Establish a Hong Kong parent company and a Mainland China wholly foreign-owned enterprise through one coordinated engagement. We support company incorporation, registered addresses, accounting, tax compliance and bank-account applications—with structuring guidance tailored to your ownership, business scope and profit-repatriation plans.
Information updated: 26 August 2026
The Strategic Advantage
Under the Mainland China–Hong Kong tax arrangement, a 5% rate may apply when the Hong Kong beneficial owner directly holds at least 25% of the Mainland company and the relevant residence, substance and anti-avoidance conditions are satisfied.
Hong Kong generally taxes profits arising in or derived from Hong Kong. Where profit-producing activities take place outside Hong Kong, an offshore claim may be available, subject to the facts, evidence and applicable foreign-sourced income rules.
A Hong Kong parent can separate regional ownership and selected assets from day-to-day Mainland operations. Any IP ownership, licensing and service arrangements should reflect actual functions and be documented on arm's-length terms.
After a lawful dividend distribution clears Mainland tax, audit and foreign-exchange procedures, funds received in Hong Kong can support regional reinvestment, approved operating expenses or shareholder distributions, subject to bank KYC and applicable law.
Tax Efficiency
This simplified example shows the potential treaty-rate difference. It is not a tax opinion and excludes surcharges, tax credits, transaction costs and shareholder-level taxation.
| Scenario | Illustrative 10% Rate | Potential 5% Treaty Rate |
|---|---|---|
| China WFOE Profit | $1,000,000 | $1,000,000 |
| China CIT (25%) | ($250,000) | ($250,000) |
| Net Profit after CIT | $750,000 | $750,000 |
| Withholding Tax on Dividend | 10% ($75,000) | 5% ($37,500), if eligible |
| Hong Kong Profits Tax | Not applicable | Determined separately under Hong Kong source rules |
| ILLUSTRATIVE WITHHOLDING-TAX DIFFERENCE | — | $37,500 |
The 5% treaty ceiling is not automatic. The Hong Kong recipient must meet the shareholding and beneficial-ownership conditions and pass applicable residence, substance and anti-avoidance tests. We help coordinate the corporate, accounting and documentary workstreams; tax treatment should be confirmed for your facts.
Process
A coordinated three-stage process—from structure design and incorporation to operational compliance and banking support.
We incorporate the Hong Kong company, arrange its registered address and company secretary, prepare the statutory records, and map the ownership and governance framework for its role as parent company.
The Hong Kong company becomes shareholder of the Mainland entity. We coordinate name approval, business scope, registered address, constitutional documents, business registration and post-incorporation onboarding.
We coordinate recurring accounting and tax filings, bank-account support and the records required for related-party transactions. Dividend repatriation remains subject to distributable profits, tax compliance, audit and foreign-exchange procedures.
Substance & Compliance
A registered address and company secretary are statutory foundations—not, by themselves, proof of treaty eligibility or an offshore profits claim. The appropriate level of people, premises, governance and records depends on what the Hong Kong company actually does.
Included for one year for both entities: a Hong Kong registered address and an eligible business address in Shenzhen or Guangzhou, subject to the proposed activity and local acceptance.
Included for one year in Hong Kong. For the Mainland entity, we coordinate the required company registrations, statutory roles and recurring filings based on current local requirements.
We guide you on maintaining board resolutions, contracts, invoices and supporting records that accurately reflect where decisions are made and where profit-producing activities take place.
Investor Fit
The structure is most useful when Hong Kong has a genuine commercial role and the Mainland entity requires a clear foreign shareholder, local operating platform and compliant route for future distributions.
The Pricing
One coordinated scope covering formation and first-year compliance for the Hong Kong parent company and Mainland China WFOE.
For founders seeking a coordinated cross-border structure with practical incorporation and first-year compliance support.
What's included in this integrated package:
Much of the incorporation work can be handled remotely. Bank onboarding is subject to each institution's KYC, business-profile and interview requirements; an in-person visit may be required. Bank approval is not guaranteed.
Download the Hong Kong and China company setup brochure (PDF) for the detailed scope, assumptions and document checklist.
Legal Requirements
A practical overview for initial planning. Final requirements depend on the Mainland city, business scope, licensing status and current authority practice.
HK: At least one shareholder. China: At least one shareholder for a limited liability company.
The Hong Kong company may hold the Mainland WFOE, subject to foreign-investment restrictions and registration review.
HK: At least one natural-person director. China: A legal representative and the governance roles required by the adopted structure.
Identity, residency and KYC documents must be prepared for the relevant officeholders.
HK: No general statutory minimum for an ordinary private company.
China: Capital should match the operating plan and is generally subject to the statutory contribution period and any sector-specific rules.
HK: A Hong Kong-resident individual or Hong Kong corporate secretary is required. China: Required governance roles depend on the company structure and current Company Law.
Hong Kong company secretary service and Mainland registration coordination are included.
HK: Registered office in Hong Kong. China: An address accepted for the approved business scope and local registration.
Address service is included for one year, subject to eligibility and local approval.
Requirements vary by bank and applicant profile. Directors, beneficial owners or the Mainland legal representative may need to attend an interview or provide additional evidence.
FAQ
Key information for foreign investors considering the Hong Kong holding company and China WFOE structure.
Our guidance is informed by the Mainland China–Hong Kong tax arrangement, the Hong Kong Inland Revenue Department's profits-tax guidance, and the PRC State Council's registered-capital rules. Tax outcomes, foreign-investment eligibility and banking approval depend on the applicant's facts and the authorities' or bank's review.
Illustrations on this page are general information only and do not constitute legal, tax or investment advice. A written assessment should be obtained before implementing the structure or entering related-party transactions.
Tell us your proposed business activity, ownership, Mainland city, target customers and banking needs. We will identify the likely setup route, key risks, required documents and next steps before you commit.
Our multilingual team speaks: English, Chinese, Russian, Burmese, Thai, Tagalog, Bahasa, and Kazakh.
Our professional & multilingual team is ready to assist you with your post operating concerns.
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29, Sukhumvit Soi 39, Phrom Phong, 10110, Bangkok
sales@unionspace.com
(+66) 02 0360 600
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