UAE (free zone) vs Hong Kong
Hong Kong is £1,765 cheaper in year 1 and £605 a year cheaper after that.
| UAE (free zone)Free zone LLC / FZCO | Hong KongPrivate limited company | |
|---|---|---|
| Costs | ||
| Minimum, year 1 | £2,800 | £1,035 |
| Minimum, per year after | £1,500 | £895 |
| Typical year 1 | £5,375 | £2,560 |
| Government fee | £2,500AED 6,000 to 25,000 licence (renewed yearly) | £370HK$1,545 online incorporation + HK$2,350 business registration |
| Indirect setup | £300–2,350 | £0–300 |
| Running per year | £1,500–8,850 | £895–3,645 |
| Share capital | Usually none | HK$1 |
| Rules | ||
| Directors | No local director | No local directorYou need a Hong Kong secretary and address. |
| Remote setup | Visit neededThe licence can be done remotely. The visa and bank account usually need a visit. | Fully remote |
| Audit | Audit needed for 0% free zone tax | Audit required |
| Time to form | 1 to 3 weeks | 1 to 2 days |
| Ease for foreign owners | 4/5 | 4/5 |
| Tax and banking | ||
| Corporation tax | 0% / 9%0% on qualifying free zone income, 9% on other profit above AED 375k. | 8.25% / 16.5%8.25% on the first HK$2m, 16.5% above. Only Hong Kong profit is taxed. |
| Dividend withholding | None | None |
| VAT / GST | 5% | None |
| Banking | 2/5UAE banks usually want a residence visa and a visit. | 1/5Very hard without local presence. Statrys and Airwallex are used instead. |
| All company setup fees in the UAE (free zone) | All company setup fees in Hong Kong | |
Questions
Is the UAE (free zone) cheaper than Hong Kong for company setup?
No. Hong Kong is cheaper, at least £1,035 in year 1 against £2,800 for the UAE (free zone).
Which is cheaper to run each year?
Hong Kong, at least £895 a year against £1,500 for the UAE (free zone).
Which needs a local director?
Neither. You can run a company in either without a local director.
Which is faster to set up?
Hong Kong, in 1 to 2 days. The UAE (free zone) takes 1 to 3 weeks.
How does corporation tax compare?
The UAE (free zone): 0% on qualifying free zone income, 9% on other profit above AED 375k. Hong Kong: 8.25% on the first HK$2m, 16.5% above. Only Hong Kong profit is taxed.
Sources: PwC · The Tax Lead · Companies Registry · IRD · Statrys · Air Corporate