A Hong Kong private company limited by shares can be owned and directed from anywhere, but it needs a company secretary and a registered office in Hong Kong, files audited accounts every year, and is neither a visa nor a bank account. Hong Kong taxes only profits that arise in Hong Kong: 8.25% on the first HK$2 million of assessable profits and 16.5% above. Profits tax on offshore profits can be zero, but only if the Inland Revenue Department (IRD) accepts the claim on the facts. Your personal tax where you live is a separate question.
Four businesses, one idea
In the videoEach of them reaches a point where Hong Kong helps. And a point where it stops.
The video follows four people. They are illustrative examples, not clients, and they stand for four ways money moves: services sold across borders, goods bought in China, software sold into Asia, and an owner after the sale of her firm.
The three questions we ask in every case
- Who pays whom?
- In which currency?
- From where is the work actually done?
It depends less on your industry than on how your money moves. Keep an eye on the third question. Answer all three in the Fit Check →
What a Hong Kong company actually is
In the videoOwning it isn't living there.
- You do not have to live in Hong Kong to own or direct a Hong Kong company. One shareholder is enough.
- It needs at least one director who is a natural person, not only another company. Any nationality, and the director may live abroad.
- Two things must be in Hong Kong: a registered office, and a company secretary who either ordinarily resides in Hong Kong or is a company with its office in Hong Kong. A sole director cannot also be the company secretary.
- It is not a visa. The company gives you no right to live or work in Hong Kong.
Source: Companies Registry, Incorporation FAQ · Companies Registry, Directors and company secretary FAQ · checked 4 Oct 2026
The consultant living in Thailand
In the videoHong Kong's tax office will ask one question first: where was the work done?
Daniel is forty-seven, lives in Chiang Mai and sells consulting to clients in Germany and Australia. If you run an agency, a software studio or a creator business, your setup looks much the same: you sell your work across borders.
Where it helps
- He can own and direct the company from Thailand.
- His clients sign with a proper company, not with a man on a laptop.
- He may be able to hold euros and Australian dollars, depending on the bank or provider and on his profile. Possible, not promised.
Where it stops
- The company does not move Daniel. He still lives in Chiang Mai, and he still does the work there.
- That answer matters twice: once for Hong Kong, once for Thailand (chapter 5).
The online seller and China
In the videoIt fits a business that already runs through Asia.
Follow one box of Sara's kitchenware. It is made in Shenzhen, just across the border, and sold to a customer in France or Texas. Her Hong Kong company sits in the middle: it buys from the factory, sells to the customer and keeps the margin.
Where it helps
- Hong Kong is the trading city next to her factory, and the Hong Kong dollar is pegged to the US dollar.
- For trading profits, the IRD looks at where the contracts of purchase and sale are made.
Where it stops
- Selling to customers abroad is not enough on its own. If the work is done in Hong Kong, the profit is taxed in Hong Kong.
- If Sara bought in Poland and sold in Germany, Hong Kong would just be a detour.
- Her real wall comes later, at the bank (chapter 8).
Source: IRD, Territorial source principle · IRD, DIPN 21 · HKMA, Linked Exchange Rate System · checked 4 Oct 2026
How Hong Kong taxes a company, and the offshore zero
In the videoThat zero isn't a package you buy when you incorporate. It's a conclusion about your facts.
| Rule | Condition | Source |
|---|---|---|
| Two-tier profits tax: 8.25% on the first HK$2,000,000 of assessable profits, 16.5% on the rest | Profit, not revenue. In a group of connected companies, only one can elect the lower rate, also when one individual controls them. | IRD Profits Tax, IRD two-tiered rates FAQ |
| Only profits arising in or derived from Hong Kong are taxed; profits arising abroad are not taxed, even if remitted to Hong Kong | The source is decided on the facts, by the IRD | IRD Territorial source principle |
| The test: what the company did to earn the profit, and where | Services: where the services are performed. Trading: where the contracts of purchase and sale are made. Not the test: where your customer or your bank is. | IRD DIPN 21 |
| Burden of proof | The company must prove an offshore claim with documents. With a principal place of business in Hong Kong, offshore profits are rare. | IRD DIPN 21 (paras. 56, 60) |
Source: IRD, Profits Tax · IRD, DIPN 21 (Revised 2012) · checked 4 Oct 2026
The offshore zero, with its conditions
Hong Kong profits tax on offshore profits can be zero, but only if the IRD accepts the offshore claim. Offshore means the work that earns the profit was done outside Hong Kong, and you prove it with documents. If your real base is in Hong Kong, it is the exception.
It says nothing about tax where you live. Your country of residence, the place where the company is really managed and controlled-foreign-company rules decide that separately.
Daniel's twist: offshore for Hong Kong doesn't mean taxed nowhere
Daniel does all of his work in Thailand. For Hong Kong, that can help his offshore claim. Thailand looks at the very same fact, and it can make that profit taxable in Thailand. This is simplified: the outcome depends on where you live and where the company is managed. Our Thailand LTR video covers the Thai side ↗
The software founder in Sydney
In the videoWhere it's registered doesn't decide this. Where it's really run does.
