Hong Kong

Population: 6.8 million

Hong Kong has one of the world's most liberal economies and is a major international center of finance and trade. A former British colony now administered by the PRC under the policy of "one country, two systems", Hong Kong is constitutionally entitled to a relatively high degree of autonomy; for example, it retains its own legal system, currency, customs, treaty negotiating rights, such as air traffic and aircraft landing rights, and immigration laws. Hong Kong even maintains its own road rules, with traffic continuing to drive on the left. Only national defence and diplomatic relations are responsibilities of the central government in Beijing.

Hong Kong has one of the least restricted economies in world and is basically duty-free. It is the world's 10th largest trading entity and 11th largest banking center. The dominant presence of international trade is reflected in the number of consulates located in the territory: As of June 2005, Hong Kong had 107 consulates and consulates-general, more than any other city in the world. Even New York City, host of the United Nations, only has 93 consulates.

The objective of Hong Kong's monetary policy is to maintain currency stability. Given the highly externally oriented nature of the economy, this objective was further defined as a stable external value for the Hong Kong dollar in terms of a linked exchange rate against the US dollar at the rate of HK$7.80 to one United States dollar until 2005, when it was allowed to trade within a band of HK$7.75-$7.85.

Company Statute: Limited Company.

Taxation: There is no capital gains tax and exchange control. The basic law of Hong Kong guarantees free trade as well as low taxes for a Hong Kong company. Hong Kong adopts a territorial source principle of taxation. Only profits which have a source in Hong Kong are taxable here. Profits sourced elsewhere are not subject to Hong Kong Profits Tax. Consequently, if a Hong Kong company is trading or business activities are based outside Hong Kong, no taxation will be levied. Hong Kong companies with Hong Kong source of income currently pay 16% on profits.

Shareholders/Members: Minimum number of shareholders is two.

Directors/Managers: The minimum number of directors is one. Directors may be natural persons or bodies corporate. They may be of any nationality and need not be resident in the Hong Kong.

Registered Office Required: Yes, must be maintained in Hong Kong. There must be a Hong Kong resident appointed as an agent.

Company Name: Must end the following words or abbreviations: Limited, Corporation, Incorporated, societe Anonyme or Sociedad Anonima the following works and their associated activities cannot be used: Assurance, Bank, Building Society, Chamber of Commerce, Chartered, Cooperative, Imperial, Insurance, municipal and Royal.

Annual Reporting: There is no requirement to file accounts but an annual return in the form of a simple declaration must be submitted.

Annual Report/Licence Fees: EUR 500