Entrepot trade
Sources: Companies Registry, Inland Revenue Department, Mandatory Provident Fund Schemes Authority (as of September 2026)
For a trade structure that runs through a Hong Kong company as reseller or intermediary, profit attribution and the burden of proof for an offshore claim decide whether it holds. This page adds the parts that are usually left out, rather than repeating a six-step flow.
Profit attribution and the offshore claim
Hong Kong taxes on a territorial-source basis: only profits sourced in Hong Kong are taxed, but offshore is not automatic. The authority looks at what you did and where. If your main place of business is in Hong Kong and you have no overseas operation, profits will most likely still be taxed in Hong Kong. An offshore claim must be applied for and proved.
Profit split for processing trade
For contract (processing) trade, profits are generally split 50:50; import (buy-and-sell) processing does not qualify for that split.
Foreign-jurisdiction rules: keep it conservative
Transfer pricing, economic substance, the mainland controlled-foreign-company rules and CRS involve mainland tax law, which is outside Hong Kong law. Judgment and filing on these should be handled by a licensed provider familiar with the relevant jurisdiction. Do not write the structure as automatic, and do not skip these unstated risks.
Sources: Companies Registry, Inland Revenue Department, Mandatory Provident Fund Schemes Authority (as of September 2026)