At Sterling Migration, we are experts in the niche area of immigration by investment for Hong Kong. Our team strive to provide the most suitable investment opportunities to meet our client’s needs to ensure they can secure residency under the current immigration laws supporting Investments In Hong Kong from Foreign investors.
That said, the unease around Hong Kong currently has seen an exodus of high-net-worth individuals. Many went to the UK and Australia. We are currently seeing a record number of Australian Investment visas available to cater to the demand.
In September 2003, the Immigration Department (“Immigration Department”) of the Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”) introduced the Capital Investment Entrant Scheme (“Scheme”). Before the scheme’s introduction, individuals seeking residency in return for investment in Hong Kong had to rely upon a subset of the Employment Visa, the Employment Visa Based upon Investment in Hong Kong (the “Business Investment Visa”).
The Capital Investment Entrant Scheme was officially suspended on 15 January 2015. This page will be updated once more is known about the next steps or alternative options.
Business Investment Visas are routinely granted to qualifying applicants and often are processed in approximately two to three months.
As a Limited Liability Company formed in Hong Kong or a foreign corporation’s registration under the Hong Kong Companies Ordinance. Sole proprietorships and partnerships are not usually acceptable.
This list is not exhaustive; other documents and information are often required in individual cases. The Business Investment Visa is not available to Chinese residents of the Mainland and nationals from Afghanistan, Albania, Cambodia, Cuba, Laos, North Korea and Vietnam.
The Business Investment Visa has been in place for many years as one of several types of visas available to people seeking to reside in Hong Kong. A reading of the requirements indicates that the objective of the Business Investment Visa is to encourage global investors to engage in business activities within and from Hong Kong. The Business Investment Visa is relatively inexpensive and easy to obtain.
Upon issuance of the Business Investment Visa, the applicant and his dependents (spouse and unmarried dependent children under 18) will usually be granted a one-year stay. The period of stay is generally extended for two years on the basis that the commercial endeavours justifying the extension continue to satisfy the business’s criteria of substantially benefiting Hong Kong’s economy. Other applied conditions include but are limited to not committing any criminal offences, remaining engaged in the business and earning enough income not to become an economic burden to Hong Kong.
The applicant must complete an application form ID(E) 936, and the prescribed fee is HKD 135.
The Business Investment Visa had served its purpose well for Hong Kong, even during 2003, when Hong Kong suffered dramatically due to SARS. The Immigration Department does not publish information that distinguishes between “employment” and “investment” visas. Still, the Director of the Immigration Department advised in 2002 that there are approximately 300 Business Investment Visas issued annually in Hong Kong, and that number has remained steady for several years.
Although there are several differences between the scheme and the Investment Visa, the three most significant are the following:
The policy underpinning the scheme is to attract and maintain foreign capital in Hong Kong. Economic commentators here have observed, somewhat cynically, that the last thing Hong Kong needs is more money invested here, as many banks have only loaned a relatively small percentage of their available capital.
The scheme has been further criticised as it caters to an investor regardless of whether or not they possess insight or education. The visa is granted without the investor participating in the economy or society.
It also is generally believed by many in Hong Kong that the scheme was largely designed for the wives or significant others of wealthy Mainland entrepreneurs. These Mainland entrepreneurs view the scheme as a good investment ( Hong Kong is a prime “overseas” investment destination for such people) and a relatively easy way to provide something of a “gift” to their wives or significant others. The statistics support this belief as more than half of the applications received, approved in principle and formally approved have been for “Chinese nationals” and “Taiwan residents”.
The scheme requires the applicant to invest HKD 6.5 million (approximately USD 834,000) in defined Hong Kong assets. This is a fairly significant investment by any measure.
The Investment Visa requires the applicant to form and capitalise a Hong Kong private limited company, which involves an investment of approximately HKD 15,000 (approximately USD 1,900) or register a branch of the foreign corporation at an approximate cost of HKD 12,000 (approximately USD 1,500). Ongoing costs, including government fees, audits and company secretary, would probably not exceed HKD 20,000 per annum (USD 2,600). This is, by any measure, a reasonably modest sum far below what the scheme requires.
