⚠ Wrong Structure = Years of Overpaying Tax
Most founders focus on incorporation cost, not tax structure. A poor setup — wrong share classes, no holding layer, suboptimal remuneration mix — can cost tens of thousands extra every year.
Common Challenges
Share Structure Decisions
Ordinary vs preference shares, multiple share classes, shareholder agreements — each affects dividend taxation and future equity raises.
⚠ Risk: Inflexible structure → costly restructuring later
Salary vs Dividend Mix
How should founder compensation be split between salary (deductible) and dividends (no withholding tax in HK)?
⚠ Risk: Wrong mix → unnecessary salaries tax or MPF costs
Holding Company Need
Should you operate directly or through a holding structure? BVI, Cayman, or pure HK holding?
⚠ Risk: No holding layer → trapped profits, no offshore claim
Profits Tax Registration Timing
When does your liability to file begin? Missing early-stage obligations creates penalties.
⚠ Risk: Late registration → penalties from first profitable year
Who Is This For?
First-time HK company founders
Entrepreneurs incorporating their first Hong Kong limited company.
Foreign companies entering HK
Overseas businesses setting up their HK subsidiary or branch.
Freelancers going corporate
Self-employed individuals incorporating to manage tax and liability.
Startup founders pre-funding
Getting the equity and tax structure right before raising venture capital.
What We Do
Corporate Structure Design
We design the optimal share structure, holding layers, and registered office configuration for your needs.
Considering FSIE regime, offshore claims, investor expectations
Director Remuneration Planning
Model the optimal salary vs dividend vs loan split to minimise total tax (salaries tax + profits tax).
Annual review as profits grow
Tax Registration & Setup
Handle profits tax registration, employer registration, and ensure compliant first-year accounting.
IRD Business Registration + profits tax file
First-Year Tax Projections
Model your first 3 years of tax liability under different structure and remuneration scenarios.
Sensitivity analysis included
How It Works
Free Structure Consultation
45 minsDiscuss your business model, shareholding, planned activities, and growth plans.
Structure Design & Modelling
2-3 daysWe prepare a tax-optimised structure proposal with projected tax savings.
Incorporation & Registration
3-5 daysCoordinate with your company secretary for incorporation and handle IRD registrations.
Ongoing Compliance Setup
OngoingSet up accounting systems, payroll, and annual compliance calendar.
Case Studies
E-commerce founder — HK + overseas customers
- •Annual profits HKD 3.2M
- •Restructured with HK opco + holding
- •Optimal salary/dividend split implemented
- •First HKD 2M at 8.25% rate utilized
“The structure they designed saved us more in year one than their entire fee.”
SaaS startup — pre-Series A structure
- •Annual recurring revenue HKD 4.5M
- •IP holding structure implemented
- •ESOP scheme properly structured
- •VCs accepted the clean cap table
“They got us investor-ready and tax-efficient at the same time.”
Frequently Asked Questions
Do I need a holding company for my HK business?
Not always, but often beneficial. A holding company allows cleaner profit extraction, potential offshore income claims under the FSIE regime, and a cleaner structure for future investors or exit. We model the cost-benefit for your specific situation.
What is the HK profits tax rate for new companies?
HK uses a two-tier system: 8.25% on the first HKD 2 million of assessable profits, and 16.5% above that (for corporations). This applies from your first profitable year.
When do I need to register for profits tax?
You must notify IRD within 1 month of commencing business (i.e., first transaction). IRD will issue a profits tax return typically in your first or second year of assessment.
Can I structure my company to claim offshore status?
The territorial source principle means profits from genuinely offshore operations may not be taxable in HK. Post-FSIE (from 1 Jan 2023), passive income rules have changed significantly. We analyse your specific operation and advise on legitimate offshore claims.
Should my salary as a founder be high or low?
This is a key tax planning question. A higher salary reduces company profits tax (deductible expense) but increases personal salaries tax. The optimal split depends on your profit level, personal allowances, and MPF considerations. We model this annually.
What is BIR Form 1 used for?
BIR Form 1 is the notification to IRD that your company has commenced business. It must be submitted within 1 month of commencement. Failing to notify IRD on time can result in penalties and interest on unpaid tax.
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