Hong Kong Company: What It Gives a Foreign Owner and Why It Is Not a Zero-Tax Offshore
Many dream of a Hong Kong company for the "offshore" status. Not many know what stands behind it.
We have helped people set up companies in Hong Kong for years. Here is the honest version.
How it works
If you already have legal status in the EU, the paperwork is minimal: passport and proof of address. A local company secretary handles the rest. In Hong Kong a secretary is required by law. You pay for opening the company, the secretary, and a registered office. It is fast: usually about a week.
What it gives a foreign owner
- Access to Asian markets and easy settlement with suppliers in China and Asia.
- Strong banking (HSBC, Standard Chartered, OCBC) and multi-currency accounts.
- A simple system: one tax on profits, no VAT, no tax on dividends. 8.25% on the first HK$2M, 16.5% above.
- The reputation of a recognised global financial centre, not a blacklist.
Who it is for, and who it is not
A good fit if you trade with Asia, work with Chinese suppliers, run international B2B or an online business with clients worldwide.
Not worth it if your business and clients are entirely inside the EU. Then a European jurisdiction is simpler and cheaper.
The big myth: "a Hong Kong company means offshore, no tax"
Not true, and people get burned on this.
Hong Kong does not even have the concept of an "offshore company." Only profit sourced in Hong Kong is taxed, and profit earned abroad can be exempt, but not automatically. You apply for that status and confirm it every year to the Inland Revenue Department.
What you prove, every year:
- no employees in Hong Kong;
- the owners do not live there;
- you do not buy or sell goods inside Hong Kong.
And not on paper alone. Contracts, invoices and bank statements back every point.
Hong Kong is an excellent tool, but a transparent, reporting one, not a way to disappear from the tax authority. The people who get that from day one get the most out of it.
