HONG KONG

　　Offshore profits tax free

　　Major international trade, financial and banking centre

　　Popular international corporate headquarter

　　INTRODUCTION

　　Hong Kong is a former British dependent territory and became the Hong Kong Special Administrative Region (“HKSAR”) of the People's Republic of China on 1 July 1997. The terms of the Basic Law guarantee the capitalist economic framework of Hong Kong for fifty years after the handover date. Hong Kong continues to enjoy a high degree of autonomy except in defence and foreign affairs. The official languages are English and Chinese.

　　Hong Kong remains a relative powerhouse in the world trade, financial and banking services given a small population of 6 million. Hong Kong is the world's ninth trading economy and the third largest financial centre. More than 3,200 international corporations have established regional headquarters or offices in Hong Kong. Hong Kong also is the most significant gateway into China.

　　LAW AND TAXATION

　　Hong Kong's corporate law is strongly based on British common law. Hong Kong is a low tax jurisdiction. Taxes are levied on profits, salaries and property with rates varying between 16-17.5%. There are also various Stamp Duties and Capital Duties. There is no capital gain or any form of dividend or withholding tax.

　　Only profits derived in Hong Kong are assessable for taxation and genuine offshore transactions are not subject to Hong Kong tax. Corporate profits tax rate is 17.5%. Subject to specific personal allowances, salaries tax is levied on a graduated scale up to a maximum overall rate of 16%. Property tax is charged on rents derived from land and building located in Hong Kong. Transfer of shares in a Hong Kong company is subject to stamp duty at 0.1% each for both the transferor and the transferee on the considerations paid or the fair market value whichever is higher. Transfer of land and building located in Hong Kong also must pay stamp duty. The maximum rate is 3.75%. No duty is payable in case if the transfer is wihin a group of companies with 90% common ownership. Capital duty of 0.1% is payable on the nominal value of shares in a Hong Kong company and on any increase of authorized capital or issuance of shares at a premium. The cap is HK$30,000 per case.

　　LOCAL INFRASTRUCTURE

　　There are in excess of 480,000 companies incorporated in Hong Kong. Numerous banks, stockbrokers and finance houses as well as all the major international legal and accounting firms are present in Hong Kong. The banking system in Hong Kong which is designed to assist the international business community is extremely dynamic and efficient. Hong Kong dollar is linked to the US dollar at the rate of HK$7.80 to US$1. There is no exchange control.

　　CORPORATE REQUIREMENTS

　　Company names may be expressed in both English and Chinese characters.

　　Each Hong Kong company must have a local secretary and a local registered office which must be a physical address and not just a post office box.

　　Each company must have at least one director and corporate director is permitted for companies that are not subsidiaries of public listed companies. Each company must have at least one shareholder and corporate shareholder is permitted.

　　Director and shareholder can be the same person or legal entity with no restriction on nationalities. Details of the company’s Director(s), Shareholder(s), Secretary and Registered Office must be filed at the Companies Registry and are on public record.

　　All companies must submit an annual return, obtain a Business Registration Certificate and file a set of audited accounts on an annual basis. Penalties apply for late filings.