On May 22, 2025, the seminar themed “Hong Kong Ship Registration, Corporate Incorporation and Accounting System”, organized by the the United Shipbrokers Club, was successfully held in Shanghai. Pierre Wong, Co-Founder and Chief Operating Officer of Triide, was invited as a distinguished guest speaker. He delivered a comprehensive sharing on Hong Kong’s ship registration framework, corporate tax incentives, and a comparative analysis between the tax and accounting systems of Hong Kong and Singapore. His insightful remarks provided valuable practical guidance to over 50 attending professionals from the maritime industry.

Establishing a Hong Kong Company: A Strategic Gateway for Maritime Enterprises

Pierre Wong began by highlighting Hong Kong’s pivotal role in the global maritime sector: “Hong Kong ranks as the fourth largest ship registry globally, following Panama, the Marshall Islands, and Liberia. According to Hong Kong regulations, shipowners must be either Hong Kong individuals, companies, or non-Hong Kong entities registered in Hong Kong. Therefore, both mainland and international shipowners intending to register vessels in Hong Kong must first establish or register a company locally.”

Leveraging Triide’s extensive experience spanning over 12 years across Asia Pacific in business incorporation and enterprise advisory, Pierre Wong elaborated on six key advantages of incorporating a company in Hong Kong:

1. Strategic Location: A leading international financial center connecting Mainland China with global markets.
2. Flexible Corporate Structure: No requirement for local directors or shareholders; 100% foreign ownership permitted.
3. Competitive Tax Regime: No capital gains tax, dividend tax, or VAT.
4. World-Class Financial Infrastructure: Access to global banks and multi-currency accounts.
5. Robust Legal and Business Environment: Common law system, free capital movement, and high international credibility.
6. Capital Market Access: The Hong Kong Stock Exchange (HKEX) offers a well-established platform for corporate financing and public listings.

Pierre Wong also emphasized key compliance obligations post-incorporation, including annual return filings, submission of audited financial statements, and renewal of the Business Registration Certificate.

Hong Kong’s Tax Incentives for the Shipping Industry: Unlocking Strategic Opportunities

Pierre Wong proceeded to provide a detailed interpretation of Hong Kong’s preferential tax policies applicable to different categories within the maritime sector:

a) Ship Operators (Section 23B)

• Profits derived by Hong Kong resident or non-resident operators from vessel operations outside Hong Kong waters or departing from Hong Kong are generally exempt from profits tax.
• Entities must fulfil substantial economic presence requirements (i.e., sufficient staff and operating expenditure in Hong Kong).

b) Ship Leasing (Sections 14O–14ZB)

• Qualifying Ship Leasing Companies: Hong Kong-incorporated companies engaged exclusively in eligible leasing activities.
• Qualifying Ship Leasing Managers: Entities providing management services related to ship leasing.
• Tax Incentives:
  • Profits from qualifying leasing income: fully tax-exempt.
  • Management profits from related parties: tax-exempt.
  • Management profits from unrelated parties: subject to a reduced rate of 8.25% (standard rate: 16.5%).
• Companies must maintain substantive management and operational presence in Hong Kong.

c) Insurance-Related Activities (Sections 14ZC–14ZZC)

• Profits earned by direct insurers from designated general insurance businesses, including marine insurance, are taxed at a concessionary rate of 8.25%.

d) Shipping Commercial Principals (Sections 14O–14ZB)

• Eligible ship agents, managers, and brokers engaging in qualifying* maritime activities are subject to a profits tax rate of 8.25%.

*Qualifying activities include:

• Ship Agency: Port cargo handling, clearance applications, and port services coordination.
• Ship Broking: Facilitation of ship sales, charters, valuations, and owner-charterer matching.
• Ship Management: Technical, crewing, commercial, and insurance-related vessel management.

Eligibility Criteria for Tax Concessions

To benefit from the above-mentioned preferential tax treatments, commercial principals in the maritime sector must meet the following requirements:

1. Entity Requirements
   • Must be an independent legal entity incorporated in Hong Kong, primarily engaged in ship agency, management, or broking.
   • Minimum activity thresholds:
     • Ship agency: At least one qualifying transaction per annum.
     • Ship management: At least two qualifying activities per annum.
     • Ship broking: At least one qualifying deal per annum.
   • Under the Safe Harbour Rule, entities may conduct a limited portion of non-qualifying activities, provided that not less than 75% of their income and assets are related to qualifying activities.
   • Tax assessment may be conducted on a single-year basis or averaged over three consecutive years, depending on business stability.
2. Central Management and Control
   • Strategic decision-making must be executed in Hong Kong.
3. Substantial Economic Presence
   • Employ a minimum of one full-time qualified staff in Hong Kong.
   • Incur at least HKD 1 million in annual operating expenditure related to core qualifying activities.
   • Outsourcing of core functions to group entities is permissible, subject to arm’s length pricing and adequate oversight.

Hong Kong vs. Singapore: Strategic Considerations for Maritime Enterprises

Addressing the frequently asked question of whether to establish operations in Hong Kong or Singapore, Pierre Wong offered the following strategic insights:

• Hong Kong is the preferred jurisdiction for companies focused on North Asia, particularly Mainland China. It offers geographic proximity, a sophisticated banking system, over 40 double tax treaties, no local director requirement, flexible corporate structuring, and significant maritime tax benefits. It is particularly suitable for multinational groups and high-net-worth individuals. However, director information is publicly disclosed.

• Singapore, on the other hand, is advantageous for companies targeting Southeast Asia or global markets. With more than 80 tax treaties, digital incorporation processes, tax exemptions for start-ups, and a 0% GST rate for shipping services, Singapore is ideal for SMEs and early-stage enterprises. However, it requires a local director, features stricter bank account due diligence, and imposes relatively higher personal tax rates and CPF contribution obligations.

In the panel discussion, Pierre Wong was joined by Mr. Liu Xunliang, Co-Founder and Chairman of the United Shipbrokers Club, and Mr. Ni Zhao, Regional Director of the Hong Kong Ship Registry in Shanghai. Together, they addressed in-depth queries from shipowners regarding tax planning and regulatory compliance, earning widespread appreciation from attendees.

The seminar received highly positive feedback from industry representatives, and several shipowners engaged Pierre Wong in post-event consultations to explore specific business scenarios and implementation pathways.

With Hong Kong’s maritime tax incentive policies steadily expanding, now is an opportune moment for enterprises to strengthen their presence in the region.

Triide provides end-to-end corporate services, including company incorporation, accounting and financial reporting, tax compliance, HR and payroll management, company secretarial — delivering seamless support to businesses navigating cross-border expansion and regulatory complexity. Get in touch with Triide experts at gofurther@triide.com today.