Section 1: Tax Framework

• 16.5% for corporations or Hong Kong branches of foreign companies
• 8.25% on the first HK$2 million of assessable profits
• Profits sourced outside Hong Kong may be tax-exempt under the territorial tax system 

• No

• No. A safe harbour rule applies for certain shares disposals. 

• No, in general, but royalty fees paid to non-Hong Kong residents may be subject to withholding tax. 

• Over 50 DTAs as of December 2025

Research and Development (“R&D”) 

• Enhanced tax deductions for qualifying R&D expenditure
• Tax concession (at 5% rate) for patent box  

Funds, wealth management, and financing 

• Tax exemption for qualifying fund investments
• Tax exemption for single family offices  
• Tax exemption for qualifying carried interest (Performance fees)
• Tax exemption for gains from qualifying debt instruments Concession for qualifying corporate treasury centers
• Tax concession (at 8.25% tax rate) for qualifying corporate treasury centers

Capital expenditure and specific industries 

• Full deduction in the first year for capital expenditure on manufacturing plant and machinery, computer hardware and software, environmental protection facilities, and specified environmentally friendly vehicles
• Tax concession/ exemption for reinsurance and captive insurance, aircraft leasing, ship leasing, and shipping-related activities industries

Hong Kong adopts a territorial basis of taxation. Individuals, whether resident or non-resident, are subject to HKSTon 

1. Income from Hong Kong-sourced employment
2. Income from an office held in HK (E.g. Company Director)
3. Income from a Hong Kong pension

Employers: 

• File Employer’s Returns to report employees’ remuneration
• Notify the Inland Revenue Department (IRD) of any commencement, cessation or departure cases.
• No obligations to withhold HKST, except when an employee ceases employment and leaves Hong Kong permanently

Employees: 

• File an annual Individual Tax Return
• Declare income and claim applicable allowances and deductions
• HKST is paid directly by the employee 

The lower of the two calculations applies:

• Progressive rates of 2%, 6%, 10%, 14% and 17% for different income bands; or
• Standard rates of 15% on the first HK$5 million of net income and 16% on the remainder 

• The nine Mainland cities within the GBA provide tax relief to non-Mainland individuals, (including those from Hong Kong, Macau, and Taiwan) who are classified as high-end talents or talent in short supply. The relief effectively offsets the difference between the individual income tax payable in Hong Kong and the Mainland and is exempt from individual income tax. Eligibility criteria and implementation details are determined by each respective city. 

Section 2: Company Incorporation 

Common business structures include:

• Private Company Limited by Shares (most common)
• Public Company Limited by Shares,  
• Company Limited by Guarantee (commonly used by non-profits)
• Unlimited Company
• Sole Proprietorship
• General Partnership
• Limited Partnership

Overseas companies may also register a local Hong Kong Branch. A Branch is not a separate legal entity but an extension of the foreign company operating in Hong Kong.

• At least 1 director (no nationality restrictions),  
• At least 1 shareholder (no nationality restrictions), and  
• 1 company secretary who must be a Hong Kong resident 

• E-filing: 1–2 hours
• Paper filing: 3–5 working days  

• Standard Structure: For a private company limited by shares (the most common type), the share capital is typically denominated in Hong Kong Dollars (HKD).
• Most common and recommended amount: HKD10,000.
• Minimum: There is no statutory minimum paid-up share capital. It can be as low as HKD 1.

• Companies Registry (CR) Requirement: The proposed name must not be identical to an existing name on the CR's index of company names. It must also comply with the guidelines set by the Companies Registry and may require special approval if it contains sensitive words (e.g., "Bank", "Trust", "Government").
• Language: A company can be registered with an English name, a Chinese name, or both. The English name must end with "Limited" and the Chinese name must end with "有限公司".

• A company must have a physical Registered Office Address in Hong Kong (P.O. box is not accepted) to which all communications and notices may be sent.
• Company secretary’s address can be your registered office address. Your operating office address can be different from your registered office address.

• Annual return, business registration renewal, audit on financial statements, employer’s tax filings, and profits tax filings on an annual basis.

• Voluntary winding-up or deregistration for solvent companies that have ceased business.

Section 3: Payroll Costs

• Entry-level: HKD 150k–600k/year
• Mid-level: HKD 500k–1m/year
• Senior-level: Over HKD 1m/year

Salary levels vary by industry and position, including statutory contributions and benefits. Total payroll expenses are generally estimated at 1.25x to 1.4x of  an employee's gross salary.

Employers are not required to withhold salaries tax on behalf of employees. 

• Yes, employers are required to contribute to the Mandatory Provident Fund (“MPF”) for employees aged between 18 and 64, except where  foreign employees are covered by an existing overseas pension scheme.

• Employee compensation insurance, MPF contributions, and statutory leave entitlements such as annual leave, sick leave, maternity leave, and paternity leave as per the Employment Ordinance.

• Labour costs in HK are generally higher, particularly for skilled and professional roles than in Mainland China. However, Hong Kong remains committed to developing its local workforce while attracting top overseas talent seeking a dynamic and supportive environment for professional growth.

1. Visas for entrepreneurs and investors: (i) Top Talent Pass Scheme (TTPS); (ii) New Capital Investment Entrant Scheme (New CIES); (iii) General Employment Policy (GEP); (iv) Admission scheme for the second generation of Chinese Hong Kong permanent residents
2. Visas for employees: (i) Training visas; (ii) Working Holiday visa; (iii) Immigration Arrangements for Non-local Graduates (IANG); (iv) General Employment Policy for professionals; (v) Technology Talent Admission Scheme (TechTAS)
3. Visas for family members: (i) Dependant visa