History and Location

Hong Kong is one of two special administrative regions of China, facing the South China Sea and on the eastern side of the Pearl River Delta. Thanks to its exceptional harbour and strategic location on the Far Eastern trade routes, Hong Kong enjoyed a prosperous entrepôt trade almost from the outset over 150 years ago. Historical and political events of the subsequent years led to the development of a manufacturing industry. The end of the twentieth century also saw a rapid expansion of its services sector, contributing over 90 per cent of Hong Kong’s GDP in recent years.

Legal System

The Hong Kong legal system operates under the framework of one country, two systems. The rule of law continues to be effectively enforced by a judiciary that is independent of the legislature and the executive.

Culture and Language

A former British colony, Hong Kong is an intoxicating mix of East and West, and provides an easy entry into China, with widespread use of English, particularly in commerce and government.

Taxes

Economically, Hong Kong enjoys minimal government interference, with few duties and tariffs on imported goods and minimal capital controls, including zero tax on dividends with no capital gains tax. The profits tax for incorporated companies is at an attractive level of 16.5%. This rate applies to Hong Kong-sourced profits derived from a business carried on in Hong Kong. Offshore profits, dividends, and most Hong Kong bank deposit interest income are exempt from tax.

Currency

The Hong Kong dollar is linked to the US dollar at HK$7.8 to US$1. There are no exchange controls or currency regulations.

Key Attractions

• The world’s freest economy
• Simple, low, territory-based tax system
• Leading international commercial and financial centre
• Rule of law with strict intellectual property protection
• Major gateway to China