By Vlad Cuc, specialist in company formation matters
Dividend investments are a good strategy for many entrepreneurs and investors, especially for those who want to diversify their portfolio and choose an option that offers then a certain level of income stability. The dividend is essentially a portion of the company’s profits distributed to a class of shareholders, as per the requirements of the Board. Investors who purchase shares that allow for dividend payments will have a steady income from this source.
Companies in Hong Kong may choose to distribute their profits to the shareholders in the form of the dividend or keep the profits for future expansion. The dividend payment will usually occur when the company has reached a certain level of maturity.
Investors who open a Hong Kong company can consider distributing their profits in this manner once their company is listed and has adequate earnings.
Hong Kong companies with high dividend yields
Property companies in Hong Kong are usually the types of companies that will have dividend stocks. The prices for these types of stocks fluctuate and investors who are interested in certain opportunities will always look for the best dividend yield.
Hong Kong stocks with high dividend yields can come from Chinese companies. It is common for companies in the oil and gas sector, those in healthcare or the pharmaceutical sector and banks and financial companies to have high dividend yields.
Small companies in Hong Kong, start-ups or those in sectors that focus on growth, like biotechnology, will often use their profits to reinvest in the company instead of issue dividends.
One of our company registration agents in Hong Kong can give you more information about the types of companies that have been performing well in terms of high dividend yields in Hong Kong.
Issues concerning dividend investments in Hong Kong
Many investors focus on buying stocks in companies with a high dividend yield. However, this investment strategy can also be focused on having a diverse portfolio that includes companies which have had a significant rise in their dividend rates, above the market average.
Income from dividends is taxed in most countries at a favorable rate. Hong Kong is no exception in this respect: the city has no withholding tax on dividends.
Companies that have good dividend reinvestment programs with easy access are a good and convenient option for many investors.
If you are interested in dividend investing in Hong Kong or want to know more about how to open a Hong Kong company please do not hesitate to contact our experts.