What you need to know
Hong Kong is one of the world's largest international banking centres and attracts many international clients who require offshore banking services in Asia.
- A wide range of investment products are available to serve the offshore banking needs of international investors.
- Depending on your personal circumstances, there may be financial and taxation benefits in managing your wealth offshore.
Convenient access to your money, anywhere in the world
- Our sophisticated internet banking service combined with 24/7 phonebanking services give you round-the-clock access to your accounts from anywhere in the world.
The Government of the Hong Kong Special Administrative Region (HKSAR) abides by the principle of keeping intervention into the way in which the market operates to a minimum and has endeavoured to provide a favourable environment in which business operates. Its policy of low and simple taxation allows maximum room for business initiatives and innovation. There is a strong emphasis on the rule of law and fair market. There are no barriers of access to the market by foreign businesses and no restrictions on capital flows into and out of Hong Kong. There are also no exchange controls. Whether you are looking for a tax efficient environment or diversity offshore for your assets, Hong Kong can be an ideal safe haven for your money.
In the banking sector, at the end of May 2006, 134 licensed banks, 32 restricted licensed banks, 33 deposit-taking companies, together with 88 local representative offices of overseas banking institutions. These institutions come from 37 countries and include 69 out of the world's largest 100 banks. Together they operated a comprehensive network of over 1,300 local branches, excluding their principal place of business in Hong Kong. Banks in Hong Kong engage in a wide range of retail and wholesale banking business such as deposit-taking, trade financing, corporate finance, treasury activities, precious metal trading and securities broking.
Hong Kong has been ranked first in terms of economic freedom for 12 years (1995 - 2006), according to the Heritage Foundation. About 57 per cent of its banking business is denominated in foreign currencies. The importance of Hong Kong in the global banking world is demonstrated by its external orientation. The external assets held by banks and deposit-taking institutions reached HK$1,604 billion (end of 2005), making Hong Kong one of the largest banking centres in the world.
Hong Kong has a mature and active foreign exchange market, the development of which has been stimulated by the absence of exchange controls in Hong Kong and its favourable time zone location. Links with overseas centres enable foreign exchange dealing to continue 24 hours a day around the world. According to a triennial global survey conducted by the Bank for International Settlements in 2004, Hong Kong was the world's sixth largest foreign exchange market in terms of turnover.
Hong Kong's stock market is the 8th largest in the world and the second largest in Asia in terms of market capitalisation as at the end of May 2006*. A wide variety of products are traded in the stock market, ranging from ordinary shares to options, warrants, unit trusts and debt securities. As at the end of May 2006, 1,144 companies were listed on SEHK, with a market capitalisation of HK$9,411 billion. Among them, 347 were Mainland enterprises which have together raised more than HK$1,100 billion directly and indirectly through Hong Kong since inception+. A second market, namely the Growth Enterprise Market (GEM), was established in November 1999 to provide an alternative fund raising channel for emerging growth companies. As at the end of December 2004, 204 companies were listed on the GEM with a total market capitalisation of HK$66.7 billion.
* Ranking is based on the market capitalisation of each member stock exchange of World Federation of Exchanges.
+ Cumulative figures from 1993 onwards for H-shares, and 1986 onwards for red chips.
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Hong Kong is the regional centre for portfolio management activity, including Hong Kong authorised unit trusts and mutual funds and, on a larger scale, institutional fund management. At the end of March 2006, there were 1,998 authorised unit trusts and mutual funds in Hong Kong. The net asset value of authorised unit trusts and mutual funds as at the end of 2005 totalled around HK$5,207.2 billion.
Hong Kong does not collect capital gains tax, sales tax, VAT, nor annual net worth tax. Investment income and capital gains are not taxed.
Stamp duty is applicable to many types of transactions carried out in Hong Kong including share transactions.
Interest (accrued on or after 22 June 1998) derived from any deposit placed in Hong Kong with an authorized institution is exempt from payment of Profits Tax. This exemption, however, does not apply to interest received by or accrued to a financial institution.
The following income and profits are excluded from the assessable profits:
Dividends received from a corporation which is subject to Hong Kong Profits Tax;
Amounts already included in the assessable profits of other persons chargeable to Profits Tax;
Interest on Tax Reserve Certificates;
Interest on, and any profit made in respect of a bond issued under the Loans Ordinance(Cap.61) or the Loans (Government Bonds) Ordinance(Cap.64), or in respect of an Exchange Fund debt instrument or in respect of a Hong Kong dollar-denominated multilateral agency debt instrument;
Interest income and trading profits derived from long term debt instruments; and
Sums received or accrued in respect of a specified investment scheme.
For the latest tax information, please visit the website of the Inland Revenue Department of Hong Kong SAR
HSBC in Hong Kong offers a comprehensive range of banking and wealth management services. Click on the links below to find out more details:
This section is intended as a general guide for reference only. Benefits and features may be subject to local country regulatory restrictions. Please refer to the Premier Service Guide for detailed information.
The information contained in this section should not be relied upon as a substitute for professional advice in individual cases. Future changes in legislation, tax levels and practice could affect the information on this site.
The information shown is based on date or information obtained from sources believed to be reliable, but HSBC makes no representation and accepts no responsibility as to its accuracy or completeness, and will not be held liable for damages arising out of any person's reliance upon this information.
Information sourced from Inland Revenue Department and Information Services Department of Hong Kong SAR.
Investment involves risk. You should carefully consider whether any investment products or services mentioned herein are appropriate for you in view of your investment experience, objectives, financial resources and relevant circumstances. The price of securities may move up or down. Losses may be incurred as well as profits made as a result of buying and selling securities. This document does not constitute an offer for the purchase or sale of any investment products. The contents of this document have not been reviewed by the Securities and Futures Commission.
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