Although the Investment Visa applicant must demonstrate some proposed business activities and a certain level of education, these requirements are not too burdensome.
Unless the applicant intends to be merely a passive investor in Hong Kong, the Business Investment Visa is an absolute bargain compared to the scheme.
Hong Kong companies are ideal vehicles for international trading or consulting activities which are not sourced in Hong Kong and, therefore, can be conducted tax-free. The same is true for companies holding real estate located outside Hong Kong.
Our team assists our clients in incorporating and administering Hong Kong companies and offers comprehensive company secretarial, nominee and management services and accounting and audit services through our partners at competitive fees.
For clients of Sterling Migration, we also provide corporate and personnel directors from Hong Kong to companies incorporated in other jurisdictions.
We incorporate Hong Kong private limited companies. Our services include the preparation of memorandum and articles of association, share certificates, common seals, business registration certificates, statutory books, filing appropriate returns to the Companies Registry on time, and producing minutes of board meetings and general meetings.
We provide the registered office for Hong Kong companies, as well as company secretary services which include all main corporate secretarial tasks.
For clients of Sterling Migration and their companies administered by us, we assist in opening bank accounts with prominent Hong Kong and international banks, including assisting with preparing documents necessary for the account opening procedures.
Two hundred seventy-three classes of Hong Kong-made goods can be exported to the Mainland free of tariff. For other categories of “made in Hong Kong” products, the Mainland also agreed to apply a zero import tariff from 1 January 2006 upon applications by local manufacturers for other product codes maintained on China’s tariff system and meeting the CEPA rules of origin. The HKSAR agrees to bind its existing zero import tariff regime concerning Mainland origin and not impose restrictive regulations on trade in these goods.
Rules of Origin: A product is qualified as “made in Hong Kong” if it fulfils the rules of origin under CEPA. Local Hong Kong, Mainland, and overseas investors may set up new manufacturing operations in Hong Kong so that products subject to high Mainland tariffs may qualify for the CEPA origin rules and enjoy zero tariffs in the Mainland market. Investors may manufacture goods with high intellectual property content in Hong Kong, taking advantage of its legal system and the protection of the Intellectual Property regime.
A Hong Kong manufacturer should apply for a Certificate of Hong Kong origin – CEPA and pass the approved certificate to the Mainland importer. To qualify under CEPA, the goods must meet the Rules of Origin (ROO) under CEPA so that the product can be claimed as HK origin to enjoy tariff preference. ROO sets out the criteria and standards for a product to claim itself from a particular country of origin. For the 273 Mainland product codes covered in the initial phase, the following CEPA origin rules are adopted:
A manufacturer can continue to use an Outward Processing Arrangement (OPA) to subcontract outside its Hong Kong subsidiary or use minor finishing processes for goods intended for export to the Mainland. After outward processing, the finished goods must be returned to Hong Kong and exported to the Mainland under the CEPA in order to claim the zero import tariff concession. Semi-finished goods do not qualify under the CEPA.
CEPA provisions on market access cover a total of 18 services industries, including management consultant services, exhibitions and conventions, advertising, accountancy, construction and real estate, medical and dental services, distribution services, logistics services, freight forwarding and agency services, storage and warehousing services, transport services, tourism, audiovisual, legal services, banking, securities and insurance. To be entitled to the benefits of CEPA, a service company must have substantive business activity in Hong Kong by fulfilling all of the following criteria:
The minimum period of the company’s substantive business operations in Hong Kong is three years, but for construction and real estate, banking and insurance, the requirement is five years. Although the exact requirements for a company to be qualified by industries, the assessment will be on a non-discriminatory and objective basis.
Similar to trade in goods, the HKSAR agrees to bind its existing services regime for and undertake not to introduce new discriminatory measures against, services and services suppliers of the Mainland for those sectors covered in the CEPA.
