Economic Project

Contents

Introduction

Business Registration

~Meaning

~Registration Procedure for Sole Proprietorship and Partnership

~Registration Procedure for Limited Company

~Registration Procedure for Overseas Company

~Registration Fee and Levy

~Payment Methods

~Cancellation

Sole Proprietorship

~Definition

~Popularity

~Set-up process

~Advantages

~Disadvantages

~Reason of suitable for Small Business

~Examples

Partnership

~Definition

~Features

~Forms/Establish

~Liability

~General partnership

~Limited partnership

~Advantages

~Disadvantages

~Tax rate

~Dissolution and Termination

Limited Company

~Meaning

~Advantages

~Disadvantages

~Private limited companies

~Public limited companies

~Shares

~Procedures of Formation

~Taxes

Comparison

Conclusion

Working Table

Taxes

The characteristics of Hong Kong Profits Tax

 ~Only profits sourced in Hong Kong are taxable here.

 ~No tax on capital gain or dividends. No interest tax.

 ~Corporate profits tax rate of 16% is the lowest in the region.1

(The profit tax rate for corporations is increased from 16% to 17.5% with effect from year of assessment 2003/04)2

~ Simple tax regime and legislation offer certainty to taxpayers. An advance ruling service on source of profits is in place.

~Tax deduction allowed for all business expenses.

~Generous depreciation allowance for plant and machinery - 60% initial allowance and 10% to 30% annual allowance. Immediate write off to be allowed for capital expenditure on plant and machinery specifically related to manufacturing, and on computer hardware and software.

~20% initial depreciation allowance and 4% annual depreciation allowance for investment in industrial buildings. 4% annual depreciation allowance for commercial building

~Capital expenditure on refurbishment for business to be allowed to be written-off against tax over five years.

~Losses allowed to be carried forward for setoff against future profits without time restriction. 3

1 http://www.wcpa.com.hk/business.htm

2 A brief guide to taxes administered by the Inland Revenue Department

3 http://www.wcpa.com.hk/business.htm

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