Businesses and individuals in Hong Kong enjoy one of the most tax-friendly systems in the world. Only three direct taxes are imposed and there are generous allowances and deductions which can reduce your taxable amount.

The three taxes are:

• Profits tax for the first HK$2 million of profits of corporations is 8.25 percent. Profits above that amount will be subject to the tax rate of 16.5 percent. For unincorporated business (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5 percent and 15 percent.
• Salaries tax which has a maximum limit of 15 percent
• Property tax of 15 percent

Here are the taxes which Hong Kong does not impose:

• No sales tax or VAT
• No withholding tax
• No capital gains tax
• No tax on dividends
• No estate tax

Free Trade Port
Another benefit of setting up business in Hong Kong is its free trade policy. The city’s free port status and easy customs procedures make it easier for businesses and companies to operate.