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Why invest in Hong Kong?

Hong Kong is a dynamic international city serving as a primary gateway to Mainland China and Asia, and a hub for global and regional business. This makes it one of the most competitive and top international cities for companies, investors, and professionals.

Market Advantages

Hong Kong offers numerous market advantages, such as:

  • An open, fair, and efficient business environment

  • Competitive tax regime

  • Excellent legal and dispute resolution services under the rule of law

  • Proximity to markets in Asia, including mainland China

  • Leading global financial services center

  • Network of international free trade and tax agreements

  • World-class infrastructure with sophisticated support services

  • Highly skilled and multicultural talent pool and a liberal immigration policy

Efficient Business Landscape

Hong Kong’s economic system is defined as a free-market economy characterized by minimal government intervention, low taxation, free port trade, and a highly internationalized and modernized financial market. The city’s service-oriented economy, which accounts for more than 90 percent of its GDP, is especially strong in financial services, international trade, and tourism. Additionally, it has strong economic links to mainland China and other major economies in the Asia Pacific region.

The absence of exchange controls, a corruption-free government, and the free flow of information, capital, and talents have enabled Hong Kong to maintain a free and efficient business environment for commercial activities.

Hong Kong enjoys a strong reputation as a "free port" with streamlined customs clearance processes. The city imposes no tariffs on imported goods, has no import quotas, and applies excise duties to only four specific commodities: hard alcohol, tobacco, oil, and methyl alcohol.

Hong Kong Economic Indicators 2022-2023

Ease of Doing Business

Hong Kong ranked 3rd in the World Bank Group’s latest Ease of Doing Business Ranking 2020, a jump from the previous year’s 4th place. It ranked 1st for ease of dealing with construction permits, 2nd for paying taxes, and 5th for ease of starting a business. The Fraser Institute has also consistently ranked Hong Kong as the world's freest economy in its Economic Freedom of the World Annual Report.

Competitive Tax Regime

Businesses and individuals in Hong Kong enjoy one of the most tax-friendly systems in the world, with only three kinds of direct taxes:

  • Profits tax (for incorporated bodies)

  • Salaries tax (for personal income)

  • Property tax (for income sourced from Hong Kong property)

Unlike many other jurisdictions, Hong Kong adopts a territorial basis of taxation, meaning only income sourced from Hong Kong is taxable. There are also generous allowances and deductions to reduce the taxable amount.

Tax Type


Profits Tax (First HK$2M)


Profits Tax (Above HK$2M)


Unincorporated Businesses

7.5% for first HK$2M, 15% above HK$2M

Salaries Tax


Property Tax


Hong Kong has no turnover taxes, such as value-added or sales tax, making it favorable for profit shifting and re-invoicing.

Legal and Dispute Resolution Services

Hong Kong is home to approximately 850 local solicitor firms and more than 70 global law firms. The city's legal advisors are well-versed in different countries' legal and regulatory landscapes. Hong Kong's sound and independent legal system has made it a regional hub for dispute resolution, with the Hong Kong International Arbitration Centre rated the most preferred seat of arbitration outside Europe.

Proximity to Mainland China and Asian Markets

Hong Kong's ideal location in Asia enables businesses to tap into various opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and the rest of the region. The Mainland and Hong Kong Closer Economic Partnership Agreement (CEPA) signed in 2003 facilitates easier access to the mainland market for Hong Kong products and services. Overseas companies can also benefit from CEPA by establishing production lines in Hong Kong to manufacture goods that meet CEPA's rules of origin requirements.

Leading Financial Services Center

Hong Kong is a leading international financial center, home to many financial institutions. Its financial markets operate under effective and transparent regulations aligning with international standards. The city offers unique access channels to and from China, including various Stock Connect programs and the Mainland-Hong Kong Mutual Recognition of Funds arrangement.

Financial Services Advantage


Largest Offshore RMB Center

Offers a wide range of RMB financial services, including clearing, settlement, financing, asset management.

Banking Hub

Asia's most prominent banking hub for Chinese and international banks.

Corporate Treasury Centers (CTCs)

Ideal hub for corporate treasury activities with tax incentives for corporations.

Capital Market

Attracts international banks and securities houses, providing critical channels for raising equity and debt.

Asset Management

Largest international asset management hub in Asia, and a leader in private wealth and hedge fund management.

