Offshore: Hong Kong

Guide for Offshore Corporate Services in Hong Kong

Hong Kong was a British colony from 1842 until the 1997 handover to China. Under the “One Country, Two Systems” principle, Hong Kong retains its own legal, economic and judicial systems based on English Common Law, governed by the Basic Law. It operates as a Special Administrative Region (SAR) with high autonomy while remaining part of China.

Home to over 7 million people, Hong Kong is a multicultural, densely populated region known for religious diversity, a strong financial sector, and a long history as a global trading hub. Its strategic location made it a major military base and later one of Asia’s most influential economic centres.

Today, Hong Kong blends Eastern traditions with Western systems and is widely regarded as Asia’s culinary and financial capital.

A Hong Kong offshore company formation allows businesses to operate internationally while benefiting from Hong Kong’s low-tax regime. If all business activities, management decisions, clients, and revenue originate outside Hong Kong, the company may qualify for 0% profit tax. Annual audits, proper documentation, and compliance with Hong Kong’s regulations remain mandatory for maintaining offshore tax exemption.

Infrastructure

Hong Kong offers world-class infrastructure and seamless connectivity:

• Hong Kong International Airport – among the world’s busiest for cargo and passengers; only 23 minutes from the city via Airport Express.
• Public Transport – efficient buses, trains, ferries, taxis and trams create a highly connected city.
• High-Speed Rail Link – the Guangzhou–Shenzhen–Hong Kong Rail enhances business mobility into Mainland China.
• Internet Coverage – advanced broadband and fibre-optic networks ensure stable, high-speed communications.
• Logistics Hub – leading port and air-cargo facilities support major global and China-focused trade.
• Hong Kong–Zhuhai–Macao Bridge – strengthens access to the Pearl River Delta’s major cities.

Economy

Hong Kong runs a highly developed, low-tax, free-market economy. The Hong Kong dollar is issued by major international banks and pegged to the US dollar. As a gateway to Mainland China, Hong Kong is a global centre for finance, trade, tourism, and high-value services.

Its strengths include:

• Level playing field for businesses
• Low and simple tax system
• Free flow of capital and information
• Reliable rule of law
• Excellent infrastructure

Legal System

Hong Kong follows a Common Law system, separate from Mainland China’s civil law system. Primary legal sources include the Basic Law, legislation, case law, and applicable international law.

The Basic Law guarantees Hong Kong’s capitalist system, currency, independent judiciary, and rights of residents for 50 years after 1997.

Central Bank

The Hong Kong Monetary Authority (HKMA) oversees:

1. Currency stability
2. Financial and banking system integrity
3. Development of financial infrastructure
4. Management of the Exchange Fund

Anti-Money Laundering (AML) Framework

AML requirements include customer due diligence, record-keeping, and supervision by relevant authorities (HKMA, SFC, Insurance Authority, Customs).

The 2018 Amendment extended AML obligations to legal, accounting, real-estate, and trust or company service providers (TCSPs), who must obtain a licence and pass a fit-and-proper test.

Corporate Entities

A Hong Kong offshore company is used to legally minimise tax when business activities and income are conducted entirely outside Hong Kong.

To Qualify for Offshore Tax Exemption:

Your company must prove that:

• All income is generated outside Hong Kong
• No customers or suppliers are in Hong Kong
• No operational or physical presence exists in Hong Kong
• Management decisions occur offshore

Offshore Claim Process:

• Submit documentation proving offshore income
• Provide director passports, invoices, agreements, receipts, and transaction records
• Offshore status is valid for 3 years, but profit tax exemption must be applied annually
• Annual audit and tax filing remain mandatory

Taxation

Hong Kong offers one of the lowest and simplest tax systems:

• Foreign-sourced profits: 0% corporate tax
• Local profits: 16.5% corporate tax

Offshore companies must not conduct business with Hong Kong residents.

Company Registration

Hong Kong is reputable, stable, and business-friendly with:

• Flexible company structure
• Minimal capital requirements
• Fast incorporation process
• Mandatory disclosure of directors/shareholders (nominees allowed)
• Mandatory annual audits and tax filings
• In-person requirement to open a bank account
• Option to purchase a ready-made “shelf company”

Business Structures in Hong Kong

• Corporations: Private or Public Limited by Shares
• Business: Sole Proprietorship
• Partnerships: General / Limited Partnership
• Foreign Companies: Branch Office / Representative Office / Subsidiary

Compliance levels differ across entity types, with companies requiring more extensive reporting.

General Features of Offshore Entities

• Entity Type: Limited
• Govt. Fees: Approx. USD 350
• Foreign Tax: None
• Local Tax: 16.5%
• DTA Access: Yes
• Share Capital: HKD 1 minimum
• Directors: Minimum 1 (no residency requirement; corporate directors allowed)
• Members: Minimum 1
• Company Secretary: Mandatory (must be local)
• Accounts: Preparation, audit, and filing required
• Annual Return: Mandatory
• Public Record Access: Yes
• No Bearer / No-Par-Value Shares

Specific Features

• Currency: HKD (pegged to USD)
• Languages: English & Chinese
• Exchange Control: None
• Legislation: Companies Ordinance (Cap 32)
• Company Type: Private Limited by Shares
• Restrictions: No banking/insurance without licence; cannot solicit funds from the public
• Registered Office: Mandatory
• Name Restrictions: No identical names; no implied government/royal affiliation
• Beneficial Ownership Disclosure: Required

Terms & Conditions

• Information is sourced from relevant authorities.
• Laws and acts may change; updates will be provided as needed.
• Guidelines reflect the latest available updates from associate firms.
• Applicable updates will be communicated during service delivery.

Need Assistance?

Please refer to our Services section or Contact Us for Hong Kong offshore company setup, tax planning, corporate compliance, and related advisory.