Hong Kong remains the easiest jurisdiction in Asia Pacific for accounting and tax compliance
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Hong Kong remains the easiest jurisdiction in Asia Pacific for accounting and tax compliance

19 June 2018

Hong Kong is the easiest jurisdiction in Asia Pacific for accounting and tax compliance, and fourth-easiest globally - according to TMF Group’s Financial Complexity Index 2018.

Hong Kong retains its position as the easiest jurisdiction in Asia Pacific for accounting and tax compliance, and fourth-easiest globally - according to TMF Group’s Financial Complexity Index 2018.

The leading provider of global business and compliance services ranked 94 jurisdictions across Europe, the Middle East, Africa, Asia Pacific and the Americas; 1 being most complex through to 94 the least complex.

While Hong Kong came in at 91st, China is at number 1 taking the top spot in this year’s Index. For a second year, the Cayman Islands came in at 94th as the least complex place for financial compliance.

To determine the rankings with its in-country experts, TMF Group used a 74-question survey with weighted complexity parameters, namely; regulatory compliance, tax, statutory reporting and bookkeeping.

The 10 most complex jurisdictions for financial compliance

 Global Ranking

 Jurisdiction

 Region

 1

 China

 APAC

 2

 Brazil 

 Americas

 3

 Turkey

 EMEA

 4

 Italy

 EMEA

 5

 Argentina

 Americas

 6

 France

 EMEA

 7

 Bolivia

 Americas

 8

 Colombia

 Americas

 9

 Mexico

 Americas

 10

 Russia

 EMEA

The 10 least complex jurisdictions for financial compliance

Global Ranking

Jurisdiction

Region

94

Cayman Islands

Americas

93

BVI

Americas

92

Jersey

EMEA

91

Hong Kong

APAC

90

Curacao

Americas

89

Afghanistan

APAC

88

Guyana

Americas

87

Norway

EMEA

86

Bangladesh

APAC

85

Singapore

APAC

Commenting on Hong Kong’s ranking, TMF Group’s Regional Director for Asia Pacific, Paolo Tavolato said: “Hong Kong has a much simpler taxation system compared to other jurisdictions. There are only three direct taxes in the city – salaries tax, corporate income tax and property tax – and no sales tax and VAT.

“The system also has some special features. Taxes are only levied on a territorial basis, which means that only income arising in or derived from Hong Kong is taxable; worldwide income is not taxable, no matter what the residential status of the taxpayers is.

“While Hong Kong is one of the least complex jurisdictions in the world for financial reporting, it still has some key regulatory requirements. For example, accounting records should be preserved for seven years and in case of non-compliance with bookkeeping requirements, directors are personally liable for a fine of HK$300,000.

“When it comes to cross-border business success, knowing and understanding the local requirements for financial compliance can prove vital. Seeking the support of in-country experts – such as TMF Hong Kong – allows companies of all sizes to maintain focus on their core business.”

Want to learn more about Hong Kong? Register here for our briefing session in Hong Kong on 20 June 2018.

You can also talk to us for further information.

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