LLC × residence calculator · Edition 2026.09
If you lived in Hong Kong: how much tax you would pay on your LLC profit
Hong Kong only taxes profit that 'arises in or is derived from' Hong Kong (IRO s.14). For services, source is fixed by where the service is performed, not where the client sits (DIPN 21): if you work from outside Hong Kong, the LLC's profit is foreign-source and untaxed. If you physically work from Hong Kong, it is Hong Kong-sourced even if every client is abroad.
Isaac Cubero · Checked on 14 September 2026 · territorial
At $100,000 of profit
On $100,000 of LLC profit, living in Hong Kong, you would pay $0 income tax (territorial regime), with conditions.
territorial
| Profits tax if the profit were Hong Kong-sourced | $0 |
| Estimated total | $0 |
Sources: IRD, Departmental Interpretation and Practice Notes No. 21 (revised, Jul 2012), 'Locality of Profits' · IRD, FAQ on the Two-tiered Profits Tax Rates regime (with worked example) · IRD, leaflet PAM 39(e) 'A guide to Salaries Tax (1)', issued May 2026 · IRD, FAQ on the FSIE (Foreign-Sourced Income Exemption) regime · Fixed exchange rate 7.84 HKD/USD.
Rank 1 of 38 residences by effective rate at this profit.
- The work is physically performed outside Hong Kong: that is what makes the profit foreign-source and therefore untaxed.
- Year of assessment 2025/26, no rate changes announced for 2026/27.
- No Personal Assessment or Salaries Tax applied (not needed if the profit is not Hong Kong-sourced).
- The decisive test is where you physically work, not where the client is: if you run the LLC from Hong Kong, that profit falls into unincorporated-business profits tax (7.5% up to HKD 2,000,000, 15% above) or, if you elect Personal Assessment, the 2/6/10/14/17% scale capped at the standard rate (15% up to HKD 5,000,000 of net income, 16% above).
- FSIE (in force since 1 Jan 2024) does not touch individuals under any reading: it only reaches 'constituent entities of MNE groups'.
- There is no CFC regime for individuals in Hong Kong attributing undistributed profit.
- The source test is 'a hard, practical matter of fact' per the IRD itself: for a real case, an IRD Advance Ruling (DIPN 31) or a local adviser's confirmation is worth getting.
- IRD, Departmental Interpretation and Practice Notes No. 21 (revised, Jul 2012), 'Locality of Profits'
- IRD, FAQ on the Two-tiered Profits Tax Rates regime (with worked example)
- IRD, leaflet PAM 39(e) 'A guide to Salaries Tax (1)', issued May 2026
- IRD, FAQ on the FSIE (Foreign-Sourced Income Exemption) regime
- Fixed exchange rate 7.84 HKD/USD.
At three profit levels
What you would pay in Hong Kong depending on what your LLC earns.
| Annual profit | Estimated tax | Effective rate | You would keep |
|---|---|---|---|
| $50,000 | $0 | 0% | $50,000 |
| $100,000 | $0 | 0% | $100,000 |
| $250,000 | $0 | 0% | $250,000 |
And if it were not an LLC
The five cheapest structures from Hong Kong, distributing all the profit.
| Structure | Corporate | Withholding | You, in Hong Kong | Total |
|---|---|---|---|---|
| US LLC | $0 | $0 | $0 | 0%$0 |
| UAE free zone | $0 | $0 | $0 | 0%$0 |
| Hong Kong Ltd | $8,250 | $0 | $0 | 8.3%$8,250 |
| Limited company in Hong Kong | $8,250 | $0 | $0 | 8.3%$8,250 |
| Bulgarian EOOD | $10,000 | $4,500 | $0 | 14.5%$14,500 |
Frequently asked questions
Does a US LLC pay tax if I live in Hong Kong?
The LLC pays no US federal tax if it has no US activity. Hong Kong only taxes profit that 'arises in or is derived from' Hong Kong (IRO s.14). For services, source is fixed by where the service is performed, not where the client sits (DIPN 21): if you work from outside Hong Kong, the LLC's profit is foreign-source and untaxed. If you physically work from Hong Kong, it is Hong Kong-sourced even if every client is abroad.
How much would I pay in Hong Kong on $100,000 of profit?
On $100,000 of LLC profit, living in Hong Kong, you would pay $0 income tax (territorial regime), with conditions. The decisive test is where you physically work, not where the client is: if you run the LLC from Hong Kong, that profit falls into unincorporated-business profits tax (7.5% up to HKD 2,000,000, 15% above) or, if you elect Personal Assessment, the 2/6/10/14/17% scale capped at the standard rate (15% up to HKD 5,000,000 of net income, 16% above).
Is Hong Kong a territorial country?
Yes: it only taxes local-source income. The profit of an LLC operated from abroad is not taxed, provided the work is rendered outside Hong Kong.
Next
The figure is the start. The structure is the decision.
To see Hong Kong against the other 37 residences: the full ladder.