Moving to Hong Kong in 2026: Territorial Taxation and an Asian Hub

Hong Kong does not tax worldwide income. The territory levies tax only on business profits, rental income from property located there, and employment income sourced there. This is strict territoriality, and it underpins everything else.

As a result, there is no tax on capital gains — the applicable rate is 0%³ —, no taxation of dividends at shareholder level, and no value added tax.

Salaries tax

The taxpayer is taxed on the more favourable of two calculations. The first is a progressive scale applied to net chargeable income after allowances: it starts at 2%⁴ and reaches 17%⁵ on the balance.

The second is a standard rate applied to net income before allowances. It has become a two-tier progressive rate: 15%⁶ on the first HK$5,000,000⁷ of net income, then 16%⁸ beyond that.

This more-favourable-calculation mechanism is a distinctive feature: it ensures that the burden never exceeds the standard rate, which in effect caps the taxation of high-earning employees.

Companies

Profits tax is also two-tier: 8.25%⁹ on the first band of profit, then 16.5%¹⁰ beyond that, for companies.

Here again, only Hong Kong-sourced profit is taxed. Profit made outside the territory may escape tax, but this characterisation is closely examined by the authorities and requires solid evidence. It is the territory's main tax dispute issue.

The foreign-sourced income regime (FSIE), in force since 1 January 2023, regulates this exception for entities that are members of a multinational group: foreign-sourced dividends, interest, intellectual property income and disposal gains received in Hong Kong are deemed taxable, with gains on other assets covered since 1 January 2024. The exemption is maintained if the entity meets an economic substance requirement locally, a participation requirement for dividends and gains on securities — at least from 5%¹¹ of the capital, held for at least from 12 months¹² —, or a nexus requirement for intellectual property. The regime applies neither to individuals nor to purely local groups, and an advance ruling may be requested before any structuring.

For a French national, a clarification is needed on pensions. The absence of Hong Kong taxation does not mean that the pension escapes tax: it is the applicable treaty that determines which of the two States may tax, and a pension of French source frequently remains taxable in France. The analysis therefore starts from the treaty, not from local domestic law.

Hong Kong has opened several routes designed to attract skilled profiles without requiring a prior job offer.

The Top Talent Pass

The scheme distinguishes three categories. The first covers people whose annual income reached from HK$2,500,000¹³ in the year preceding the application. The other two are aimed at graduates of eligible universities, depending on whether or not they can show at least from 3 years¹⁴ of experience over the last five years.

The initial length of stay is 36 months¹⁵ for the first category and 24 months¹⁶ for the other two, with no condition attached other than the time limit — the holder is therefore not tied to any employer.

The investment route

The programme for investors requires a minimum net investment of HK$30,000,000¹⁷, or approximately about $3,800,000¹⁸, in permitted assets.

The gap with European thresholds is considerable: this programme is not aimed at the same audience as the Mediterranean schemes, and it is calibrated for substantial wealth.

The list of permitted assets and the obligations to maintain the investment do not appear in our sources: they must be verified with the competent authority.

One practical point deserves to be anticipated: permanent residence is acquired after a period of continuous stay, and it changes the holder's status — it is no longer tied to a visa. The conditions for this transition should be checked from the moment of arrival, because it is the continuity of the stay, and not merely its cumulative length, that is assessed.

Acquisition by a foreigner is possible without any special authorisation, but the Hong Kong market is one of the most expensive in the world relative to income, and one of the smallest in terms of living space.

Land belongs in principle to the State, with properties held under long-term leases. The remaining term of the lease attached to a property must be checked: it determines both its value and its financing capacity.

Acquisitions by non-residents have been subject to additional duties, as part of market-cooling measures, the level of which has varied over the cycles.

We do not publish the current level of duties applicable to non-resident buyers: these measures have been amended several times and we have no dated official source to cite.

For the vast majority of expatriates, the question therefore remains one of renting. Rents are high, leases are generally short, and the space obtained for a given budget bears no comparison with that of a European capital.

Finally, it should be noted that advertised floor areas are not always measured in the same way: the distinction between gross area and saleable area has long caused confusion in listings. Comparing two properties requires bringing prices back to the same basis of measurement, failing which the apparent difference is meaningless.

Hong Kong combines one of the lightest tax burdens in the world with one of the highest housing costs. The trade-off rests almost entirely on these two factors.

We do not publish a typical monthly budget: we have not found an official Hong Kong series measuring a basket of expenses comparable to that of an expatriate.

Three items shape a budget. Housing, by far the largest. International schooling, with waiting lists and, in some schools, debentures or capital levies payable in addition to annual fees. And healthcare, where the public system is inexpensive but overstretched, which pushes expatriates towards private care and insurance.

Conversely, the absence of value added tax and the moderate cost of transport and everyday dining ease daily life. The territory is expensive for housing and schooling, not for living.

1. Identify the applicable visa category, since the documents required and the duration granted depend directly on it;
2. plan schooling ahead, the most constrained item for a family;
3. open a local bank account, a step that requires a substantial compliance file;
4. for a business activity, have the source of profits characterised from the moment the structure is set up, rather than trying to justify it after the fact;
5. deal with the departure from France on its own criteria, as Hong Kong's territoriality settles nothing on that side.

The fourth point is the one that distinguishes solid files from the rest. Territoriality is not a status that one obtains; it is a characterisation that one demonstrates, transaction by transaction.

We do not publish processing times: we have no official, dated, quantified source for Hong Kong visas.

• Territoriality protects foreign-source income, but it has to be demonstrated. Substance requirements have become stricter.
• A visa does not confer tax residence, and Hong Kong tax residence does not mean you have left French tax domicile.
• Housing absorbs a share of income unmatched in European capitals: the tax advantage has to be assessed net of this item.
• The remaining term of land leases determines the value of a property.
• The political and legal context has changed since 2020: it is a project parameter, separate from taxation, and must be assessed on its own merits.

Finally, Hong Kong remains one of the few territories where an employee's tax is capped by design, thanks to the mechanism of the most favourable calculation. For a very high-income executive with no children to put through school, the gap with Europe is considerable; for a family, housing and schooling absorb most of it.