Advantages of Setting Up a Hong Kong Company Amid Globalization

What Are the Advantages of Establishing a Company in Hong Kong Amid Globalization?

In the tide of globalization, establishing a company in Hong Kong offers a range of strategic advantages. In recent years, the global economic landscape has continued to evolve, with cross-border trade, capital flows, and corporate internationalization becoming irreversible trends. Against this backdrop, an increasing number of companies are expanding their operations into overseas markets. As a crucial bridge between China and the world, Hong Kong remains one of the top destinations for global investors.

Particularly in 2025, amid global supply chain restructuring and accelerated regional economic integration, the unique advantages of setting up a company in Hong Kong have become even more pronounced.

First, Hong Kong boasts a world-class financial system and a free, open business environment, which provide a solid foundation for its role as an international business hub. According to the World Bank’s 2025 Doing Business report, Hong Kong ranks among the world's top economies, excelling particularly in areas such as cross-border trade and contract enforcement. Hong Kong maintains a low tax regime, with a corporate profits tax rate of only 16.5%, and no value-added tax, capital gains tax, or dividend tax. This tax structure is highly attractive to multinational enterprises. For companies aiming to reduce their tax burden and enhance capital efficiency, Hong Kong is an ideal choice.

Second, as China’s Special Administrative Region, Hong Kong benefits from the institutional guarantees of one country while maintaining the market mechanisms of two systems, giving it a unique global position. Especially in the context of complex and shifting U.S.-China relations and tighter foreign investment policies in some countries, Hong Kong remains highly open. For example, data from the first quarter of 2025 show that despite an overall decline in global foreign direct investment FDI, capital inflows into Hong Kong continued to grow steadily, particularly in the fields of technology, logistics, and financial services. This demonstrates that even in an increasingly uncertain international environment, Hong Kong continues to attract significant foreign investment and offers companies a stable operating environment.

Moreover, Hong Kong serves as a vital gateway connecting mainland China and international markets. With China’s ongoing Belt and Road Initiative and the deepening development of the Guangdong-Hong Kong-Macao Greater Bay Area, Hong Kong’s strategic position has been further strengthened. According to official statistics from the Hong Kong SAR, in the first half of 2025, trade volume between Hong Kong and Southeast Asian countries increased by more than 8% year-on-year, highlighting its growing role in regional cooperation. Many mainland Chinese enterprises have established subsidiaries in Hong Kong, achieving brand internationalization and gaining easier access to overseas markets. At the same time, foreign companies are leveraging Hong Kong as a platform to better understand the Chinese market and lay the groundwork for future expansion.

Hong Kong’s well-established legal system and strong intellectual property protection are also key factors attracting business registrations. As a common law jurisdiction, Hong Kong is widely recognized internationally for its judicial independence and transparency. In today’s environment, where global data security and privacy protection are increasingly important, Hong Kong’s personal data protection laws are aligned with the EU’s General Data Protection Regulation GDPR, offering strong support for corporate compliance. This is particularly crucial for companies operating in highly regulated sectors such as cross-border e-commerce and fintech.

It is also worth noting that in recent years, many startups and tech firms have chosen to set up branches in Hong Kong, attracted by its flexible regulatory framework and efficient capital markets. For instance, the Hong Kong Stock Exchange HKEX has introduced a series of reform measures, including allowing unprofitable biotech companies to list and introducing the SPAC Special Purpose Acquisition Company mechanism, significantly enhancing market inclusiveness and dynamism. These initiatives have drawn a large number of innovative enterprises to raise capital in Hong Kong, offering entrepreneurs more exit options and growth opportunities.

In conclusion, in today’s era of continuous globalization, establishing a company in Hong Kong not only helps businesses mitigate certain geopolitical and economic risks but also enhances their global competitiveness. Whether viewed through the lens of tax incentives, legal protections, financial support, geographic location, or cultural integration, Hong Kong presents irreplaceable advantages. For companies seeking to expand overseas, choosing to establish a presence in Hong Kong is a strategic, efficient, and forward-looking decision.