What is the corporate tax rate?

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

Is there capital gain tax?

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

Is there withholding tax?

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

How many Double Taxation Agreements (DTAs) have Hong Kong signed?

Over 50 DTAs as of December 2025

What tax incentives are available?

Research and Development (“R&D”) Enhanced tax deductions for qualifying R&D expenditure Tax concession (at 5% tax 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 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

What is the general Hong Kong Salaries Tax (“HKST”) principle?

Hong Kong adopts a territorial basis of taxation. Individuals, whether resident or non-resident, are subject to HKST on (i) Income from Hong Kong-sourced employment (ii) income from an office held in HK (e.g., company director) (iii) 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

What is the maximum HKST rate?

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

Are there any special incentives for Hong Kong individuals working in the GBA?

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.

What types of business entities can be set up?

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.

What are the requirements for directors, shareholders, and secretary?

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

How long does incorporation take?

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

What is the minimum share capital?

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.

What are the requirements for a company name?

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".

Is a physical registered office required?

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.

What are the general compliance obligations?

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

What are the common exit options?

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

What are typical salary ranges and payroll expenses?

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.

Are employers required to contribute to social security/provident funds?

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.

What mandatory employee benefits apply?

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.

How do payroll costs compare with Mainland China?

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.

Immigration and Residency in Hong Kong

A) 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 B) 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) C) Visas for family members: (i) Dependant visa

5 January 2026

For internationally active businesses, the Greater Bay Area (GBA) stands out as one of the most compelling growth opportunities globally. With its scale, connectivity, and strong innovation ecosystem, the GBA offers significant potential that should not be overlooked. Among the available gateways, Hong Kong remains the most effective entry point, combining its position as a leading international financial hub with direct and established links to mainland China.

While the GBA is sometimes perceived as a complex market, the scale of opportunity outweighs the challenges. These risks can be mitigated through robust compliance practices and a dual-hub strategy that leverages Hong Kong alongside Singapore. This approach delivers both access and resilience, enabling businesses to enter the GBA region with confidence.

In the following sections, we will provide practical guidance on (1) tax framework, (2)company incorporation, and (3) HR & payroll considerations in Hong Kong — equipping businesses with the insights needed to make informed decisions.

Section 1: Tax Framework
What is the corporate tax rate?	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
Are there Value-Added Tax (VAT), Goods and Services Tax (GST) or Sales Tax?	No
Is there capital gain tax?	No. A safe harbour rule applies for certain shares disposals.
Is there withholding tax?	No, in general, but royalty fees paid to non-Hong Kong residents may be subject to withholding tax.
How many Double Taxation Agreements (DTAs) have Hong Kong signed?	Over 50 DTAs as of December 2025
What tax incentives are available?	Research and Development (“R&D”) Enhanced tax deductions for qualifying R&D expenditure Tax concession (at 5% tax 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 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
What is the general Hong Kong Salaries Tax (“HKST”) principle?	Hong Kong adopts a territorial basis of taxation. Individuals, whether resident or non-resident, are subject to HKST on (i) Income from Hong Kong-sourced employment (ii) income from an office held in HK (e.g., company director) (iii) 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
What is the maximum HKST rate?	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
Are there any special incentives for Hong Kong individuals working in the GBA?	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
What types of business entities can be set up?	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.
What are the requirements for directors, shareholders, and secretary?	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
How long does incorporation take?	E-filing: 1–2 hours Paper filing: 3–5 working days
What is the minimum share capital?	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.
What are the requirements for a company name?	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".
Is a physical registered office required?	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.
What are the general compliance obligations?	Annual return, business registration renewal, audit on financial statements, employer’s tax filings, and profits tax filings on an annual basis.
What are the common exit options?	Voluntary winding-up or deregistration for solvent companies that have ceased business.

Section 3: Payroll Costs
What are typical salary ranges and payroll expenses?	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.
Are employers required to contribute to social security/provident funds?	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.
What mandatory employee benefits apply?	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.
How do payroll costs compare with Mainland China?	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.
Immigration and Residency in Hong Kong	A) 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 B) 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) C) Visas for family members: (i) Dependant visa

Navigating Risks and Opportunities in the GBA

The risks and opportunities of the GBA must be assessed together. Regulatory complexity and geopolitical sensitivities require strong compliance and ongoing monitoring. At the same time, diversification through a dual-hub model ensures stability without sacrificing access to growth.

Hong Kong remains the leading gateway into the GBA, offering unmatched connectivity and financial infrastructure. Singapore complements this position by providing a secure base for regional operations. Unlike most firms, we operate as one integrated team across both hubs — aligning perspectives and offering the flexibility needed to seize opportunities in the GBA.

Together, we help ensure risks are managed, and your entry into the GBA is positioned for long-term success.