ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 18
BDO HONG KONG
WHY HONG KONG As one of the world’s leading international financial centres, Hong Kong has a capitalist economy characterised by low taxation, free trade and minimum government intervention. Its simple tax system has led to Hong Kong being one of the most famous low-tax jurisdictions. Salaries tax in Hong Kong is calculated at progressive rates of up to 17%, or at a flat standard rate of 15% without deduction or allowances, whichever is lower. Hong Kong has no capital gains tax, no VAT, and no net wealth, inheritance or gift taxes. There is no withholding tax in Hong Kong on dividends or interest payments made to non‑residents. Profits tax rate is 16.5% for incorporated businesses and 15% for unincorporated businesses, with a two tiered profits tax rate of 8.25%/7.5% for the first 2 million of assessable profits and 16.5%/15% for the remaining assessable profits. Furthermore, with a territorial basis of taxation, both individuals and corporations are generally not subject to tax on non‑Hong Kong sourced income or profits. Whether income or profit is sourced in or outside of Hong Kong is determined by principles and tests developed through tax jurisprudence. HOW BDO HONG KONG CAN HELP The Private Client Services team at BDO in Hong Kong has extensive knowledge and experiences in providing you with one-stop, professional, comprehensive, tailor-made, client-interest orientated services that meet the special needs of you and your family. We bring the best resources we have to any client matter regardless of where those resources sit within our global organisation. Our tax teams are used to and are adept at working not only cross border but also cross subject matter. We believe our clients get better tax solutions to their business problem from our joined-up approach. The spectrum of our services are set out on the adjacent page.
FUND AND ASSET MANAGEMENT IN HONG KONG As an international asset management hub, Hong Kong offers many tax incentives for the fund and asset management industry. Apart from the Offshore Fund Exemption regime for hedge funds and private equity funds, the Unified Fund Exemption regime also provides tax exemption for setting up funds that are tax resident in Hong Kong. In April 2021, the Hong Kong government enacted the law to provide tax concession for carried interest for private equity funds. Under the concession, eligible carried interest received by or accrued to qualifying recipients on or after 1 April 2020 will be subject to 0% profits tax rate and 100% exclusion from employment income for calculation of salaries tax. The tax team at BDO in Hong Kong is experienced in working with lawyers, trustees and bankers in helping investors setting up their investment structures. We have also assisted many fund managers in establishing themselves in Hong Kong to avail of the various tax exemptions for funds and incentives for fund managers, including the carried interest exemption. Together with BDO’s global network, we offer streamlined one- stop services for HNWIs and their families in terms of tax planning, accounting and business services outsourcing so that they can live wherever they wish without the hassle of managing their businesses and investment portfolios in Hong Kong in such a dynamic and diverse global environment, while preserving regulatory compliance, operational and tax efficiencies.
Made with FlippingBook HTML5