Destination · Hong Kong
A Hong Kong company for business in Asia
An established trading hub that taxes profits sourced in Hong Kong. Useful for Asian trade and banking, when the business really fits there.
Overview
Territorial tax, explained accurately
Hong Kong charges profits tax on profits arising in or derived from Hong Kong. Foreign-source trading profits are generally outside Hong Kong profits tax, but specified foreign-source income received in Hong Kong by covered multinational-group entities may be taxable under the FSIE regime unless an exception applies. Inland Revenue Department
Where a profit arises depends on where the operations that produce it are carried out. A payment from a foreign customer, or into a foreign account, does not by itself make a profit foreign-source. A company run from a Hong Kong office, trading from Hong Kong, will usually have Hong Kong-source profits.
Since 2023, the foreign-sourced income exemption (FSIE) regime also taxes certain passive foreign income of companies in multinational groups when it is received in Hong Kong, unless the company meets an economic-substance or other exception.
US citizens remain taxable in the US wherever they live, and US owners of a foreign company have extra reporting. See leaving the United States. Canadians, see leaving Canada.
At a glance
Hong Kong in six lines
| Company types | Most clients use a private company limited by shares, registered with the Companies Registry. |
|---|---|
| Setup steps | At least one director who is an individual, a company secretary (an individual secretary must ordinarily reside in Hong Kong), and a registered office in Hong Kong, followed by business registration. |
| Ongoing obligations | Audited accounts, profits tax returns, annual returns to the Companies Registry, and records that support any claim that profits are offshore. |
| Banking | Hong Kong banks apply detailed due diligence on ownership, activity and local connection. Approval is at the bank's discretion. |
| Good fit for | Entrepreneurs with real trade, suppliers or clients in Asia who want a recognised company and bank there. |
| Watch out for | Offshore claims that the facts do not support, FSIE rules for group companies, and being taxed where the company is actually managed. |
General information, not legal or tax advice. Immigration and tax rules, amounts and processing times change; we confirm the current requirements for your specific case during your Global Strategy.
Rules and fees, as checked September 2026
What the official sources say
- Profits tax rates. For corporations, 8.25% on the first HK$2,000,000 of assessable profits and 16.5% on the remainder. Foreign-source trading profits are generally outside Hong Kong profits tax, but specified foreign-source income received in Hong Kong by covered multinational-group entities may be taxable under the FSIE regime unless an exception applies. Inland Revenue Department (FSIE) Inland Revenue Department
- FSIE regime. Applies to entities in multinational groups. Covers foreign-sourced interest, dividends, IP income and disposal gains received in Hong Kong. Relief depends on an economic-substance requirement (adequate staff and spending in Hong Kong to manage the assets), a nexus requirement for IP income, or a participation requirement for dividends and share gains. Inland Revenue Department
- Incorporation fee. HK$1,545 for an electronic application for a private company limited by shares, plus the separate business registration fee. Companies Registry
Government fees, tax, audit costs and our professional fees are separate costs. Our fees for formation and banking are quoted after the Global Strategy.
Done for you
How we handle your Hong Kong company and bank account
You make the decisions. We coordinate the legal, accounting and corporate-services professionals in each country and follow every step, so the paperwork never becomes your job.
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Structure
We check whether a Hong Kong company fits your business, your tax residence and your citizenship, and where it sits in your wider structure.
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Formation
We coordinate incorporation, identity checks, the registered office and the officers the law requires.
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Banking
We shortlist suitable banks and prepare the onboarding file: ownership, activity, source of funds and tax-residence evidence.
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Ongoing
We coordinate accounts, returns and annual filings with local professionals, and the reporting you owe at home.
Are profits of a Hong Kong company tax-free if my clients are abroad?
Not automatically. What counts is where the operations that earn the profit take place, not where the customer or the bank account is. If the business is run from Hong Kong, its profits are usually taxable there.
What is the FSIE regime?
Since 2023, companies in multinational groups can be taxed on certain foreign interest, dividends, IP income and disposal gains received in Hong Kong, unless they meet an exception such as economic substance in Hong Kong.
Do I need to live in Hong Kong?
No. The company needs a registered office in Hong Kong and a company secretary; if the secretary is an individual, he or she must ordinarily reside in Hong Kong. Banks may still expect a real connection to Hong Kong.
I am a US citizen. Does a Hong Kong company change my US taxes?
You stay taxable in the US, and owning a foreign company adds US filings and can pull its income into your US return. See leaving the United States.
Your next step
Does a Hong Kong company belong in your plan?
The Global Strategy checks whether your business really fits Hong Kong and how the company sits with your residence and banking.