Liam builds software in Sydney, and his customers are in Singapore, Tokyo and Hong Kong. For him, a Hong Kong company is a base in Asia, right next to the people who pay him, and one company to bill in US dollars.
Here is where it stops. If Liam keeps making all the big decisions from Sydney, Australia can treat his Hong Kong company as an Australian tax resident: the Australian Taxation Office looks at where central management and control is really exercised. We do not advise on Australian tax; talk to an adviser there.
Source: Australian Taxation Office, Working out your residency (TR 2018/5, PCG 2018/9) · checked 4 Oct 2026
The owner who just sold her firm
In the videoRuth's first question isn't really Hong Kong. It's where she wants to live in three years.
Ruth is fifty-nine, lives near Munich and has just sold her engineering firm. She isn't chasing a zero at all. She will keep advising clients in Singapore and Shanghai, and her plan is two Hong Kong companies: one for the advice, one to hold investments.
- She controls both companies, so only one of them gets the lower 8.25% rate.
- While she lives in Germany, German rules can tax certain passive income of a foreign company she controls if that income is taxed below 15%. Many countries have similar rules.
Residence first, structure second. We do not advise on German tax; we work alongside your adviser there.
Source: IRD, two-tiered rates FAQ · German Foreign Tax Act, § 8 AStG · checked 4 Oct 2026
Banking: a company is not a bank account
In the videoNobody can promise you an account. That decision belongs to the bank.
Opening a Hong Kong company does not open a bank account. Each bank makes its own decision, case by case. What banks typically want to know, varying by bank:
- who owns and controls the company,
- where the money comes from,
- who your customers and suppliers are, and in which countries,
- often a meeting with the director.
Payment providers can be faster for non-residents, but they are not banks, and they can say no too. For a seller like Sara, with money moving in three currencies, those answers decide it.
What we doAs part of company formation, we assist with bank account opening: we prepare the company documents and the business profile banks typically ask for. The bank decides; we cannot promise an account.
Source: Hong Kong Government, LCQ11: bank account opening (14 Nov 2018) · checked 4 Oct 2026
The boring part: audit and yearly duties
In the videoEasy to set up doesn't mean zero maintenance.
The part nobody puts on a thumbnail. These are the official duties and government fees; Strasia's own fees come in a written offer before any order.
| Duty | Official fee or rule | Source |
|---|---|---|
| Audited financial statements, every year | Filed with the profits tax return by every active company, also a small one; only a formally dormant company is exempt | IRD, Companies Registry |
| Annual return (NAR1) | Within 42 days after the incorporation anniversary. HK$105 on time; late fees HK$870, HK$1,740, HK$2,610 or HK$3,480 depending on the delay | Companies Registry |
| Business registration | HK$2,350 for a one-year certificate from 1 April 2026 (fee HK$2,200 plus levy HK$150) | IRD fee table |
| Company secretary and registered office in Hong Kong | Kept for as long as the company exists; a sole director cannot be the secretary | Companies Registry |
| Significant controllers register | Kept in Hong Kong; not public, but open to law-enforcement officers | Companies Registry |
| Incorporation (once) | HK$1,545 government fee for electronic filing | Companies Registry |
Source: Companies Registry · IRD, Business Registration fee and levy table 2026/27 · checked 4 Oct 2026
Every deadline with a calendar for your incorporation date: Hong Kong annual compliance guide.
Who shouldn't open a Hong Kong company
In the videoThe answer is never a person. It's a reason.
- No real link to Asia or international trade. Your customers, suppliers and work are all in one country. A company at home is usually simpler.
- You hope it ends your tax where you live. On its own, it won't.
- Your plan only works if nobody finds out. Since 2018, Hong Kong has automatically exchanged financial account information with other tax authorities.
Source: IRD, Automatic Exchange of Financial Account Information · checked 4 Oct 2026
Where that leaves the four
| Case | Verdict |
|---|---|
| Liam | Fits, if the company is really run in Asia |
| Sara | Fits, if a bank or a provider says yes |
| Ruth | Fits, once she has decided where she will live |
| Daniel | The real question was never Hong Kong; it was Thailand. Ways out: plan for Thai tax from day one; or spend less than 180 days a year in Thailand, so Thailand does not treat him as tax resident; for some people, Thailand's 10-year LTR visa changes the picture under strict conditions. |
Source: Thai Revenue Department, Revenue Code (s. 41) · checked 4 Oct 2026
Hong Kong, Singapore, UAE or a US LLC?
