Hong Kong follows an aggressive and one of the most liberal taxation policies for any country in the world. Several offshore companies are setup in the city purely to take advantage of the simplistic taxation laws. Many foreign entrepreneurs and investors are also continually attracted to the city due to its liberal taxation policy. Some of the highlights of the Hong Kong taxation system in 2011 are as follows:
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1) Following an aggressive approach to its taxation policy, Hong Kong has capped corporate tax rates at only 16.5 per cent. This is the lowest in Asia and ahead of all competitive nations in the continent. Taxes in the city have been gradually lowered for corporate houses and 2011 was no different from other years. A low corporate tax rate of only 16.5 per cent is also accompanied with several other tax incentives which effectively reduce the overall tax liability of a company even further.