Fintech Hub

Promotes fintech development through Smart Banking Initiatives and the “Fintech 2025” strategy.

Infrastructure Investments

Facilitates linkage between infrastructure projects and global capital.

Green Finance

Deep, liquid bond market promoting green and sustainable finance initiatives.

Free Trade and Tax Agreements Network

Hong Kong has been actively expanding its Free Trade Agreement (FTA) and Double Taxation Avoidance Agreement (DTA) networks to secure favorable conditions for businesses operating in the SAR.

Free Trade Agreements

Hong Kong has signed FTAs with:

  • Mainland China (June 2003)

  • New Zealand (March 2010)

  • Member States of the European Free Trade Association (EFTA) (June 2011)

  • Chile (September 2012)

  • Macao (October 2017)

  • Association of Southeast Asian Nations (ASEAN) (November 2017)

  • Georgia (June 2018)

  • Australia (March 2019)

It has concluded FTA negotiations with the Maldives and started negotiations with Peru.

Double Taxation Avoidance Agreements

Hong Kong has signed comprehensive DTAs with 46 countries and is negotiating agreements with 14 others. These DTAs specify tax rates for dividends, interest, royalties, and technical fees that these countries can charge Hong Kong residents. The DTAs or the other country's domestic law outlines methods for eliminating double taxation, with the tax credit method being the most common.

World-Class Infrastructure and Support Services

Hong Kong provides some of the most advanced business infrastructures globally, with efficient public transport and world-class facilities. The Hong Kong International Airport is the world’s busiest cargo gateway, and the city is well-connected through the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hong Kong-Zhuhai-Macao Bridge.

Highly Skilled Talent and Liberal Immigration Policies

Hong Kong has a diverse talent pool with the skills and knowledge to drive business locally and beyond. The city is home to 22 degree-awarding higher education institutions, with four universities featured in the QS World University Rankings top 100 list. Most business professionals are bilingual or trilingual, speaking English, Cantonese, and Mandarin.

Hong Kong has a liberal immigration policy, allowing visa-free visits for citizens from about 170 countries and territories for 7 to 180 days.

Why Foreign Companies Relocate to Hong Kong

Foreign investors consider various factors when choosing Hong Kong as a potential relocation destination, including infrastructure, geographical location, the availability of skilled talent, access to raw materials, incentive programs, logistical capabilities, and cost-efficient operations due to simple and low taxes.

Summary: Top 10 Reasons to Invest in Hong Kong

  1. Proximity to China and Asia Markets: Ideal location in Asia that enables businesses to tap into various opportunities in the Greater Bay Area and throughout the region.

  2. Competitive Tax Regime: Offers one of the most tax-friendly systems in the world with low profits tax.

  3. Ease of Doing Business: Defined as a free-market economy characterized by minimal government intervention.

  4. Network of DTAs: Provides a mechanism to mitigate the challenge of double taxation faced by global investors.

  5. Leading Global Financial Services Center: Operates under effective and transparent regulations that align with international standards.

  6. World-Class Infrastructure: Some of the most advanced business infrastructures globally, with efficient public transport.

  7. Highly Skilled Talent Pool: Equipped with skills and knowledge to drive businesses.

  8. Improving Data Privacy Protection: Efforts to improve data privacy protection within the jurisdiction.

  9. Excellent Legal and Dispute Resolution: China’s only common law jurisdiction with well-established commercial case law.

  10. Thriving Services Industry: One of the most services-oriented economies globally, accounting for over 90 percent of GDP in 2022.

Can Woodburn help you?


Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.

Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.


Talk to an expert

Schedule a 30-mins complimentary, no-obligation call to see how Woodburn can help you. Book a call with our Head of Business Advisory - Kristina Koehler-Coluccia.

Topics we can advise on include:

  • Company Registration

  • Cloud Accounting & Financial Reporting

  • Cloud Payroll Services

  • Tax & Audit Services

  • Recruitment

  • Employer-of-Record

  • Visa Application

  • Trademark Registration

  • Switch to Woodburn

  • Partner with Woodburn (cross referral) 

Our calls are automatically scheduled via Zoom - or via Teams, WeChat or WhatsApp upon direct request. 

Our advisory calls are available from Monday-Friday from 8am to 5pm CEST and Wednesday until 9pm CEST.



Woodburn Accountants & Advisors is one of China and Hong Kong’s
most trusted business setup advisory firms

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