Hong Kong is one of the most important financial centres in the world, with a territorial tax system that in principle exempts foreign income from local tax. As a Special Administrative Region of China, Hong Kong has its own common law legal system, guaranteed until 2047, and offers ideal conditions for Family Investment Companies, holding structures and asset protection in Asia.
Why Hong Kong for asset protection?
In principle, Hong Kong taxes only income from Hong Kong sources. Since 2023, however, an important exception applies: if the company belongs to a group with companies abroad, foreign dividends, interest and disposal gains become taxable as soon as they are received in Hong Kong. They stay tax-free if the company has real substance in Hong Kong or, for dividends and gains on shareholdings, has held at least 5% of the foreign company for at least twelve months. The legal system is based on English common law and offers strong protection for property rights and freedom of contract. Hong Kong is not an EU member and not part of the European transparency regime.
The tax framework
Hong Kong levies a profits tax of 16.5% on local business profits (8.25% on the first 2 million Hong Kong dollars). The rules described above apply to foreign profits. No capital gains tax, no dividend tax, no inheritance tax, no VAT. Income tax (salaries tax) is at most 17%. For Family Investment Companies that invest exclusively outside Hong Kong, the effective tax burden can be zero if the structure is set up correctly.
Family Investment Company in Hong Kong
A Hong Kong FIC is ideal as a holding structure for Asian shareholdings, property in the region and international investments. Formation is straightforward, the ongoing compliance requirements are moderate, and Hong Kong offers access to one of the deepest capital markets in Asia. Combined with a European holding company or a trust, it forms a robust, multi-tier asset protection structure.
Relevant services
- Family Investment Company, Hong Kong
- Family Investment Company (overview)
- Bank accounts outside the EU
- Book a consultation
Challenges
Asset classes
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