How corporate tax works in Hong Kong
Hong Kong profits tax applies to persons carrying on a trade, profession or business in Hong Kong on profits arising in or derived from Hong Kong. There is no distinction between residents and non-residents, and profits from the sale of capital assets are excluded.
The standard corporate rate is 16.5%, but the two-tiered regime taxes the first HKD 2 million of assessable profits at 8.25%. Hong Kong also has no VAT or GST and no withholding tax on dividends and interest. Large in-scope MNE groups are subject to the Hong Kong minimum top-up tax from fiscal years beginning on or after 1 January 2025.
Tax rates at a glance
- Corporate profits tax
- 8.25% / 16.5%Two-tier
- Standard company tax
- 16.5%
- Offshore profits
- 0%
- DMTT for in-scope MNEs
- 15%
- Dividend withholding tax
- 0%
- VAT / GST
- 0%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Remote foundersHolding companiesInvestorsRegional operatorsSaaS businesses
Watch out for
- Offshore profits claims need evidence. Contracts, service locations, decision-making and accounting records matter more than the registered office address.
- The Hong Kong minimum top-up tax applies to in-scope MNE groups with annual consolidated revenue of EUR 750 million or above, from fiscal years beginning on or after 1 January 2025.
- No VAT or dividend withholding tax does not eliminate payroll, stamp duty, excise duties, property tax or other compliance costs.
Frequently asked questions
Does Hong Kong have corporate tax?
Yes. Hong Kong levies profits tax at 16.5% for corporations, with the first HKD 2 million taxed at 8.25% under the two-tiered regime. Genuine offshore profits can be exempt.
What businesses pay corporate tax in Hong Kong?
Any person carrying on a trade, profession or business in Hong Kong can be taxed on Hong Kong-sourced profits. Large MNE groups can also fall under the Hong Kong minimum top-up tax.
Is Hong Kong good for companies?
It can be very strong for businesses with real Hong Kong or Asia nexus, because there is no VAT, no dividend withholding tax and offshore profits can be exempt if the facts support it.