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How Hong Kong’s territorial profits tax works

Hong Kong taxes only profits sourced in Hong Kong, at two-tier rates. Foreign-sourced passive income and disposal gains are covered by the FSIE regime, which asks for economic substance.

Facts checked against official sources on 27 September 2026

The official rules that apply

  • Hong Kong adopts a territorial source principle: only profits sourced in Hong Kong are taxable.
  • Under two-tiered rates, corporations pay 8.25% on the first $2 million of assessable profits and 16.5% above; unincorporated businesses 7.5% and 15%.
  • The two-tiered regime took effect from year of assessment 2018/19.
  • The refined FSIE regime covers foreign-sourced disposal gains on all types of property accrued and received on or after 1 January 2024; non-IP disposal gains are exempt if the MNE entity has adequate economic substance in Hong Kong.

Registration basics in Hong Kong

Company typePrivate company limited by shares
RegistryCompanies Registry
Government filing feeHK$1,545 — HK$1,545 electronic filing (HK$1,720 on paper), plus the Business Registration fee paid together.
Registration timeElectronic applications normally get a certificate within 1 hour; paper filing takes about 4 working days.
Resident directorDirectors may live anywhere; at least one must be a natural person. The company secretary must be resident in Hong Kong (or a Hong Kong-based company).
Visit, notary or lawyerOnline via e-Registry; no notary step.
Registered addressThe registered office must be in Hong Kong. The official FAQ does not address virtual offices.
Minimum capitalNo minimum
Corporate taxTwo-tier profits tax: 8.25% on the first HK$2 million, 16.5% above. Only Hong Kong-sourced profits are taxed.
Every yearBusiness Registration fee HK$2,200 a year, annual return, and a significant controllers register kept in Hong Kong.

Full step-by-step guide: company registration in Hong Kong.

Sources

  • ird.gov.hk, checked 27 September 2026
  • ird.gov.hk, checked 27 September 2026
  • ird.gov.hk, checked 27 September 2026
  • ird.gov.hk, checked 27 September 2026
FAQ · 3 questions

Frequently asked questions

Yes. No resident director is required, and the formation can be completed through a licensed provider. No visit is required.

The registry does not say. Ask the provider to confirm the registry accepts the address before you pay.

No. We compare the official requirements and, if you ask, introduce you to one licensed provider in Hong Kong. The provider handles the filing and gives legal or tax advice where needed.