Asset Management - Hong Kong

About Hong Kong

Hong Kong is known as one of the world’s top financial centres, drawing considerable capital flows and housing a diverse range of financial organisations. It serves as an entry and exit point for investment into and out of China, and it is critical in facilitating cross-border transactions and money transfers.

Hong Kong’s asset management business is growing, with several local and international firms working there. These companies provide a wide range of investing products and services to both institutional and individual clients.

Hong Kong is located on China’s southern coast, 60 kilometres (37 miles) east of Macau, on the east side of the Pearl River estuary. Except for the north, which borders the Guangdong city of Shenzhen along the Sham Chun River, it is bordered by the South China Sea on all sides.

According to Worldometer’s elaboration of the most recent United Nations data, the current population of the People’s Republic of China’s Hong Kong Special Administrative Region is 7,670,342 as of Friday, May 12, 2023.

Cantonese remains dominant with 96% percent.¬†Mandarin is spoken by 48% of Hong Kong’s population, compared to 46% of the people who can speak English. Previously, English was the second most spoken language.

With the exception of foreign affairs and defence, which remain the responsibility of the Central People’s Government, the Basic Law guarantees Hong Kong a high level of autonomy under Chinese administration.

Taxation

  • Hong Kong levies a territorial tax. For income derived from Hong Kong, profits tax is charged at a rate of 16.5%.
  • Profits earned outside of Hong Kong are tax-free. There is no withholding tax on dividends or interest, and there is no capital gains tax. A corporation that conducts business in Hong Kong but derives earnings elsewhere is not required to pay tax in Hong Kong on such profits.
  • Double Taxation Agreements

Hong Kong has comprehensive double taxation agreements with Austria, Belgium, Brunei, Canada, the Czech Republic, France, Hungary, Indonesia, Ireland, Japan, Jersey, Kuwait, Liechtenstein, Luxembourg, Malaysia, Malta, Mexico, the Netherlands, New Zealand, Portugal, Switzerland, Spain, Thailand, the United Kingdom, Vietnam, Qatar, and the Mainland China to relieve taxation on income such as dividends, interest income, and royalties.

Other benefits

  • Hong Kong has no limitations on international investment and no currency controls.
  • Ease of doing business and licencing
  • An advantageous tax regime
  • A favourable regulatory environment with strong anti-money-laundering legislation
  • Company meetings do not have to be held in Hong Kong.
  • An annual general meeting (AGM) must be convened once a year, no more than 15 months after the previous AGM. A firm, on the other hand, is not required to hold its first AGM until 18 months after incorporation.
  • Companies may opt out of holding AGMs with the unanimous permission of their shareholders.

 

General

License: Type 9 License
Timeframe for Approval: 4 months
Regulator: Securities & Futures Commission of Hong Kong

Company Structure

Local Director: Only one director (only natural person, no nationality or residency restrictions)
Local Shareholder: Only one shareholder (can also be a legal person, no nationality restriction)
Local Registered Office: Required
Local Staff: Required
Compliance Officer: Required
AML/KYC: Required
Audit: Required
Economic Substance: Required
Corporate Tax Rate: 16.5%
Currency: Hong Kong Dollar
Minimum Paid-up Capital: N/A (If a Company has a licensing condition that it shall not hold client assets); in other cases HK$5,000,000)
Capital Requirement: HK $100,000
Tax Structure: No Tax on Offshore Income

The measures that follow will be taken in order to receive a licence:

  1. Collecting necessary KYC documents for first verification
  2. Formation of a Hong Kong firm
  3. Creation of pertinent papers (business strategies, manuals, and procedures, for example).
  4. Establishing a local office and hiring local personnel
  5. Request for the appointment of two Responsible Officers
  6. The licence application
  7. The SFC provides pre-approval.
  8. The paid-up capital must be deposited in full within the specified time period following pre-approval (if not previously done).
  1. Portfolio Management
  2. Fund Management
  3. Advisory Services
  4. Discretionary Account Management
  5. Corporate Finance
  6. Asset Custody
  7. Research Analysis

For local regulatory authority:

(Each beneficial owner, shareholder, director, Responsible Officer and secretary must provide)

  • CV
  • A copy of a valid passport that has been notarized
  • Notarized duplicate identification
  • A copy of proof of residence address (for example, a utility bill no more than three months old) in English or translated into English
  • A letter of recommendation from a bank
  • Letter Requesting a Bank Statement
  • A copy of a university diploma that has been notarized
  • Application forms signed and notarized
  • Two professional letters from a notary, lawyer, auditor, or other relevant professional
  1. Establish Hong Kong private company limited by shares
  2. Preparation and drafting of shareholder and officer agreements.
  3. Preparation and drafting of narrative business plan.
  4. Preparation and drafting of current financial statements.
  5. Preparation and drafting of 3 years financial projections.
  6. Preparation and drafting of personal financial statements for owners.
  7. Preparation and submission of application with BVI Financial Services Commission.
  8. Preparation and drafting of responses to regulatory authority
  9. Identification and engagement of auditor and prime broker.
  10. Facilitate opening of bank accounts and payment processors.
  11. Preparation and drafting of AML/KYC policies and procedures.
  12. Preparation and drafting of client agreements and disclosures.