People form company to achieve different purpose, such as risk diversification, investment, market entry etc.
Generally, Hong Kong companies are being used because of following advantages :
- With British Legal System as background which is well adopted;
- With English and Chinese as bilingual legal language;
- With very low tax rate ( around 16.5% on net profit )
- Tax exempt for income not incurred in Hong Kong ( offshore income )
- Allow nominee shareholder and director structure - beneficiary owner's identity can be hidden from public company record;
- With very stable social and political environment;
- With very active and freedom in financial activities. No restriction in fund transfer to and from most part of the world;
- Close to and with excellent relationship with Mainland China;
- Being international center of information exchange and transportation hub;
- Enjoy convenience of international banking system;
- With huge supply of high quality manpower;
- Save legal and government fee when transfer of asset is effected by transfer of shares of a company holding the asset, rather than transfer of the title of the asset directly;
- Winding up of the HK Company is relatively low in cost and simple in procedure - this may happen due to change of investment strategy, change of business environment etc.