Frequently Asked Questions
FAQs
Frequently Asked Questions about Hong Kong Tax
What taxes do Hong Kong companies need to pay each year?
The main tax for Hong Kong companies is profits tax. For eligible limited companies, the tax rate is 8.25% on the first HK$2 million of profits and 16.5% on the remaining profits. For sole proprietorships or partnerships, the tax rates are 7.5% and 15% respectively.
What is a two-tiered profits tax rate?
All entities with taxable profits in Hong Kong are subject to a two-tiered profits tax rate unless other related entities have been nominated for taxation under the two-tiered profits tax rate.
Under the two-tiered profits tax system, the first HK$2 million of assessable profits from incorporated and unincorporated businesses (mainly partnerships and sole proprietorships) are taxed at rates of 8.25% and 7.5% respectively. Assessable profits exceeding HK$2 million from incorporated and unincorporated businesses continue to be taxed at rates of 16.5% and 15% respectively.
How do Hong Kong companies set their year-end dates?
Hong Kong companies can freely choose their year-end date, which generally follows the Hong Kong government's tax year and is set as March 31st of each year, or follows the Gregorian calendar and is set as December 31st.
What are the provisions of Hong Kong tax ordinance regarding deductions for donations?
Only donations to accredited charities are deductible. The total amount of the donation must be at least $100, and the portion not exceeding 35% of the assessable taxable profits is deductible.
List of accredited charities:
What is provisional income tax / provisional salaries tax?
Since the government usually issues tax notices almost a year after the end of the year, the tax office will estimate and collect the tax for the current year based on the previous year's profits/salaries.
Frequently Asked Questions about Hong Kong Companies
What is the process for setting up a Hong Kong limited company?
You need to draft a company name and select the company category, and then fill out the incorporation form, the articles of association, and a notice to the Commercial Register.
Can non-Hong Kong residents establish Hong Kong companies?
Non-Hong Kong residents can also establish local limited companies in Hong Kong and serve as shareholders and directors.
A company secretary must be a legal entity that is ordinarily resident in Hong Kong or has a registered office or place of business in Hong Kong.
What are the regulations for company directors and company secretaries?
A private company must have a company secretary and at least one individual director. If the company has only one director, the company secretary cannot also be that director.
What are the regulations regarding company names?
A company can register an English name and/or a Chinese name, but cannot use a name that combines Chinese and English characters.
If the proposed company name is the same as another company name, the company name will not be approved.
Can the company’s Chinese name use simplified Chinese characters?
The company's Chinese name must be in traditional Chinese characters.
What is a company secretary?
Under Hong Kong law, all limited companies registered in Hong Kong must appoint a company secretary. A company secretary differs from a private secretary and is primarily responsible for statutory compliance, corporate governance, maintaining statutory records, filing annual returns, and communicating with regulatory authorities to ensure the company complies with the Companies Ordinance. A company secretary can be an individual or a professional secretarial service agency.
When is it required to file an annual return after a company is incorporated?
Private companies are required to file an annual return within 42 days of the anniversary of their incorporation.
Can the company’s registered address be set in mainland China?
No, it must be a Hong Kong address.