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No tax – for Royalty income

Background
  1. Mr. A owns intellectual property or technology that can be licensed to other company for commercial use.
The arrangement
  1. Mr. A setup Hong Kong company H Ltd, and register H Ltd as the owner of the intellectual property (IP);
  2. H Ltd licensed use of the IP to a USA company for production use;
  3. H Ltd received royalty income base on the use of the IP in USA.
Benefit
  1. The royalty income received by H Ltd is not subject to Hong Kong profits tax;
  2. Such income will be taxable if the use of IP is located in Hong Kong.
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AbacusHKCPA - Certified Public Accountants base in Hong Kong (HK) - ACCA, HKICPA, providing services of

company formation, financial management, business advisory, tax planning, auditing and accounting.