GuideMeHongKong.com Identifies Top Reasons for Establishing a Trading Company in Hong Kong

Online, November 24, 2010 (Newswire.com) - A recent analysis by www.GuideMeHongKong.com - a leading Hong Kong offshore company formation portal, has identified the key reasons that motivate entrepreneurs to incorporate a trading company in Hong Kong.

According to the analysis, Hong Kong is a vibrant trading capital of the east owing to its close proximity to the world's fastest growing market, China. The port of the Special Administrative Region of China is flourishing not only because of its sophisticated infrastructure but is also complemented by a whole spectrum of systemic advantages of operating a trading company from Hong Kong. The top reasons identified by GuideMeHongKong.com's analysis include:

#1: Hong Kong's free market economy. Hong Kong is an autonomous territory that follows a laissez-faire economic policy. It is has been ranked as the world's freest economy in the Index of Economic Freedom for 14 consecutive years. The free flow of capital, goods, people and information enables easy access to the world's markets and foreign investments.

#2: Hong Kong's position as a key financial center. Hong Kong is a well-established financial center with a high concentration of international banks that offer comprehensive banking and financing facilities that are of international standards. Furthermore, Hong Kong's mature foreign exchange market and lack of exchange control enables free flow of capital.

#3: Hong Kong provides exchange rate stability, the most essential trading element in a tumultuous economic environment. The Hong Kong dollar is pegged to the US dollar at USD1: HKD7.8, evading any potential risk arising out of volatile exchange rate fluctuations.

#4: Hong Kong is a significant center for re-invoicing whereby, goods are imported by a Hong Kong trading company at competitive prices from nearby China or other Asian markets and re-invoiced at a higher price and sold-on to an overseas buyer. Since Hong Kong does not impose tax on import -export processing, this is a legal way to maximize profits by managing the paper-work alone in Hong Kong while accumulating tax-free profits in the Hong Kong trading company's bank account.

#5: Taxation in Hong Kong continues to be one of the key attraction for local and international trading companies. Hong Kong has the most lenient tax structure in the region and charges only 16.5% tax on profits. It follows a territorial tax policy whereby profits made outside Hong Kong are tax-free. There is no VAT, capital gains tax or sales tax. Since there is no withholding tax on dividend and interest, earnings from dividends of overseas and inland subsidiaries are not subject to taxation.

Commenting on the analysis, Mr. Andrew Chen - a senior member of editorial team at GuideMeHongKong.com said, "Hong Kong's politically neutral image, its cosmopolitan environment, state of the art infrastructure, and shipping facilities will benefit trading companies that establish a presence in Hong Kong. Hong Kong provides easy access to the Chinese markets and a short cut to overcome the bureaucratic hurdles of operating from the mainland. A Hong Kong trading company can also leverage on the growing ties between trading partners in the region."

For more information about doing business in Hong Kong, refer to http://www.GuideMeHongKong.com.