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Repatriation of Profit in Hong Kong

Repatriation of Profit in Hong Kong

Updated on Thursday 19th May 2016

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Repatriation-of-Profit-in-Hong-Kong.jpgProfit transfer

A foreign company that opens a branch in the city can choose to repatriate profits from Hong Kong. This is done by observing the various laws and bank regulations regarding money repatriation and the taxes associated with it. 
Repatriating the Hong Kong company’s profits can be very important for any overseas company that also has business in this important Asian city. The specialists at our Hong Kong law firm can tell you all about the tax rules and regulations in Hong Kong so that you can repatriate profits accordingly. 

Taxes for profit repatriation from Hong Kong

A company based in Hong Kong that has its main headquarters overseas will want to bring the profits back to the main offices abroad. Repatriation of profits via dividends is the most common was to do so and in Hong Kong it’s the most convenient.
Hong Kong does not impose withholding tax on dividends. This means that dividends are not assessed to profits tax. The double tax treaties signed between Hong Kong and other countries are also important when it comes to profit repatriation. Depending on the country of origin of the company receiving the dividends (profits), there may be other laws and regulations in place that will need to be taken into account by the foreign investor in Hong Kong.

Bank procedures for profit repatriation in Hong Kong

In order for dividends, profits or various bonuses to be remitted out of Hong Kong, the company needs to submit a number of documents that attest the transaction and the fact that the repatriation is legal. A remittance can be made directly through the bank, if all the documents are in order:
- tax payment statement;
- tax return;
- the resolution of the Boards of Directors regarding dividend and bonus distribution to/from the company.
After the bank verifies the documents, the remittance procedure can begin. The company’s repatriation strategy needs to be set in place even before that company opens a branch or a subsidiary in Hong Kong.
The team of representatives at our Hong Kong law firm can provide you with further information about profit repatriation as well as other issues regarding foreign companies in Hong Kong. Contact us if you have questions.


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