News

Virtual Banking in Hong Kong

Information technology has permeated through all areas of our life and influenced with virtualization of bank sphere.

Traditional banks aren’t as mobile as virtual banking which can offer a new kind of a service and satisfy the needs of different clients. The main feature of this banking is working only by Internet.

From the moment of opening the 1st virtual bank in the world “Security First Network Bank” passed 22 year. Only in 2017 year in Hong Kong was announced about intention to begin “A New Era of Smart Banking”. In 2020 year already 8 virtual banks has begun its work: ZA Bank Limited, Airstar Bank Limited, Ant Bank, Livi Bank Limited, Fusion Bank, Mox Bank Limited, Ping An OneConnect Bank, WeLab Bank. Some of these banks still working in a test mode. Za Bank Limited is the first virtual banks in Hong Kong launched an opportunity to issue a debit card for new clients.

Hong Kong Monetary Authority (HKMA) expects that virtual banking development will help to promote high technology and innovation not only in this sphere. The focus is on clients who are involved in retail business.

Our company will help to understand the specifics of opening bank account in Hong Kong and China.   

Profit tax in Hong Kong

This article is about specifics of the profit tax in Hong Kong

1. The Hong Kong tax system is based on the territorial principle. If the company’s profits were received outside of Hong Kong, there are legal ways not to pay corporate tax in Hong Kong. Income from foreign sources is not taxed, even if it was transferred to Hong Kong.

2. Legal entities that make business and profits on the territory of the state must pay income tax in Hong Kong on a regular basis. It also applies to other jurisdictions that are registered as tax residents in Hong Kong.

3. The company’s loss is accumulated for over a period of 5 years, and income tax will be accrued only after company’s full repayment loss.

4. In Hong Kong the corporate tax is progressive. Currently, the standard rate of corporate tax in Hong Kong is 16.5%. The tax rate for small corporations with income is less than 4 million GK dollars, the tax rate is only 8%. This is almost the lowest income tax rate in the world.

Our company helps to understand all the features of taxation in Hong Kong and can be your tax agent.

Hong Kong tax system
How Hong Kong tax system works?
  • Hong Kong Tax System based on territorial concept. If the profit is made outside the state, there is no need to pay corporate tax in Hong Kong. Income from foreign sources is not taxed, even if it is transferred to Hong Kong.
  • Hong Kong’s Inland Revenue Department (IRD) takes action to regulate the state’s tax policy.
  • Legal entities of any form that conduct business and make profit on the territory of the state are required to pay income tax in Hong Kong.
  • The standard rate of Hong Kong Corporate Tax – 16.5%
Other taxes in Hong Kong
  • Dividends paid from profits that already have been subject to Hong Kong tax are not taxable in the hands of shareholders.
  • Dividends received from foreign companies are not taxable because they are income from a foreign source.
  • Hong Kong does not tax capital gains.
Hong Kong launched first virtual bank in the world

Last year Hong Kong officially approved eight licenses to create new virtual banks. ZA Bank gained one of these licenses, so the world’s first virtual bank already began its operations on March 24, 2020.

Currently, ZA Bank is intended only for digital services and it opens accounts only for Hong Kong residents.

However, virtual banks are becoming the most serious competitors for leading banks in Hong Kong for such as HBSC or Bank of China. ZA Bank will offer lending and deposit accounts with an annual interest rate of 1%, a figure much higher than the traditional rate offered by banks like HSBC in the administrative region.

Bank account in China is needed for running business in China for any type of business: trade, service or investment. Working with bankers is complicated; require expertise and professional approach to follow all their requirements. Therefore, our professional team will help you deal with the various possibilities of opening current accounts in more detail and fulfill all the requirements of Chinese banks.

Public Bank Holidays for 2020

Dear Colleagues!

2020_Public_Holydays – you can download the document which marks all public holidays in USA, Hong Kong, China in 2020.

This information is valuable for those who work with international finance daily. You can plan your remittances more precisely utilizing it in your daily operation!

Office hours of CorpProm during New Year Holidays 2019
Dear Valuable Partners, please note that our offices in Guangzhou and Hong Kong will be closed as below schedule: 25, 26th Dec 2018 and 31st Dec 2018 up to 4th Jan 2019. Please take it into consideration while planning your work. We wish you a Marry Christmas and a Happy New Year! Wish you Good Luck, Prosperity, Health and Happiness for the coming year!
Public Bank Holidays for 2019
Dear Colleagues! 2019_Public Holiday_ENG – you can download the document which marks all public holidays in USA, Hong Kong, China in 2019. This information is valuable for those who works with international finance daily. You can plan your remittances more precisely utilizing it in your daily operation!
Inland Revenue department

Dear Partners!

We found an interesting case recently happened and published by Inland Revenue department, that we would like to share with you.

Background

(a) Company A, Company B and Company C (collectively referred to as “the HK Companies”) are companies incorporated in Hong Kong. Their respective parent companies and common ultimate holding company are incorporated outside Hong Kong.

(b) The HK Companies are principally engaged in property investment. They collectively own a commercial building for long-term investment and letting purposes.

(c) The Group, of which the HK Companies are members, adopts a sole ownership holding structure where one property holding company holds the entire interest in one property. In order to standardize property holding structure, and enhance management and operational efficiency, the Group has planned to amalgamate Company B and Company C horizontally into Company A (“the Amalgamation”).

The arrangement

(a) Company B and Company C will be amalgamated into Company A by 30 June 2017.

(b) The Amalgamation is governed by the amalgamation provisions in Division 3 under Part 13 of the Companies Ordinance (Cap. 622). The legal effect of the Amalgamation on and after the effective date of the Amalgamation includes:

(i) Company B and Company C cease to exist as entities separate from Company A;

(ii) Company A succeeds to all property, rights and privileges, and all liabilities and obligations of Company B and Company C; and

(iii) Any agreement entered into by Company B and Company C may be enforced by or against Company A.

(c) After the Amalgamation, Company A, as a sole owner, will principally and solely engaged in the rental business of the entire building.

Source : The Government of the Hong Kong Special Administrative Region Inland Revenue Department Advance Ruling Case No. 62 dated 22 August 2017