Exit taxation on unrealised gains may arise in your home country
Timing and asset structuring should be planned 12–18 months in advance
Risk of establishing an effective place of management in the home country.
CFC rules may attribute the Hong Kong company’s profits to the shareholder
Hong Kong is a special administrative region of China on the southern coast near Shenzhen. It has around 7.5 million inhabitants and uses the Hong Kong dollar (HKD).
For tax purposes, a territorial principle applies. Profits tax is only charged on profits earned in Hong Kong or sourced from Hong Kong. The corporation tax rate is 8.25% on the first HKD 2,000,000 (approx. EUR 217,225) of assessable profits and 16.5% on profits above that (a two-tier system).
There is no withholding tax on dividends and interest. However, royalty payments to non-residents may fall under a so-called “deemed profit” regime, which can lead to effective tax rates typically between 2.475% and 4.95%. In related-party structures, in some cases even 100% of the royalty payment may be treated as taxable.
Value added tax. Hong Kong has no VAT, GST or sales tax system. A VAT number is therefore not applicable.
Hong Kong has tightened its foreign-sourced income exemption (FSIE) rules under European pressure. For multinational groups, certain foreign passive income received in Hong Kong may be taxable unless sufficient economic substance or participation conditions are met. Traditional holding structures therefore now need to be properly structured and documented.
In addition, a 15% minimum tax framework has been introduced for large multinational groups (from roughly EUR 750 million in group turnover). This includes the Hong Kong Minimum Top-up Tax (HKMTT), with reporting via the IRD Pillar Two portal since 19 January 2026. Privately held structures are generally not affected, provided they are not part of a large group.
If your business activity is genuinely international in focus, Hong Kong can make sense as a holding, treasury or coordination hub. If the company is effectively managed from Germany, France or another high-tax country, POEM, CFC or substance rules can wipe out the tax advantages.
Contact us for an individual assessment and, where appropriate, better alternative solutions.
Hong Kong does not have a VAT or sales tax system. A VAT number is not provided for.
A director does not have to be resident in Hong Kong.
However, a company secretary is mandatory. If this is a natural person, they must ordinarily be resident in Hong Kong. If it is a legal person, it must have an office in Hong Kong and will usually need to be licensed as a TCSP provider.
A local business address in Hong Kong is required by law.
Yes. Hong Kong is a major international financial centre. However, bank onboarding is compliance-heavy, especially for HNWI structures and cross-border payment flows.
No. Hong Kong is not on the EU list of non-cooperative tax jurisdictions.
Yes. Incorporation can be completed electronically via the Companies Registry portal.
Usually 1–2 working days with complete documents and KYC checks.
| Tax Burden | Banking | Reputation | Bureaucracy | Legal Security | Costs | |
|---|---|---|---|---|---|---|
| Hong Kong | 0% |
|
|
|
|
from EUR 1,900 |
| USA | 21-0% |
|
|
|
|
from EUR 1,900 |
| Singapore | 0% |
|
|
|
|
from EUR 2,950 |
| Cyprus | 15% |
|
|
|
|
from EUR 1,900 |
| Malta | 5% |
|
|
|
|
from EUR 2,500 |
| Ireland | 12,5% |
|
|
|
|
from EUR 1,950 |
| Trust | 0% |
|
|
|
|
from EUR 4,900 |
| England | 25-19% |
|
|
|
|
from EUR 1,000 |
Your country of residence may impose tax and reporting obligations for foreign business activities and dividend income — in some cases even if profits are not distributed.
Depending on your personal circumstances, a suitable holding structure may be required to comply with tax rules and avoid unnecessary tax risks.
To determine which jurisdiction and structure best meet your requirements, please use the contact form and describe your plans in as much detail as possible.
Our advisers will be happy to review your case and advise you accordingly.
