In March 2025, Hong Kong's Legislative Council passed the Revenue (Taxation) Bill 2025, announcing a one-off tax reduction of $1,00% (capped at HK$3,000) for 2025/26, and an across-the-board upward adjustment of a number of allowances from 2026/27 onwards. What does this policy adjustment mean? How should cross-border entrepreneurs grasp the window period? This article provides you with an in-depth explanation.

I. Core changes in policy: 2025 tax cuts + 2026 tax allowance increase

This tax revision covers two time dimensions of benefits:

[Points to note]

- 2025/26: Equivalent to a ”tax bonus” from the Government, up to a maximum of HK$3,000, regardless of the amount of tax;

- From 2026/27 onwards: the increase in the allowance is a permanent change and applies to every subsequent year of assessment;

- The double benefit stacks up: high-income earners will enjoy both a 2025 rebate bonus and a higher tax exemption each year going forward.

II. Policy impact analysis: why are cross-border entrepreneurs more deserving of attention?

Hong Kong's tax advantages have always been highly favored by cross-border entrepreneurs, and this policy adjustment further strengthens the following advantages:

1. Higher value of Hong Kong tax resident status

- Hong Kong applies the principle of taxation at source and offshore income is excluded from taxation;

- The personal tax burden is further reduced by the increase in tax allowances from 2026;

- Holders of Hong Kong tax resident status can enjoy the benefits of the Mainland/Hong Kong tax treaty under certain conditions.

2. Window for optimization of corporate tax structures

For cross-border business owners with companies in Hong Kong, Hong Kong companies can be used as:

- Offshore profit pooling platform: Hong Kong source profits are taxed at 16.51 TP3T and non-Hong Kong source profits are exempt from tax;

- International trade intermediaries: signing international contracts in the name of Hong Kong companies and enjoying more flexible transfer pricing space;

- Offshore structuring component: with BVI, Cayman and other offshore jurisdictions to build a compliant cross-border tax structure.

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III. Practical advice: how to seize the policy window?

Taking into account the current policy environment, it is recommended that cross-border entrepreneurs focus on the following action items:

IV. One-stop solution: registration + account opening

Enterprise Caiying provides full-process Hong Kong company registration services, covering the core needs of business entity registration, bank account opening, tax compliance planning and so on:

[Special Note]

Hong Kong bank account opening policy continues to tighten, the audit cycle is extended, the rate of refusal to open an account is rising. It is recommended that enterprises in need plan as early as possible to avoid missing the window period.

V. The four core advantages of Enterprise Finance Hong Kong company services

🔹 1. A team of experts to guide you throughout the process

Our team of nearly 400 professionals, comprising senior Hong Kong licensed secretaries, certified public accountants, tax accountants and cross-border business consultants, handles tens of thousands of Hong Kong company registration and maintenance cases annually. We provide ”one-to-one” customized solutions from company structure design (e.g. Mainland-Hong Kong dual entity, VIE structure), name search, document preparation to government filing. We have 3 TCSP licensed secretaries and 1 self-owned Hong Kong CPA firm to ensure that every step of the process is legally compliant and to avoid risks from the source.

🔹 2. digitally empowered, smart and efficient

We have invested tens of millions of dollars to develop our own digital system ”E-Tron”, which realizes the standardization of the whole process and visualization of the progress of Hong Kong company registration, bank account opening, annual review, audit and tax filing, and so on. Customers can track the key nodes such as certificate issuance, bank interview, tax return submission, etc. in real time. The integration of AI intelligent analysis can quickly assess whether your business is suitable for applying for offshore exemption, whether you need to do transfer pricing, and assist in generating the optimal compliance program, so that complex matters are clear and transparent.

🔹 3. Eco-links, extra value

We connect over 500,000+ entrepreneurs with domestic and international associations (e.g. Shenzhen Cross-border E-commerce Association, Hong Kong Chinese General Chamber of Commerce), and regularly organize cross-border salons and seminars on finance and tax law. Registering a Hong Kong company through us is not just about getting a certificate - it is also about linking ecological resources such as green channel for bank account opening, cross-border payment, overseas warehouses, auditing and taxation, etc., which solves the problem of ”not knowing who to look for next after registering”, and creates secondary business opportunities.

🔹 4. Full-cycle accompaniment for worry-free sailing

Our services go beyond ”successful registration” to provide full life-cycle support for Hong Kong companies:

Previously: Free assessment of whether you need a Hong Kong company, recommending the optimal type of entity (Mainland company/Hong Kong company/Offshore company);

Midterm: Assist in completing Hong Kong company registration, bank account opening (HSBC / Overseas Chinese / Dah Sing / CBI and many other green channels), VAT / EIN application;

Late: Annual audits, audit tax returns, offshore exemption applications, CRS compliance, account freezes in case of emergencies, to become a long-term and robust partner for your overseas business. We automatically remind and handle all annual compliance matters on behalf of you on a nodal basis, and you just focus on your business.

Registering a Hong Kong company is not complicated, but there are a lot of details and potholes in every step.

If you want to minimize your efforts, send us your ”registration” and we'll help you pre-qualify for free + give you advice on how to register.

📞 Cell phone: 18676749275 ｜ 💬 WeChat: qcygscszk