Hong Kong is a major Asian port and a worldwide financial centre with a service economy. Hong Kong’s economic strength lies in a stable banking system, no public debt, a robust legal system, huge foreign exchange reserves, stringent anti-corruption measures, and close relations with mainland China. Hong Kong has the world’s most free economy, according to the Heritage Foundation’s 2019 Index of Economic Freedom. Hong Kong, with a population of about 7.49 million people, is also a major trading centre.
Hong Kong’s government continuously supports and encourages private-sector initiatives. Highly trained entrepreneurs and rich investors can apply for business, research, and investment residency in Hong Kong.
Hong Kong’s legal system is founded on English common law and an expanding body of statutory law enacted by the local legislature. Hong Kong has a large number of legal firms, including some from Australia, Canada, the United Kingdom, and the United States. English is the language of the law and, to a considerable extent, of business. The Cantonese dialect is the official language, but Mandarin is becoming more widely spoken in Hong Kong.
Hong Kong and mainland China have signed a bilateral free trade agreement known as the Closer Economic Partnership Agreement (CEPA). With well-established commercial linkages with most other Asian countries, Hong Kong serves as a regional business center in Asia. In terms of Chinese commerce, Hong Kong occupies a unique position. With China’s admission to the World Trade Organization (WTO), Hong Kong is in a strong position to expand its role as China’s primary commercial and financial hub.
With a substantial representation of banks, insurance companies, merchant banks, fund managers, venture capital businesses, and other financial intermediaries, Hong Kong is a major international financial and commercial centre. Hong Kong has the freest economy in the world. With services accounting for 93.5 per cent of GDP in 2020, it is one of the most service-oriented economies in the world.
Hong Kong is also famous as a regional headquarters for many global corporations, and it has been successful in establishing significant local businesses in industries like hotel management, property development, and telecommunications.
Hong Kong is a magnificent destination for foreigners and their families, offering delicious food, a dynamic culture, and a wealth of opportunities. Hong Kong continues to attract ex-pats from all over the world as a major corporate hub and financial centre in the Asia Pacific. It is now one of the most active cities in the world, with a sizable expat community. Hong Kong’s economy is open, with a free market and low taxes. It is a significant worldwide financial and commercial centre.
While Hong Kong does not have a citizenship by investment scheme, it does provide talent, professionals, and entrepreneurs with a variety of residency options. In 2015, Hong Kong’s core resident program was halted. Hong Kong today has various career and investment opportunities. After 7 years of living in Hong Kong, a Permanent Residency Visa can be issued, and citizenship can be requested after 10 years.
On January 15, 2015, the Capital Investment Entrant Scheme was officially suspended. There are, however, additional options for people who want to apply for Hong Kong residency. These are they:
Working in Hong Kong is a fantastic experience. The General Employment Policy (GEP) establishes the entrance requirements for professionals seeking to enter or remain in the HKSAR. If you meet the following criteria, you can apply for a work visa in Hong Kong under the GEP:
In Hong Kong, a foreign national can get a residency permit regardless of nationality, but only under specified conditions. The People’s Republic of China’s Hong Kong Special Administrative Region has an Immigration Ordinance and also employs parts of the Basic Law to control how foreigners can get permanent residency or other types of visas in Hong Kong.
Applications are approved on a discretionary basis and are subject to changes in government regulations. Even if all eligibility conditions are met, the director of immigration reserves the right to refuse any application. Successful candidates are usually granted a 24-month limited extension of stay. Applicants can request to extend their stay in the HKSAR before their stay expires. Such applications will only be accepted if the applicants continue to meet the entry for investment, QMAS, or General Employment Policy eligibility conditions.
Hong Kong is one of the world’s most important financial centres, consistently regarded as the world’s most competitive and open economy. Hong Kong’s tax system is based on the territorial source principle. Companies in Hong Kong can only pay tax on profits earned in Hong Kong, and the current rate of taxation on assessable profits is 17.5 per cent.
There is no capital gains tax in Hong Kong, and a Hong Kong company’s dividends are also tax-free. Even the standard rate of profit tax on Hong Kong-sourced revenue, at 16.5 per cent, is quite competitive. Hong Kong corporations are appropriate vehicles for worldwide trading or consultancy activities with no ties to Hong Kong.
The Closer Economic Partnership Deal (CEPA) between the Chinese mainland and Hong Kong is the first free trade agreement between the two countries. CEPA’s main text was signed on June 29, 2003. CEPA expands Hong Kong’s market for goods and services expands, boosting the Mainland’s and Hong Kong’s already tight economic cooperation and integration.
CEPA takes a modular approach, and the two parties have been collaborating closely to introduce new liberalization measures on a regular basis. The CEPA Legal Text specifies the agreed-upon liberalization measures for various stages of CEPA.
The CEPA is divided into three sections: goods trade; services trade, and trade and investment facilitation. To take advantage of CEPA and acquire a “first-mover advantage” in the mainland markets, firms that do not yet have a presence in Hong Kong can explore collaborating with or acquiring qualifying Hong Kong-based companies.
There are 273 tariff-free categories of Hong Kong-made items that can be exported to the mainland. On applications by local manufacturers for other product codes maintained in China’s tariff system and meeting the CEPA rules of origin, the mainland agreed to apply a zero-import tax to further categories of made in Hong Kong products beginning January 1, 2006.
On November 21, 2019, the Hong Kong Special Administrative Region (HKSAR) and the Mainland signed an agreement under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) to amend the CEPA Agreement on Trade in Services (the Services Agreement) to raise the level of the Services Agreement, deepen the liberalization of trade in services between the Mainland and the HKSAR, and strengthen bilateral economic and trade exchanges. The change to the Services Agreement took effect on June 1, 2020.
The Agreement on Trade in Services encompassed and unified promises made under CEPA and all of its supplements, as well as the Agreement between the Mainland and Hong Kong on Achieving Basic Liberalization of Trade in Services in Guangdong (the Guangdong Agreement).
The ROO established the criteria and norms by which a product can claim to be from a specific nation. The following CEPA origin rules apply to the 273 mainland product codes included in the initial phase:
Management consultant services, exhibitions and conventions, advertising, accountancy, construction and real estate, medical and dental services, distribution services, logistics services, freight forwarding and agency services, storage and warehousing services, transport services, tourism, audiovisual, legal services, banking, securities, and insurance are all covered by CEPA’s market access provisions. One must fulfil the following criteria:
For services, the term “Hong Kong companies” means: To be eligible for the mainland’s benefits under the CEPA, a corporation must have “substantive business operations” in the HKSAR, as determined by the following criteria:
Both sides agree to promote cooperation in the following eight areas: customs clearance facilitation, commodity quarantine and inspection, quality assurance and food safety, SME cooperation, Chinese medicine and medical products cooperation, electronic commerce, trade and investment promotion, and transparency in-laws and regulations.
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