Dubai and Hong Kong are both similarly attractive locations to set up offshore companies. Both have advanced business ecosystems and a strong rule of law, but also have deal-breaking differences in costs and rules that lie just beneath the surface. In this article, we’ll go over those differences to help entrepreneurs decide which city they should incorporate in.
Dubai in particular has slight differences in costs between its free zones. To maintain clarity, we’ll focus on the Ras Al Khaimah International Corporate Centre (RAKICC) zone, as it is the most affordable of all the zones in Dubai.
Incorporation Procedures and Requirements
When comparing the incorporation of offshore companies, both Hong Kong and Dubai offer streamlined, fully remote processes that do not need the founder’s physical presence. Both jurisdictions rely on a registered agent to handle documentation and liaise with the respective registries. However, Hong Kong’s system is exceptionally digitized and often faster, with incorporations possible within three days, needing just a passport copy and proof of address. Dubai, while also highly efficient with a turnaround of 2-5 days, generally requires a slightly more detailed KYC submission from the outset, often including a CV and a brief business plan, making its initial due diligence feel a bit more comprehensive than Hong Kong’s.
Financially, both jurisdictions provide significant flexibility by having no minimum paid-up share capital requirement, allowing founders to establish their companies with a nominal amount.
The biggest difference lies in the overall incorporation cost. Hong Kong stands out as the more economical option, with minimal all-inclusive incorporation costs, covering government and agent fees starting below US$1,000 for a one year certificate. For the same certificate, Dubai charges a higher entry cost, with total setup fees starting at US$ 1,800. This positions Hong Kong as the more accessible jurisdiction for entrepreneurs on a tighter budget, whereas Dubai is positioned more as a competitive mid-range option.
Assuming a one-year certificate, the minimum cost to renew in Hong Kong is around US$283 per year, while in the RAKICC a renewal would cost US$1,200.
| Hong Kong (US$) | Dubai (RAKICC) (US$) | |
| Government Fees | $491 | $650 – $1,000 |
| Agent Fees | $300 – $2,850+ | $800 – $1,500+ |
| Notarisation & Apostille Fees | $130 – $400+ | $310+ |
| Renewal | $283 | $1,200 |
Appointing a Company Secretary
Both regions require at least one shareholder, one director, and company secretary and a local registered address to establish a company.
The key difference lies in who can be assigned the roles. In Dubai, the lone director can also be the company secretary, but in Hong Kong the roles must be taken by separate individuals. Both cities allow non-residents to be directors of offshore companies.
Opening a Business Bank Account
For conventional banks, the most critical difference between Hong Kong and Dubai is the requirement for physical presence.
Banks in Dubai mandate that shareholders visit in person for the final stages of opening an account for an offshore company, a process that can take over a month to complete. By contrast, while Hong Kong’s traditional banks also have rigorous checks, they also offer more flexibility, with some major banks allowing for remote verification or meetings at their overseas branches, making it more accommodating for non-residents.
This contrast is even sharper among digital banks of both cities. Hong Kong boasts a more mature and diverse ecosystem of virtual banks and fintech platforms that are well-versed in remotely onboarding international businesses, offering a completely online application and faster approval times, often within 1-3 days. Dubai’s digital banking landscape for businesses by comparison is still in its infancy, with banks like Wio and Mashreq NeoBiz being the few options that offer a fully digital onboarding experience. This makes Hong Kong the more accessible and efficient jurisdiction for non-residents seeking a fully digital banking experience for their offshore companies.
Profits Tax Regime
By far the most attractive reason foreign business owners flock to incorporate in Dubai is for its tax-free zones, where offshore companies in the RAKICC free zone are not taxed on their profits for a maximum of 50 years, on condition that their income comes from outside the UAE. Note that other free zones may have slightly different terms.
Offshore companies in Hong Kong can also file for offshore profits tax claims for income not sourced from Hong Kong by separating it from their Hong Kong-sourced income and reporting the claim on their profits tax return. Locally sourced assessable profits will otherwise be taxed at a rate of 8.25% on the first HK$2,000,000, and 16.5% on any remaining assessable profits over the first HK$2,000,000.
| Assessable Profits (HK$) | Tax Rate |
| First 2 million | 8.25% |
| Remaining profits above first 2 million | 16.5% |
Audits
While Dubai does not have an audit requirement due to not imposing any taxes, they do require businesses to maintain financial records for up to seven years. Offshore companies in Hong Kong must file an Annual Return with the Companies Registry through the company secretary within 42 days of issuance. A profits tax return must also be filed along with audited financial statements to the Inland Revenue Department even if the company is dormant.
Conclusion
Dubai and Hong Kong are among the top choices for setting up offshore companies, thanks to their attractive tax regimes, ease of incorporating, and ease of opening a business bank account. Both cities have their pros and cons, which we have hopefully shed light on in this comparison. If you have questions about your specific situation, reach out to us and we’d be happy to help!
