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Taxation of Branches in Hong Kong

Updated on Friday 03rd November 2017

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Taxation-of-Branches-in-Hong-King.jpgThe branch is a business vehicle used by foreign companies that want to set up their presence in Hong Kong. Their registration, as well as the taxation of branches in Hong Kong,  is subject to the applicable company laws in the city.
 
Our team who specializes in company registration in Hong Kong can give you details about the taxation of this type of establishment but also about the registration and reporting requirements for branches.
 

Hong Kong branch taxation

 
Hong Kong has a territorial taxation system, meaning that only the income derived from the city is taxed at the normal corporate income tax rate. Branches in Hong Kong are taxed at the same rate as subsidiaries, namely at the 16.5 percent rate.
 
Hong Kong does not impose withholding taxes on dividends and interest and does not levy a branch remittance tax. Branches are not subject to the stamp tax. An expanding network of double tax treaties protects foreign investors from paying income taxes both in their country of origin and in Hong Kong. 
 
Investors who want to open a Hong Kong company and need more information about the principles of taxation can talk to one of our experts.
 

Other requirements for branches in Hong Kong

 
Branches are subject to taxation in Hong Kong, however, they must also observe the registration requirements with the Companies Registry and the Business Registration Office. Branches in Hong Kong file annual returns and updated audited accounts.
 
The branch is not an independent legal entity and does not have limited liability. Because it is not separate from the foreign company abroad, investors should be aware of the liabilities that may arise when registering and operating a branch office in Hong Kong. Some of the advantages of the branch include lower incorporation costs and fewer formalities as well as the ability to rely on credit from the company abroad. 
 
Our agents who specialize in company registration in Hong Kong can give you details about the other types of companies and their characteristics.
 
You can contact us if you want to open a Hong Kong company.

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