Definition of “Hong Kong companies” for Services: To be eligible for enjoying the benefits offered by the Mainland under the CEPA, a company must have “substantive business operations” in the HKSAR as assessed on the basis of the following criteria:
The two sides agree to adopt a “sectoral” approach to take into account the unique characteristics of each individual service sector.
Both sides agree on promoting cooperation in the following seven areas: Customs Clearance Facilitation, Quarantine and Inspection of Commodities, Quality Assurance and Food Safety, Cooperation of Small and Medium-Sized Enterprises (SMEs), Cooperation in Chinese Medicine and Medical Products, Electronic Commerce, Trade and Investment Promotion, and Transparency in Laws and Regulations.
Trusts have many applications and advantages – the protection and preservation of assets, tax planning, succession planning, or simply avoiding the expense and delay of obtaining probate under a will. They also provide a high degree of confidentiality.
Hong Kong’s trust law regime was based primarily on English common law, which was supplemented by the Trustee Ordinance (Cap 29) and the Perpetuities and Accumulation Ordinance (Cap 257), enacted in 1934 and 1970, respectively. With the introduction of the Trust Law (Amendment) Ordinance 2013, however, Hong Kong comprehensively modernised its trust law to make it a much more competitive and attractive proposition for trusts.
The major changes brought in by the Trust Law (Amendment) Ordinance 2013 was to:
Placing the shares of an offshore company within a trust can offer substantial tax and non-tax related advantages, which will accrue both on death and during the lifetime of the trust settlor. These advantages may be summarised as follows:
Fees for drafting the trust deed and for the provision of trustee services will be quoted on a case-by-case basis.
Hong Kong Companies And The Advantages:
1.) British legal system as background
2.) Very low tax rate (around 16,5% on net profit)
3.) Tax-exempt for income not incurred in HK
4.) Beneficiary owner’s identity can be hidden from public company records by using the Nominee service
5.) No restriction on fund transfer to and from most part of the world
6.) Close to and with an excellent relationship with Mainland China
7.) Being an international centre of information exchange and transportation hub
8.) Enjoy the convenience of the international banking system;
|Type of entity:||Private Limited|
|Shelf company availability:||Yes|
|Our time to establish a new company:||10 days (+time for the certification)|
|Double taxation treaty access||Details|
|Share capital or equivalent|
|Minimum paid up:||1 HK$|
|Usual authorised:||10,000 HK$|
|Shareholders and Directors|
|Minimum number:||One minimum Details|
|Local residency required:||No|
|Publicly accessible records:||Yes|
|Required:||Yes (may be a corporate body)|
|Local or qualified:||Local residency or local incorporated|
|Requirement to prepare:||Yes|
|Requirement to file accounts:||Yes|
|Publicly accessible accounts:||No|
|Registered office||Yes, must be maintained in Hong Kong|
|Restrictions on trading||Yes Details|
|Language of legislation and corporate documents||Chinese and English|
|Change in domicile permitted:||No|
– Minimum 1 Shareholder and Director is required;
– Directors and Shareholders could be the same person
– No nationality restriction for shareholders and directors
– Minimum subscribed share capital is HK$ 1
– Registered address in Hong Kong
– One company secretary should either be a Hong Kong resident or Hong Kong limited company
– The company name should not be the same as those already in the company register and can be only English or only Chinese name or English plus Chinese name
1.) Certificate of Incorporation of corporate
2.) Memorandum and Articles of corporate
3.) Minutes of Directors approving taking up shares/directorship in the HK Company and authorisation of signatory
– Individuals of any nationality
– Hong Kong registered company
– Offshore registered company
– Certificate of Incorporation (CI)
– Business Registration Certificate
– Copies of shareholders, directors etc, registration documents (Original is kept in government for public search.)
