Nowadays, many investors and entrepreneurs want to establish and run their businesses in Hong Kong. The rationale behind is that Hong Kong excels in many business factors that continue to contribute to its success. Below are some vital business factors that answer the question “Why do entrepreneurs choose Hong Kong to start a business?”

Located at the heart of Asia and situated on the southeast coast of Mainland China, Hong Kong is still a gateway for entrepreneurs to tap into the Mainland China Market. According to recent researches, the number of firms using Hong Kong as the local or regional office, or even global headquarters, has been on the rise.

Hong Kong’s taxes are among the lowest tax in the world. Its simple tax regime and legislation offer an attractive business environment to entrepreneurs. Only profits sourced in Hong Kong are taxable. There is no capital gain tax, sales tax, value added tax, and withholding tax on interest income and dividend income. Hong Kong’s profits tax rates for limited companies and unincorporated businesses are at 16.5% and 15% respectively. Salaries tax rate starts with 2% and goes up to 17% for salaries income exceeding HKD132,000. Losses are also allowed to carry forward to offset future profits without any time limitation.

Hong Kong is noted for its well-designed and robust infrastructure, such as the Hong Kong Exhibition and Convention Centre, Cyberport, Hong Kong Science and Technology Parks, etc. Entrepreneurs can set up their limited companies within one weeks. In addition to its business-friendly tax system, Hong Kong also has strict regulations on intellectual property rights protection and various dispute resolution channels to support businesses. Hong Kong is, therefore, ranked as the world’s fifth easiest place in which to do business. (Note 1: World Bank Report: “Doing Business 2016”)

The Hong Kong SAR Government and private sector have established a lot of business support programmes and Government Funding Schemes to foster the growth of small and medium size enterprises (“SMEs”). The Hong Kong Trade Development Council, the Support and Consultation Centre for SMEs and the Hong Kong Productivity Council further support Hong Kong business firms in different aspects, such as helping international business firms to explore and develop businesses in Mainland China and Asia, providing information and business advisory services to SMEs, and promoting the use of efficient methods to increase productivity.

Hong Kong is a modern and westernized city where East proverbially meets West, a metropolis that blends both eastern and western cultures. By adopting a liberal immigration policy, the Hong Kong SAR Government encourages immigration and visits by nationals of different countries. People from about 170 countries and territories may visit Hong Kong visa-free from 7 days to 180 days. People from other areas or people who want to stay over the visa-free period must apply for a visa/entry permit before they travel to Hong Kong. At the same time, Hong Kong’s Work and Business Visa Schemes, such as the Quality Migrant Admission Scheme, are well established to encourage entrepreneurs to relocate their businesses to Hong Kong and employ foreign professionals to work for their firms.

According to the Heritage Foundation, Index of Economic Freedom 2016, Hong Kong is ranked as the world freest economy. Driven by the principles of free enterprise, free trade and free market, Hong Kong is one of the world’s most robust and dynamic economies with a sound banking system and strong legal environment. There is no restriction on inward and outward investments, foreign exchange and foreign ownership. Further benefited by the Closer Economic Partnership Agreement, business firms in Hong Kong have gained preferential access to the Mainland China Market, such as tariff free treatment for all products with Hong Kong origin. Hong Kong service providers in 40 service areas are also eligible to preferential treatment when providing services in Mainland China.

Under the Sino-British Joint Declaration (1984), the Hong Kong SAR follows the “One Country, Two Systems” policy, which gives it a high level of autonomy on all matters except for foreign and defense affairs. It adopts the Basic Law and retains its existing political, economic and English common law based judicial systems. The Independent Commission Against Corruption (“ICAC”) is also well-established to combat public and private sector corruption. Hong Kong, as a corruption-free and politically stable economy, is therefore an ideal place for entrepreneurs to start a business.