Hong Kong is China’s Special Administrative Region and the differences between the legal and economic systems used in the two countries have played a historic role in the development of the two regions. Today, Hong Kong’s benefits for investors
and openness towards international trade are two important characteristics that determine investors to choose the Special Administrative Region instead of Mainland China.
The company formation requirements in Hong Kong
are essentially different from China, an important aspect being that foreign investors in Hong Kong
can establish any type of company while in China they are allowed full foreign ownership only for some types of companies.
The following video is a concise description of how the two jurisdictions compare:
Company formation in Hong Kong
Foreign investors in Hong Kong enjoy a modern business climate that welcomes trade and investments. Company registration in Hong Kong is very straightforward and can take as little as a few days if all the company incorporation documents are in order.
Many companies have opened branches
or subsidiaries in Hong Kong
and investors are also opening start-ups in the city. Among the many advantages Hong Kong has to offer, one of the most important is the city’s low taxation regime
The differences between China and Hong Kong are not only limited to the One Country, Two Systems principles, they also include:
- different legal system: Hong Kong has its own court system;
- different currency: the Hong Kong dollar vs the Chinese Yuan
different trade and import policies: Hong Kong has a free trade policy
while China imposes stricter rules;
- different telecommunications policies: as far as internet access is concerned, China has stricter filtering policies;
- different influences: the Chinese take pride in their culture, however, Hong Kong has been heavily influenced by the British during the occupancy;
- cultural and business policies and customs are different in Hong Kong and in China, a difference that is also related to cultural influence.
Company formation in China
Foreign investors in China can open the Wholly Foreign Owned Company. This business structure allows them to have full ownership. Other options are also available to foreign entrepreneurs who want to enter into a business partnership with an existing Chinese company or for international corporations who are interested in mergers and acquisitions in China.
Because English is not an official language in China as it is in Hong Kong, first-time investors in China might face some hurdles because of the language barrier.
If you would like to invest in Asia and this is your preferred jurisdiction, our experts can help you open a Hong Kong company
. You can contact us
if you have any questions about the company set-up procedure.