In the videoStart with what you actually do. Not with the lowest number on a tax infographic.
| Option | Company tax | Must know | Fits when |
|---|---|---|---|
| Hong Kong | Profits tax 8.25% / 16.5%; offshore claims checked case by case | Audit every year; secretary and office in Hong Kong | Your business already runs through Asia |
| Singapore | Corporate income tax 17%, reduced by a partial exemption on the first S$200,000 of chargeable income; a start-up exemption for qualifying new companies | At least one director ordinarily resident in Singapore; small companies can be exempt from audit | You want a base for Southeast Asia |
| UAE | Corporate tax 9% on taxable income above AED 375,000; a lower free-zone rate only on qualifying income of a Qualifying Free Zone Person | No personal income tax under current rules; every taxable person registers and files | You will actually live there, not just register there |
| US LLC (non-US owner) | Profit passes through to the owner; US tax only on income effectively connected with a US business, depending on the facts; otherwise taxed where you live | Yearly Form 5472 with a pro forma Form 1120; US citizens are taxed by the US on worldwide income | Your customers and payment platforms are in the US |
Source: IRD · IRAS · ACRA, setting up a local company · ACRA, audit exemption · UAE Ministry of Finance · UAE FTA, Free Zone Persons guide · IRS, ECI · IRS, Form 5472 instructions · IRS, US citizens abroad · checked 4 Oct 2026
In every column, tax where you live is a separate question. Deeper reading: Singapore corporate tax 2026 · US LLC: Form 5472 · Compare all nine jurisdictions · Singapore corporate tax video ↗
Which setup fits you? The Hong Kong Fit Check
In the videoYour business first. Where you live second. The company last.
Download the Hong Kong Fit Check (PDF, 12 pages) · the worksheet with the three questions, the four cases and a score. No email needed.
Prefer to write? hongkong@strasia-group.com (subject: HK) · WhatsApp · Free first consultation. If the answer is no, we'll tell you.
Frequently asked questions about a Hong Kong company
Can a Hong Kong company pay zero profits tax?
Only on offshore profits, and only if the Inland Revenue Department accepts the claim. Hong Kong taxes profits that arise in Hong Kong: for services, the source is where the work is performed; for trading, where the contracts of purchase and sale are made. The company has to prove an offshore claim with documents. The zero concerns Hong Kong profits tax only; how you are taxed where you live is a separate question.
Do I have to live in Hong Kong to own a Hong Kong company?
No. Non-residents can own and direct a Hong Kong private company; one shareholder and one director who is a natural person are enough. The company needs a company secretary based in Hong Kong and a registered office in Hong Kong. It is not a visa and gives no right to live or work in Hong Kong.
Does a Hong Kong company come with a bank account?
No. Opening the company does not open a bank account. Each bank decides case by case and typically asks who owns and controls the company, where the money comes from and who the customers and suppliers are. We assist with the application, but nobody can promise an account.
Does a small Hong Kong company need an audit?
Yes. Every active Hong Kong limited company files audited financial statements with its profits tax return every year, also a small one; only a formally dormant company is exempt. On top come the annual return within 42 days after the incorporation anniversary (HK$105 if filed on time) and the yearly business registration fee (HK$2,350 for a one-year certificate from 1 April 2026).
Hong Kong, Singapore, UAE or a US LLC: which is better?
None is better in general. Hong Kong fits a business that already runs through Asia; Singapore fits a Southeast Asian base and needs a director who lives in Singapore; the UAE fits when you will actually live there; a US LLC fits customers and payment platforms in the US. In every case, tax where you live is a separate question.
More videos and guides
Download the Hong Kong Fit Check (PDF, 12 pages)
Thailand 10-Year LTR Visa: Who Gets In, Your Family, Your Taxes
The Thai side of Daniel's story: who qualifies and how foreign income is taxed. On YouTube ↗
Video · SingaporeSingapore Corporate Tax 2026: The New 400% AI Deduction Explained
If Singapore fits better: the 17% rate, exemptions, rebate and filing deadlines. On YouTube ↗
Guide · Hong KongHong Kong limited company: your annual compliance calendar
Audit, profits tax return, annual return and business registration, with a calendar.
Service · Hong KongHong Kong company formation
How we set up and look after a Hong Kong company, with accounting and bank account opening assistance.
Review note
- Editorial
- Strasia Group
- Sources
- IRD, Companies Registry, HKMA, IRAS, ACRA, UAE MoF and FTA, IRS, ATO, Thai Revenue Department; checked 4 Oct 2026
- Updated
- Next review
- after the Hong Kong Budget 2027-28
Official sources
- IRD · Profits Tax
- IRD · Two-tiered profits tax rates FAQ
- IRD · Territorial source principle
- IRD · DIPN 21, Locality of profits
- IRD · Completion of profits tax returns
- IRD · Business Registration fee and levy table
- IRD · Automatic exchange of financial account information
- Companies Registry · Incorporation FAQ
- Companies Registry · Directors and company secretary FAQ
- Companies Registry · Annual return, private company
- Companies Registry · Accounts and audit FAQ
- Companies Registry · Significant controllers register FAQ
- HKMA · Linked Exchange Rate System
- Hong Kong Government · LCQ11 (2018), bank account opening
- Australian Taxation Office · Company residency
- German Foreign Tax Act · § 8 AStG
- Thai Revenue Department · Revenue Code
- IRAS · Corporate income tax rates and exemptions
- ACRA · Setting up a local company
- UAE Ministry of Finance · Corporate tax
- IRS · Instructions for Form 5472
Change log
- published with the video