Hong Kong to USA Investment Guide
No capital controls, full currency convertibility, and gateway to American investment
Hong Kong Investment Advantages
Transfer Limit
Capital Gains Tax
Profits Tax (first HKD 2M)
Withholding on Dividends
Full Capital Account Openness
Unlike mainland China, Hong Kong maintains complete capital account openness under the "One Country, Two Systems" framework. This makes it the primary hub for Greater China investment into the USA.
What You Can Do Freely
- Wire any amount to USA
- Convert HKD to USD unlimited
- Open foreign bank accounts
- Hold foreign securities
- Make overseas investments
HKD-USD Peg
- Linked Exchange Rate System
- Trading band: 7.75-7.85 HKD/USD
- Stable since 1983
- No currency conversion risk
Getting Money to Hong Kong
The challenge is often getting funds from mainland China to Hong Kong, not from Hong Kong to USA.
Legitimate Sources
- HK employment income
- HK business profits
- Trade payments for HK goods/services
- Dividends from HK companies
- Assets held before 1997
Cross-Border Programs
- Stock Connect (securities only)
- Bond Connect (bonds only)
- Wealth Management Connect (GBA)
- QDII through HK subsidiaries
Hong Kong Company Formation
HK Private Limited Company
A Hong Kong Private Company Limited by Shares is the most common structure for holding US investments.
Requirements
- Minimum 1 shareholder (any nationality)
- Minimum 1 director (any nationality)
- Company secretary (HK resident or HK company)
- Registered office in Hong Kong
- No minimum capital requirement
Formation Process
- Name approval: 1-2 days
- Incorporation: 1-3 days
- Business registration: Same day
- Bank account: 2-4 weeks
- Total cost: HKD 5,000-15,000
HK Company as US Investment Vehicle
Using an HK company to hold US investments provides liability protection and may offer tax benefits.
| Structure | US Tax Treatment | Best For |
|---|---|---|
| HK Co owns US LLC | ECI taxed at corporate rates | Active business operations |
| HK Co owns US stocks | 30% dividend withholding (no treaty) | Not recommended for stocks |
| HK Co owns US real estate via LLC | FIRPTA on sale, ECI on rental | Rental properties |
Hong Kong Banking
Opening HK Bank Accounts
Hong Kong banks are experienced with international transfers and can wire funds to the USA efficiently.
Major Banks
- HSBC Hong Kong
- Hang Seng Bank
- Standard Chartered HK
- Bank of China (Hong Kong)
- DBS Hong Kong
Account Requirements
- Personal: ID + address proof
- Corporate: Incorporation docs
- Source of funds documentation
- Business plan for new companies
- In-person visit usually required
Wiring to USA
HK banks can wire unlimited amounts to US bank accounts. For large transfers, prepare documentation.
Wire Details
- No amount restrictions
- Same-day or next-day transfers
- Fees: HKD 100-250 typically
- Correspondent bank fees may apply
Documentation for Large Wires
- Purpose of transfer letter
- Supporting contracts
- Invoice or purchase agreement
- Source of funds explanation
US Entity Structure
Recommended US Structures
For Real Estate
- Single-member LLC in property state
- Owned by HK company
- EIN for US bank account
- FIRPTA withholding on sale
- Consider estate tax implications
For Active Business
- Delaware LLC or C-Corp
- HK parent as sole member/shareholder
- Proper transfer pricing required
- May need registered agent
- Annual compliance filings
Tax Considerations
No US-HK Tax Treaty
Unlike mainland China, Hong Kong does not have a comprehensive tax treaty with the USA. This means default withholding rates apply.
| Income Type | US Withholding Rate | Notes |
|---|---|---|
| Dividends | 30% | No treaty reduction |
| Interest | 30% | Portfolio interest exemption may apply |
| Royalties | 30% | No treaty reduction |
| Rental income | 30% gross or ECI election | ECI election usually better |
Hong Kong Territorial Tax System
Hong Kong only taxes profits arising in or derived from Hong Kong. Foreign-source income is generally not taxed.
HK Tax Benefits
- Profits tax: 8.25%/16.5%
- No capital gains tax
- No withholding on dividends
- No worldwide taxation
- US rental income likely not HK taxable
Considerations
- Substance requirements increasing
- Transfer pricing rules
- OECD BEPS compliance
- Consult HK tax advisor
US Compliance Requirements
OFAC and Sanctions
Hong Kong is not subject to comprehensive US sanctions, but individual and entity-specific sanctions apply. OFAC screening is required for all transfers.
Foreign Entity Reporting
HK companies with US activities may have various US reporting obligations.
Potential Filings
- Form 5472 (foreign-owned LLC)
- Form 1120-F (foreign corporation)
- FIRPTA withholding certificates
- State tax filings
For HK Individuals
- ITIN application
- Form W-8BEN for investments
- Form 1040-NR if US income
- State returns if applicable