Foreign investors who want to enter the Asian market can choose to open a Hong Kong company
or set-up a legal entity in the Philippines. The two jurisdictions have their particularities and advantages.
The Philippines and Hong Kong share a similar geographical position; however, a notable difference is that Hong Kong is located very close to Mainland China. The Special Administrative Region shares business characteristics that make it easier for the Western businessperson to adapt to the investment climate but also retains much of its Chinese culture, making it a springboard for Chinese companies
Company formation requirements in the Philippines
The company formation process in the Philipines is similar in some respects to the Hong Kong company formation process. In order to register a company, the applicant must first register an available name, then obtain the business permit and register the company for tax purposes.
Investors in the Philippines can choose a suitable business structure based on the types of services they wish to provide. Service businesses are common and include transportation companies, business consulting firms, customer service companies, medical and dental services companies, entertainment companies and those involved in tourism. Manufacturing and merchandising businesses are also good business options.
Companies in the Philippines can take the form of a stock corporation or non-stock corporation. Partnerships, sole proprietorships, representative offices or branches of foreign companies can also be established in the country.
The corporate income tax rate is higher in the Philippines compared to Hong Kong. Its value is 30% for local companies and a 10% tax applies for regional operating headquarters. A surtax applies on improperly accumulated earnings.
Hong Kong company formation requirements
Hong Kong is a regional business and financial hub in Asia. As a financial center, many international banks have opened branches in Hong Kong
. Company registration in Hong Kong
also starts by choosing an available name and then registering the new entity with the Companies Registry
. Subsequent special permits and licenses may be needed.
Investors who are interested in company formation in Hong Kong can choose between various business options: similar to those in the Philippines are the corporations, which can be limited liability companies or joint stock companies. Partnerships and sole proprietorships, as well as representative offices, can be set-up in Hong Kong. The Special Administrative region does not impose a minimum share capital.
Hong Kong has a low taxation regime
compared to many other Asian countries, including the Philippines. The corporate income tax is 16.5% and 15% for unincorporated businesses. There is no withholding tax on dividends and a series of double tax treaties allow for a double taxation relief on companies and individuals who derive income from two sources, one of them being Hong Kong.
For more detailed information on company formation in Hong Kong
or details on the law for foreign investments, please do not hesitate to contacts us