|HONG KONG COMPANY FORMATION||HK$|
|1. Incorporation of the company, taxes and the initial opening fees||10000|
|2. Service opening expense||5000|
|3. Annual corporate secretary expense (obligatory)||1000|
|4. Annual company’s address in Hong Kong expense (obligatory)||1000|
|5. Opening of a bank account in Hong Kong||3360|
|The amount that should be paid to a new bank account, it stays in the bank and can be used later on as company’s money.***||5000***|
|6. Legal certification of all documents needed for opening a bank account||3115|
|7. Courier mail||1000|
|a.) Nominated stockholder / annually||2000|
|b.) Nominated director / annually||2000|
|c.) Power of Attorney||3000|
|d.) Legal certification of all documents||3500|
|9. State tax expenses||6600|
|a.) Business registration expense (the first year is included in the inc. costs)|
|b.) Annual tax return submission|
|10. Registered agent’s fee||2000|
|a.) Annual corporate secretary expense (obligatory)|
|b.) Annual company’s address in Hong Kong fee (obligatory)|
|11. Accounting and auditing (for small companies)||7000|
|12. Change of name||4000+dhl|
|13. Company de-registration||6000|
*** Amount of HK$ 5000,- is not an opening expense because the company can freely use this money for its own expenses. It is a deposit paid to a new bank account of the company in Hong Kong. This money is at the client’s free disposal as soon as the account is fully operational.
Companies registered in Hong Kong can be exempt from all taxes only if they don’t have any turnover with other Hong Kong companies. In order to open a bank account in Hong Kong or China, the client’s presence is necessary. Also, all beneficial owners/shareholders holding more than 10% of company shares are required to visit an HK bank branch and provide a certified passport copy and proof of address.
1. name of the company (2-3 names of your choice)
2. passport copy (of all directors and shareholders)
3. utility bill for confirmation purpose
4. cash and capital contribution (in per cent for each shareholder)
5. payment to the EURO COMMERCE LLC bank account
– Only English name
– Only the Chinese name
* For practical reasons, we don’t suggest using only Chinese names. The English name is useful for daily use, including banking transactions.
– English plus Chinese name
* In daily use, quoting only English names is enough.
A name that is similar to or identical to an existing company. A name that constitutes a criminal offence or is otherwise contrary to the public interest. A name that implies royal or government patronage.
The building society, Chamber of Commerce, co-operative, imperial, Kaifeng, mass transit, municipal, royal, savings, tourist association, trust, trustee, underground railway, bank, insurance, assurance, reinsurance, fund management, asset management and investment fund. The name of the company must end with Limited or Ltd.
Only profits which have a source in Hong Kong are taxable here. Profits sourced elsewhere are not subject to Hong Kong Profits Tax
There are three distinct and separate headings under which tax is levied :
– Corporations, partnerships, and sole proprietorships that carry on a trade, professional or business in Hong Kong are subject to profits on profits which are generated from sources within Hong Kong;
– Only profits which arise in Hong Kong, or are derived from Hong Kong, are subject to profits tax;
– Currently, the profits tax rate is 16.5%.
– Property tax is levied on the owners of real estate which is situated in Hong Kong.
The minimum number of directors and shareholders is one, who may be a natural person or a body corporate. They may be the same person or legal entity of any nationality and need not be residents or incorporated in Hong Kong.
A Hong Kong company must appoint a company secretary, who may be a natural person or a body corporate, but the company secretary must be a resident or incorporated in Hong Kong.
Restrictions on Trading
It cannot undertake banking or insurance activities or solicit funds from or sell its shares to the public.
Belgium, Denmark, Finland, Germany, Luxembourg, Netherlands, Norway, Singapore, Sri Lanka, Thailand, United Kingdom of Great Britain and Northern Ireland, United States of America and Vietnam.
China – Corporate and Personal Income Tax. Belgium, Thailand – dividends, interest and royalties. Other Countries – for shipping and aviation.
The major attractions of Hong Kong’s tax system to foreign investors and businessmen – and in turn, major reasons for their increasing presence and contribution here – are the following:
The current profits tax rate is 17.5% for corporations and 15.5% for non-corporate taxpayers. Personal tax is therefore also among the lowest in the world.
