Overview

A leading international financial centre, Hong Kong has a prudent and robust financial regulatory regime. The Linked Exchange Rate System (US dollar peg) has served Hong Kong well as the pillar of monetary and financial stability. The financial sector employs about 273,000 people (7.1% of workforce) (2019) and directly contributes 19.8% to Hong Kong’s GDP (2018). The Government and regulators monitor Hong Kong’s financial markets to ensure stability in this turbulent time of international and geopolitical tension.

Stock market

• World’s 5th largest and Asia’s 3rd largest stock market by market capitalisation at end-October
• 2020 (US$5,586 billion)
• World’s No.1 for Initial Public Offering (IPO) funds raised in 2019 (US$40.1 billion). Hong
• Kong ranked No.1 for IPO funds raised seven times since 2009
• World No.1 environment for IPO and M&A (mergers and acquisitions) activity (Global
• Transactions Forecast 2020 compiled by Baker McKenzie and Oxford Economics)
• Since listing rules were amended in 2018 and up to mid-Dec 2020, a total of 38 companies with
• weighted voting rights structure, pre-revenue /pre-profit biotechnology companies and
• secondary listed companies have been listed in Hong Kong, with a total current market
• capitalisation of over HK$10 trillion.

Asset and wealth management

• As the premier fund management hub in Asia, Hong Kong’s asset and wealth management business at end-2019 amounted to HK$29 trillion (approx. US$3.7 trillion).
• Apart from unit trust, a fund can be set up in a new corporate fund structure, i.e. open-ended fund companies, in Hong Kong since July 30, 2018.
• Public and private funds, irrespective of whether they are onshore or offshore, can enjoy profits tax exemption at the fund level subject to meeting certain conditions.
• The Government established a limited partnership fund regime on August 31, 2020 to attract private equity funds to domicile and operate in Hong Kong.
• The 2020-21 Budget proposes to provide tax concessions for carried interest issued by private equity funds subject to the fulfilment of certain conditions to attract more private equity funds to domicile and operate in Hong Kong.

Insurance

• One of the most open insurance markets in the world
• Highest concentration of insurers in Asia (164 authorised insurers at end-November 2020)
• Total gross premium income of HK$566.9 billion (approx. US$72.3 billion generated in 2019)
• The Government is pursuing a number of measures to increase Hong Kong’s competitiveness as an international insurance hub, including reducing profits tax rate by 50% for marine and specialty insurance businesses, facilitating the issuance of insurance-linked securities in Hong Kong, expanding the scope of insurable risks by captive insurers and enhancing the regulatory framework for multinational insurance groups.

Banking

• 77 of the world’s 100 top banks operate in Hong Kong (end-November 2020)
• The banking system remains robust with major banks’ average liquidity coverage ratio and average capital adequacy ratio exceeding 156% and 20% respectively, both well above the international regulatory standards.
• The aggregate balance of the banking system increased significantly in the past year, reflecting continued investor interest and confidence in Hong Kong’s capital market. As at December 15, 2020, the Aggregate Balance amounted to HK$457.5 billion.
• From end-2019 to end-September 2020, the total deposits of banks grew by 7.3% to HK$17,772 billion.

FinTech 

Hong Kong is a resilient international financial centre. FinTech is a sector of strategic focus that Hong Kong government is investing lots of resources in to foster the growth of the entire FinTech ecosystem. Also, in light of the economic challenge from the pandemic, additional government support measures have been put in place to help FinTechs companies to cushion the impact. Our FinTech specialists are here to work closely with the private and public sectors to build Hong Kong as a world-class FinTech hub.

Private Equity

Private equity and venture capital funds, whether onshore or offshore, can enjoy a profits tax exemption; besides, a tax concession for carried interest issued by private equity funds operating in Hong Kong and the limited partnership fund regime will be introduced.

Capital Market 

Opportunities abound from initial public offerings to bond issuance, loan syndication and much more. The Belt and Road Initiative has also paved the way for several infrastructure projects generating great demand for financing services.

Corporate Treasury Centres & Asset Financing 

Tax benefits are now provided under specified conditions giving incentives for companies from different industries to establish their corporate treasury centers in Hong Kong.  More opportunities on asset financing business, such as aircraft leasing, have also arisen.

The key features of a Hong Kong Company Formation are:

• No requirement for audit or to file accounts and annual returns where the Company is not trading
• A minimum of one Director, one Secretary and one Shareholder must be appointed. A Nominee Secretary is included in the formation package.
• Directors and Beneficial Owners can be corporate or individual and do not need to reside in Hong Kong. There must be an Individual appointment in the company.
• Only one person needs to be appointed, one person can be the Director, Secretary and Shareholder. However, the Secretary must be resident in Hong Kong. A Nominee Secretary is included in our price. 
• A visit to Hong Kong is not required to form your company

Hong Kong is one of the most famous tax havens in the world. Hong Kong has the following tax rates:

• 16.5% for companies
• 15% for unincorporated businesses
• 2%-17% for salaries

Why Form Hong Kong Companies?

If you are an entrepreneur who is looking to form an offshore company, Hong Kong is one of the best jurisdictions with a lot to offer. It does not matter whether you are a seasoned company director, or you are looking to form your first start-up. There are many advantages which come with setting up a business in Hong Kong. Hong Kong companies can benefit from a globalized economy and a very small rate of corporate taxes, making it somewhat of an ideal location for offshore companies.