Tax Haven : Hong Kong

Tax Haven : Hong Kong

 Status

Hong Kong is one of two Special Administrative Regions (SARs) of the People's Republic of China (PRC), the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea.

Hong Kong became a colony of the British Empire after the First Opium War (1839–42).

Until 1842 Hong Kong was Chinese, but after the Opium War, the island of Hong Kong became British after the signing of the Treaty of Nanking (but just the island at first). In 1860, thanks to the Convention of Peking, England also retrieves the Kowloon peninsula and 240 others islands. In 1898 new territory was added to the list. China granted a 99-year lease to English. But during the Second World War, Hong Kong is then re-Japanese then re-English in 1945. On December 19, 1984 England promised to give back Hong Kong to China in July 1997. But Hong konger saw a dim view of the return of their territory to China and claimed their independence. Today the status of Hong Kong is somewhat ambiguous: we don’t know if it’s a state (they have their own currency, law, human rights are respected) or a Chinese province. However to China Hong Kong is a special administrative district.

 Economy

“What identifies an area as a tax haven is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance”

As one of the world's leading international financial centers, Hong Kong has a major capitalist service economy characterized by low taxation and free trade. The currency, Hong Kong dollar, is the eighth most traded currency in the world as of 2010.

It maintains a highly developed capitalist economy, ranked the freest in the world by the Index of Economic Freedom for 15 consecutive years.

It is an important center for international finance and trade, with one of the greatest concentrations of corporate headquarters in the Asia-Pacific region, and is known as one of the Four Asian Tigers for its high growth rates and rapid development

Hong Kong is often cited as an example of laissez-faire capitalism

Hong Kong is one of the leading trading centers in the world, therefore it is legitimately a jurisdiction in which large numbers of international companies have a business and even a banking presence. It is therefore not considered to be a tax haven in the true sense of the term because it does not derive its main source of revenue and income from providing tax efficient vehicles and shelters purely to external companies and individuals for the soul sake of taxation avoidance.

Rather Hong Kong is a low tax country with attractive tax rules applicable to local companies and entities which derive no source income in Hong Kong.

It is possible to establish a Hong Kong company or register an existing foreign company in Hong Kong and structure and manage affairs so that all business conducted through said company is done 100% tax free. In this way a Hong Kong company is much the same as many IBCs or offshore companies in jurisdictions around the world - however, the key difference

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