Hong Kong has a simple scheduler system of tax, in which only specified types of income, namely profits, salaries and property rental income, are taxable. This is different from an income tax system, under which a person is subject to tax on his aggregate income from all sources.
Taxation in Hong Kong is based on the territorial source principle. Hong Kong companies only pay tax on profits sourced in Hong Kong and the rate of taxation currently is 17.5% on assessable profits. A company pays no tax in Hong Kong on income derived from outside Hong Kong. To enhance certainty in the operation of the territorial source concept, there is also the possibility of obtaining an advance ruling on the source of profits.
Therefore, Hong Kong companies are ideal vehicles for international trading or consulting activities that are not sourced in Hong Kong and, therefore, can be conducted free of tax. The same is true for companies holding real estate located outside Hong Kong.
Salaries tax is also only charged in Hong Kong sourced salaries. Expatriate employees who visit the territory for less than 61 days in a tax year are not liable to salary tax. Employees who have paid tax of substantially the same nature as Hong Kong salaries tax in any territory outside Hong Kong are also exempt in respect of their foreign service income.
However, withholding tax on royalties does apply, currently at 30% of the usual tax rate, i.e. at an effective tax rate of 5.25%, and is only imposed on royalties paid to non-resident recipients not related to the payers. If they are related parties, then a tax rate of 17.5% is applicable.
The Hong Kong tax system is also attractive because many taxes present in other jurisdictions are absent: gains from the sale of capital assets are not subject to tax; there is no withholding tax on dividends paid by Hong Kong companies; interest tax was abolished on 1 April 1989.
Generally all expenses, to the extent to which they have been incurred by a taxpayer in the production of chargeable profits, are allowed as deductions. Examples include interest on borrowed funds and repairs for plant and machinery used in producing profits. Losses can be carried forward and set off against future profits of that business. A corporation carrying on more than one trade may have losses in one trade offset against profits of the other. Generous capital allowances are given in respect of capital expenditure incurred on the construction of industrial and commercial buildings and structures and capital expenditure incurred for the purposes of producing chargeable profits. In the case of capital expenditure on the acquisition of plant and machinery, generous depreciation allowances are also provided.
Our specialised services are also a resource and complement to major law and consulting firms. We can help other firms and their clients with the unique and specific details required by incorporation and the proper management of Hong Kong companies, as well as provide all necessary related business services.
CEPA, the bilateral free trade agreement between Hong Kong and Mainland China, became effective on 1 January 2004. CEPA offers early market access to local and international companies with qualified Hong Kong-based companies regardless of nationality or size. Even after China complies with its World Trade Organization (“WTO”) commitments, many Hong Kong companies will maintain a sustainable advantage as the CEPA offers even great concessions beyond China’s commitments in its WTO accession.
The CEPA covers three broad areas: trade in goods, trade in services, and trade and investment facilitation. One strategy that overseas firms not yet in Hong Kong should consider is to partner with or acquire eligible companies based in Hong Kong to take advantage of CEPA and gain a first-mover advantage in the Mainland markets.
Broadly speaking, the liberalisation permits earlier access to Hong Kong companies and service providers to the Mainland market ahead of China’s WTO timetable. In some sectors, like construction and real estate services, logistics services, transport services, distribution services, legal services, and audiovisual services, the concessions extend beyond China’s WTO commitments. Unless positively exceeded by the concessions stipulated in the CEPA, China’s WTO commitments, including both concessions and limitations, for each individual services sector continue to apply.
To be eligible for this enhanced “first-mover advantage”, Hong Kong companies must meet certain criteria.
Complete our online enquiry form and one of our senior managers will arrange a confidential consultation to discuss your requirements and potential options.
At Sterling Migration, our team are highly acclaimed as ready to manage even the most complex of cases. Our thesis, however, is to keep things as simple as possible. We believe it is important our clients are comfortable and remain in control of their international plans throughout the process. We endeavour to protect our client’s best interests while delivering outstanding results.
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