Pros and cons of moving your IT business to Hong Kong
Hong Kong attracts international companies with low tax rates. The proximity of China, Singapore, and other countries in the Asian market is also promising. But there are some disadvantages to moving your IT business to Hong Kong. Examples are costly living, high rent, and difficulty opening a bank account. Therefore, if you are thinking about moving your IT business to Hong Kong, you need to know its pros and cons, and how they can be solved.
Advantages of Hong Kong for the IT business
You can easily set up any legitimate IT business in Hong Kong, with a few exceptions. You can provide consulting services, e-commerce, brokerage, etc.
Among the main advantages of Hong Kong is the financial benefit for international companies. The jurisdiction offers one of the lowest tax rates in the world, allowing companies to make good profits.
Other advantages are as follows:
- You don't have to specify an exact maximum amount of share capital in the articles of incorporation.
- There is no need to pay VAT.
- Income tax depends on income. The first 2 million is taxed at 8.25%, then the tax rises to 16.5%.
- Ability to conduct international transactions via payment systems.
- Remote work of employees. IT people do not necessarily have to live in Hong Kong, although a physical office is required. There should be a secretary and a director (but they can be nominal). Other employees can work remotely.
- Qualified staff - in case you will be hiring locals, they are excellent in English and other languages.
Proximity to China
Another plus for opening an IT company in Hong Kong is the proximity to China. The world's second-best economy has made it as easy as possible for Hong Kong businesses to access its market by signing the Agreement on Close Economic Partnership. China is now Hong Kong's largest trading partner, and it is also actively cooperating in the field of digital technology, providing first-class marketing.
It's also worth noting the liberal immigration policy in Hong Kong. Citizens of most countries can come to Hong Kong without a visa for a period of 7 to 180 days. A business owner can come there from time to time to sign contracts and conduct business negotiations.
But if you plan to set up a full-fledged office there and actually live in Hong Kong, it is necessary to get an investor visa. It is given to foreign specialists who intend to live in the country for a long time. A permanent resident visa is needed if you plan to stay there permanently. It can be obtained in 7 years after the move.
Employees who move to Hong Kong must get a work visa. The first one is issued for one year and then for two years. It is not allowed to move in before the work visa is obtained.
Disadvantages of Hong Kong
The main disadvantage of the jurisdiction is the long and complicated bank account opening process. If you try to do it yourself, you will probably lose a lot of time and money, and the result is rather unpredictable.
The fact is that when you apply for an account opening, all the directors of the company must come to the bank office. Also, the officer will require a lot of certificates and proof that the business is legitimate. You will have to make an earnest money deposit, present the board of directors' decision, founding documents, a business plan, and more. We recommend contacting the specialists of IT-OFFSHORE right away to solve the issue in the quickest possible way.
Among other disadvantages we can mention tough conditions for fintech companies. The rules for them are very strict, starting with the funding process, and the work is closely monitored. On the other hand, such control has a positive effect on the company's image, because it confirms its reliability for the business partners, clients, and financial institutions..
How to quickly relocate the IT business to Hong Kong
Contact our experts to quickly move your IT business to Hong Kong in 2022 without any issues.