Hong Kong has become one of the world’s favorite places for setting up holding companies and for good reason. With a simple tax system, international banking, and a strong legal environment, Hong Kong offers global entrepreneurs and companies a powerful gateway to Asia.

If you’re expanding your business, planning investing internationally, or planning a smart asset structure, a Hong Kong holding company is one of the smartest locations you can use.

Why Choose Hong Kong for Your Holding Company?

Low Taxes and No Tax on Foreign Income

Hong Kong uses a territorial tax system, which means only income made in Hong Kong is taxed. So if your holding company receives dividends or income from overseas subsidiaries, or if your clients are located overseas those earnings are exempt from tax.

Other advantages:

  • No capital gains tax
  • No tax on dividends
  • No withholding tax
  • No VAT

These advantages make Hong Kong the perfect location for international investment structures whether you want to invest in China, Asia or not.

A Global Financial Hub

Hong Kong is one of the most important financial centers in the world. This makes it easy to open:

  • Multi-currency corporate bank accounts
  • Investment accounts
  • Treasury management structures

Hong Kong is seen as transparent and internationally compliant. It means your transfers are not blocked if you send or receive money.

Stable and Protective Legal framework

Hong Kong follows English common law offering strong protection of shareholder rights. It is very helpful to predict dispute resolution if you have a contract issue with a partner or a client. The corruption is low so it is perfect if for example you wish to have a contract with a client overseas. This is essential when managing multiple subsidiaries or highvalue assets. For example if you have a subsidiary in a higher corrupted country like Indonesia, it will be easier to to make a contract with your company in Hong Kong and ensure a proper conflict resolution than in Indonesia where corruption is high and procedures take ages.

Perfect Gateway to China and the rest of Asia

If you want to expand into China, Hong Kong gives you a perfect entry to the market. Hong Kong provides facilities for companies looking to sell to mainland China with some custom zone where product transit. It means you can receive payment in Hong Kong for example via WeChat and have your product derived quickly in China without having to set up a company in China.

Hong Kong is also the ideal headquarters for businesses operating across Asia. Indeed Hong Kong has some of the best tax treaties with the other countries in Asia. For example, The dividend tax with Indonesia is set at only 5%. It means a dividend going from Indonesia to Hong Kong will be taxable in Indonesia at only 5% while it is normally at 10%.

Why to have a holding in Hong Kong for Asset Protection

A Hong Kong holding company helps to separate and mitigate your operating risk. For example you can have your subsidiaries in different countries and bring up the cash flow and royalties to Hong Kong and use the cash flow to reinvest in others countries by transiting in a country with less corruption and strong protection.

Usually Hong Long is used to hold the intellectual property of a group by registering the trademarks or patents.

Ready to structure your holding company in Hong Kong?

Our consultants can help you plan your structure, understand tax obligations, and set up your company the right way.

(Button) Start with a consultation

How to Set Up a Holding Company in Hong Kong with ILA

Step 1 Contact us and Plan Your Structure

We will work on the purpose of your company structure and how to work on the cashflow of the company.

  • Purpose of the holding
  • Define shareholders and directors
  • Secure a company name

Read : Why and how to open a company in Hong Kong

Step 2  Prepare the Requirements with ILA

You’ll need to provide to us

  • 1 director (can be non resident)
  • A least 1 shareholder who can be similar to the director
  • A registered address (we can provide one)
  • A proof of residence (utility bill)

Step 3  Incorporate the Company

The process is fast, usually 3 to 5 business days. Once approved we will provide all company documents such as:

  • Certificate of Incorporation
  • Business Registration Certificate

Step 4  Corporate Bank Account opening

Many banks allow remote onboarding but are strict on the KYC. Our team will assist you to define with you how to reply to the questions with our bank partners. It is possible to also open a bank account with a traditional bank directly in Hong Kong. However a minimum deposit will be required and we recommend you consult us to see if you can be eligible depending on your profile and business plan.

Step 5 Maintain Annual Compliance

Hong Kong has a very easy and flexible accounting and annual compliance post incorporation. However even without activity, Hong Kong companies must file:

  • Annual Returns
  • Having an audited financial statements to confirm if the company is subject to 0% tax
  • Business Registration renewal and pay the related fee

Learn more about Hong Kong company setup.