The end of Hong kong company ?

[Mimimel]

Hi, i just got a notice from my agent in HK about the fact that the director's salaries have a chance to be taxed in HK even if the director is foreign.

Looking quickly I see that for 200k HKD or more it would be 17% tax...

It is possible to apply for an exemption but not guaranteed according to him.

So I wonder as I know that 99% of people who have a company in HK pay their taxes in the country of residence, ex dubai so 0%.

Have you ever had this kind of problem to manage in Hong Kong ? Or my agent is really bad ?

 

[MiltonStone]

That's bad news. You may check if HK has any double tax treaty with the country of your residency, not sure if the have such in place at all.

 

[Mimimel]

That's bad news. You may check if HK has any double tax treaty with the country of your residency, not sure if the have such in place at all.

They probably have a double tax treaty, but that not work if you pay 0% in your contry of residence.

But I find it strange that nobody talks about this, while the setup in HK is rather popular....

 

[Marzio]

I find it strange that nobody talks about this

Probably because people don't take out money from the company as salary but instead take out dividends

 

[Mimimel]

Probably because people don't take out money from the company as salary but instead take out dividends

Yes but you need to get the profit tax exemption for take dividends at 0% otherwise it is 8%/16%

 

[drpreobrazhensky]

In Hong Kong you have to apply for the offshore exemption every year with the IRD. So make sure to tell your service provider / accounting provider in HK to apply for the exemption. I've never had IRD not grant it, so you should be fine. As long as you don't have any team members or customers in Hong Kong, you meet all the criteria, and should be granted the exemption without a fuss.

 

[Mimimel]

In Hong Kong you have to apply for the offshore exemption every year with the IRD. So make sure to tell your service provider / accounting provider in HK to apply for the exemption. I've never had IRD not grant it, so you should be fine. As long as you don't have any team members or customers in Hong Kong, you meet all the criteria, and should be granted the exemption without a fuss.

Yes about profit but about salary it is the first time i heard that. So 2 offshores exemptions becomes to be expensive to ask and increase the risk to pay a tax...

 

[Cryptohodler]

Hi, i just got a notice from my agent in HK about the fact that the director's salaries have a chance to be taxed in HK even if the director is foreign.

Looking quickly I see that for 200k HKD or more it would be 17% tax...

It is possible to apply for an exemption but not guaranteed according to him.

So I wonder as I know that 99% of people who have a company in HK pay their taxes in the country of residence, ex dubai so 0%.

Have you ever had this kind of problem to manage in Hong Kong ? Or my agent is really bad ?

The draft legislation of the foreign-sourced income exemption regime in Hong Kong is out

Hong Kong Tax Alert - Issue 21, October 2022

home.kpmg

@Mimimel how does the above affect your offshore business profits ? I guess it has no effect