Expatriate Tax Saving in Hong Kong

Published on 26 November 2007
Category: » Offshore Banking, Offshore Investment & Savings » Expatriate Tax Saving

Hong Kong has made itself more competitive once again – in keeping with its plans to maintain its position as the most competitive business environment in the region it has cut its taxes and expatriate tax saving in Hong Kong is now very possible!

Following Singapore’s tax reduction announcements earlier in the year, Hong Kong was forced to go further if it wanted to remain head and shoulders above the regional competition and retain and attract new business. As a direct result, Chief Executive Donald Tsang has announced that from 2009 taxes on salaries and company profits will be cut to 15% and 16.5% respectively.

Hong Kong is very active in terms of structuring taxation and policies in as business and investment friendly a manner as possible as it has been enjoying record fund management business growth rates in particular. It wants to maintain momentum in the economy and ensure it remains out in front for the race to attract greater international fiscal and business relocation to the jurisdiction.

In terms of specifically the fund management growth rate it has topped over 70% in just two years proving that the Hong Kong policy makers have got it just right. By again widening the gap on the competition such as Singapore which in February announced a cut in its corporate tax rate to 18%, the jurisdiction is doing all it can to prove to would be expatriates and also businesses that it does make financial and taxation sense to favour Hong Kong.

Other centres in the region popular with expats and also international businesses and investment money and with which Hong Kong is in competition include Shanghai which is home to China’s biggest stock and futures exchanges as well as its foreign exchange and interbank bond markets. Shanghai has been aggressively challenging Hong Kong’s position as has Singapore whose financial services industry expanded 17% last quarter from a year earlier.

Clearly competition in the region and in the financial and taxation marketplaces is intense and even heating up. But expatriates seeking taxation saving advantages from moving to live abroad may still favour Hong Kong because of its clear commitment to remaining out in front financially speaking, as well as the location’s very cosmopolitan feel and the fact that the standard of living in Hong Kong is very high.

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