Hong Kong Special Administrative Region (SAR)

Business Environment

Business practices

Closed hours and days: Banks: from 9.00 to 15.00 or 17.00, Monday to Friday. From 9.00 to 12.30 or 13.00 on Saturday.

Public holidays

Compensation day

Periods when companies usually close

Standards

National standards organizations
Integration in the international standards network: The Information Desk on the Normalisation of Products is dependant on the Department of Industry which covers and offers information to manufacturers concerning national and international standards. The System of Laboratories Accredited by Hong-Kong ( HOKLAS), depends also on the Department of Industry. They provide technical information on toys, textile, electronic and electric products, foodstuffs, building materials, etc.
The commonly used standards are ISO 9000 standards, especially for engineering and building sectors. Hong-Kong adheres to the Standards Code with the WTO. {ISO 9000}"
Classification of standards
Online consultation of standards
Certification organizations

Legal framework

Independence of justice: Judiciary is independent in Hong Kong and the judicial process is fair.
Equal treatment of nationals and foreigners: Hong Kong is ruled by law. Foreign nationals can expect a free trial from the country’s judicial system. Corruption does not exist in the country.
The language of justice: Chinese and English are the two judicial languages used in Hong Kong.
Sources of the law and legal similarities: The main source of the law is the constitution which has been approved by China's National People's Congress in March 1990 and is called Hong Kong's "mini-constitution". It is based on English law and the Basic Law. Foreign affairs and defence fall within the ambit of the central government in China.
Consulting national laws online

Intellectual Property

National organizations: The Department of Intellectual property is responsible for the management of patents and trademarks in Hong-Kong.
Hong-Kong signed the agreement of Paris for the protection of industrial property, the agreement of Bern for copyrights and protection of artistic works, the agreement of Geneva for the protection of phonographic works, as well as the Patents Co-operation Treaty (PCT) and the agreement establishing the World Intellectual property Organization (WIPO).
International membership: Member of the WIPO
Signatory to the Paris Convention
Membership to TRIPS

Tax rates

Consumption taxes

Tax rate: Government considering introduction of GST in 2009.
Reduced tax rate: No VAT rate in Hong-Kong.

Corporate taxes

Tax rate

Capital gains taxation

Capital gains is not taxed in Hong-Kong.

Other corporate taxes

Individual taxes

Tax rate

Allowable deductions and tax credit

Deductions only concern people who have chosen the progressive mode of levy. The main deductions are:
A basic deduction of 108,000 HK$ for single people; 216,000 HK$ for married couples; 30,000 HL$ for the first two dependent children (sliding scale amount for every supplementary child). The other deductions concern properties and land immobilizations.

Accounting rules

Tax year: The fiscal year begins on April 1-st and finishes on March 31.
Accounting regulation bodies
Accounting reports: BALANCE SHEET: on December 31 n, to be compared December 31 n-1
FIXED ASSETS
CURRENT ASSETS
Stocks
Marketable securities
Debtors
Cash
CURRENT LIABILITIES
Obligations under finance leases
Proposed dividends
Taxation
Creditors
Loans and bank overdrafts
NET CURRENT ASSETS
LONG TERM LIABILITIES
Deferred taxation
Obligations under finance leases
Bank loans
SHAREHOLDERS EQUITY
Share capital
Reserves
Retained profits
PROFIT AND LOSS ACCOUNT:
1) Turnover
2) Profit before tax
3) Tax
4) Retained profits at the beginning of the fiscal year
5) Dividends
6) Retained profits at the end of the fiscal year.
Publication: Companies have to produce each year a balance sheet and a profit and loss account.
Moreover, the Ministry of Finance publishes important guidelines in the "Accounting Standards for business Enterprises".
Professional accountancy bodies
Certification and auditing: The Hong Kong Society of Accountants is the representative authority for accounting.
Accounting news