Incorporating
The Hong Kong Company is a unique incorporation structure that allows businesses to access Mainland China while taking advantage of Hong Kong’s free-market legislation and British legal system. It is a flexible offshore investment vehicle than can be adapted to best suit individual business needs. Hong Kong Companies can act as standalone entities, but many are also incorporated as WFOEs in the Chinese Mainland.
| Pros | Cons |
|---|---|
| No limit on transfer of capital in or out of Hong Kong | Expensive real estate |
| No minimum capital requirement | Higher operational expenses |
| Lower corporate taxes than Mainland China | Low Double Tax Agreement (DTA) network with international companies; capital gains may be subject to double taxation in both foreign country and Hong Kong |
| Transparent legal system based on British Law | New financial policies in Mainland China compete with Hong Kong’s once dominant investment environment |
| Ability to maintain secrecy of Chinese suppliers | A Hong Kong Company is not considered a legal entity in Mainland China |
| Beneficial entity to structure with other incorporation options in mainland China for increased liability protection and function for all-intensive purposes as an Offshore Investment Vehicle | |
| Fast and easy incorporation and visa approval processes compared those of Mainland China |
Hong Kong’s business environment is just as attractive as its financial incentives. Consistently ranked as the freest economy in the world, Hong Kong has many long established American and International legal, financial, and real estate companies that can help facilitate business operations in China.
For more information about starting a business in China, please view Q & A: Starting a Business in China.
TriVista’s global consulting team provides guidance to foreign businesses operating in China. Learn More.