In general, companies incorporated in Hong Kong that operate overseas are exempt from tax liabilities, and any foreign-sourced income they earn is also tax-exempt. However, to qualify for Hong Kong’s overseas tax exemption, companies must undergo an assessment by the Inland Revenue Department (IRD) of Hong Kong.
The IRD excludes the following from assessable profits:
- dividends received from a corporation subject to Hong Kong Profits Tax
- amounts already included in the assessable profits of other persons who are subject to Profits Tax
- interest on Tax Reserve Certificates
- interest and any profit earned from a bond issued under the Loans Ordinance, Government Bonds, Exchange Fund debt instrument, or a Hong Kong dollar-denominated multilateral agency debt instrument.
- income from interest and trading profits earned through long-term debt instruments.
- interest, profits, or gains from qualifying debt instruments issued on or after 1 April 2018, which are exempted from payment of Profits Tax
- amounts received or accumulated from a specified investment scheme by or for one person.
If you require additional information regarding tax exemptions for offshore companies in Hong Kong, please feel free to contact our consulting team via email at support@hongkongcompanyformation.hk.
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