Hey, stop wasting your Money on Taxes

Embrace Hong Kong’s low rate

Forget the parallel life you might be living elsewhere and embrace Hong Kong. It has much to offer, financially. You won’t be able to resist.

Make sure you have slipped off the shackles of tax-residency elsewhere, taking expert advice on this if necessary. US citizens have a hard time, as American shackles are tight wherever they live. For the rest of us, once we are no longer tax resident elsewhere, it is only income and gains on assets left behind that might be subject to tax there.

For those assets left behind, out of sight is not out of mind. File any required home tax returns each year, and budget for supporting cash and tax flows, especially on rented properties.

Once you are clear of other jurisdictions, Hong Kong is refreshing.

Sure, accommodation is expensive, but you are only taxed on income earned in the SAR, not elsewhere.
Income tax, at a maximum of 15 per cent, is strikingly modest. Added to that is the delight of completing a Hong Kong salaries tax return in a mere 15 minutes. It is also not uncommon for the government to pay a dollop of cash back to everyone.
A pitfall is spending your tax money, as employers are not required to remit tax as you earn. You can use the tax reserve certificate scheme to pay tax as you earn to keep things clear.

It takes a little while to appreciate that taxes on investment earnings here are almost non-existent.
You might consider moving your assets to Hong Kong. This can be done easily and without a wicked tax backlash at home. It is also a reason to keep savings and investments here.

But note that Asia’s World City is a candy shop of investment choices – often with pure peddlers behind the counters. So tread carefully. Make sure you stay flexible and keep a strict eye on currency movements. Ensure your bank allows for ease of changing and receiving foreign currencies at competitive rates. Avoid borrowing in a foreign currency, as this can go wrong very quickly.
The lower taxes here actually offer the opportunity to invest in low-risk assets and still achieve your objectives. Many of us accumulate wealth at a faster rate in Hong Kong than elsewhere. My rule of thumb for Australians was that a year of earning in Hong Kong was equal to three at home. That was before Sydney and Melbourne came third and fifth on the Economist Intelligence Unit’s list of the world’s most costly cities. Hong Kong ranked 14th.

InvestHK uses the slogan “Right place, Right time, Right now”. That is about right. But, bear in mind the tide can easily turn. Make sure you have cash on hand to cover reversals, especially if your contract is with an investment bank, as they can be fickle. Networking is the main game in town, so join chambers, clubs and associations early on to build your life rafts.

We can help you make the move. Send email to: office@billioncityltd.com and will assist you to set up your Company and Bank Account in Hong Kong

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