friendly society
Hong Kong is a city where there is a constant flow of people – some come, others leave. While this may seem like a downside, it actually made the expat community very friendly and open to newbies. People are always ready to help, you can easily make new friends. There are many activities taking place every day.
Good healthcare system
Hong Kong has one of the highest life expectancies in the world. The quality of medical services is at the highest level here. In 2018, Bloomberg named Hong Kong’s healthcare system the most efficient in the world. There are both public and private clinics, which are ready to treat even the most complex diseases.
Huge shopping opportunities
Hong Kong is a hub for retail outlets and brands. Here you can find the latest in clothing and electronic gadgets that you cannot find anywhere else.
High level of security
Hong Kong is considered a very safe city – you can walk even late in the evening and at night without fear of any trouble. Of course, as in any other metropolis, petty crime occurs here, but in general, Hong Kong is considered a city with a low crime rate due to strict penalties.
It is worth noting that typhoons occur in Hong Kong between May and November. There are also hurricane showers that turn streets into rivers. However, all this is warned in advance and informed whether it is worth fearing. On many key buildings, in the event of a typhoon hazard, special indicators light up: from T1 to T10. The higher the number, the faster you need to hide in a closed and safe room.
Fast Internet
Hong Kong has the second highest internet speed in the world, behind only Singapore (according to the Speedtest Global Index). This is especially true in comparison with China, where the Internet is slow and “filtered”. This is why running an internet business in Hong Kong is a great idea, unlike mainland China.
Low taxes
Hong Kong has some of the lowest taxes in the world. Companies pay tax only on the profits that are received in Hong Kong at the following tax rates – 8.25% on the first 2 million HK dollars of profits and 16.5% on anything higher. No sales tax or capital gains tax.
The payroll tax rate ranges from 2-17% depending on your salary level. This light tax burden attracts a large number of expats here, and many entrepreneurs prefer to register their companies in Hong Kong.
If you are planning to cooperate with Hong Kong and want to reduce the taxation of your business, one of the best solutions is to open a holding company in Hong Kong. An increasing number of businessmen from different countries choose Hong Kong for their business. Why is it profitable to open a holding company in Hong Kong?
How to set up a holding company in Hong Kong?
Let’s take a look at the steps to open a holding company in Hong Kong. This is not as difficult as you might expect. Hong Kong is a country with a relatively simple and straightforward company formation process.
What you should pay attention to:
- You will need at least one shareholder, director and company secretary. They cannot be the same person. If you are the sole director, you can be a shareholder, but you cannot be the company secretary. So at least you need 2 people.
- If the company secretary is an individual, he or she usually must reside in Hong Kong. If the company secretary is a legal entity, the address of its registered or head office must be in Hong Kong.
- When creating a holding company, there are no requirements for the authorized capital.
- The steps applicable to regular companies also apply to holding companies.
If you are a foreign investor looking to invest in Hong Kong, subsidiaries or private limited companies can also operate in the country as holding companies.
The steps are similar to opening a regular company:
Choose your business structure.
Private limited liability companies are the most popular because the requirements for registration are somewhat lower.
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Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
