Company Setup Service in Hong Kong

Implementation of Two-Tiered Profits Tax Rate Regime

The Inland Revenue (Amendment) (No. 3) Ordinance 2018 (the Ordinance) was gazetted today (March 29) to implement the two-tiered profits tax rates regime announced in the 2017 Policy Address.

The two-tiered profits tax rates regime will be applicable to any year of assessment commencing on or after April 1, 2018. The profits tax rate for the first $2 million of profits of corporations will be lowered to 8.25 per cent. Profits above that amount will continue to be subject to the tax rate of 16.5 per cent. For unincorporated businesses (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5 per cent and 15 per cent. A tax-paying corporation or unincorporated business may save up to $165,000 and $150,000 each year respectively.

For details, please refer to the official website of the Hong Kong Inland Revenue Department.

Seychelles International Business Companies (Amendment) Act 2021

The Seychelles Government has recently enacted the International Business Companies (Amendment) Act 2021 effective from August 2021.

Summarizing some key points below: -

• Every company on the Register is required to submit and keep its accounting records at the company’s registered office in the Seychelles on a bi-annual basis
• Annual financial summary required for large companies and non-large non-holding companies

The accounting records need to be kept in either original form or electronic form. If a legal entity’s original accounting records are kept at a place other than in Seychelles, the legal entity must inform its Registered Agent in writing of the physical address of that place, according to section 175 (2) (2A) of the Act. It is important to note that the Seychelles’ authorities maintain the right to request for the original records. While the accounting records are required to be kept at the registered office in Seychelles, they are not required to be filed with the Registrar and are not open to public inspection.

With effect from February 2022, the Registrar expects to initiate its on-site compliance inspections to ensure that reliable accounting records are being kept by legal entities in Seychelles, and where non-compliance is identified, relevant sanctions will be applied.

An entity that contravenes section 175 of the Act (the “Section”) shall be liable to a penalty fee not exceeding US$10,000; a director who knowingly permits a contravention under the Section shall be liable to a penalty fee not exceeding US$10,000, according to sections 175 (5) and (6) of the Act.

For the amendment act details, please click the link at: International Business Companies (Amendment) Act, 2021 (or Amendment Act).

The Amendment Act includes new accounting record obligations applicable to entities registered in Seychelles, for details please click: New Accounting Record Obligations

Revenue (Stamp Duty) Ordinance 2021 gazetted – Increasing rate of stamp duty for sale or purchase of Hong Kong stock

The Revenue (Stamp Duty) Ordinance 2021 Gazette on June 11 raises the rate of stamp duty payable on contract notes for sale or purchase of Hong Kong stock from 0.1% to 0.13% of the consideration or value of each transaction payable by buyers and sellers respectively. It also correspondingly raises the rate of stamp duty payable on certain other transfers of such stock.

The new rate of Stamp Duty on Stock Transfers will come into effect on 1st August 2021. If your company have any share transfer that needs to be processed, you should consider to process it before 1st August 2021 to save stamp duty.

Source: https://www.ird.gov.hk/eng/ppr/archives/21061101.htm