UAE or Hong Kong: where to incorporate a company for trading with China
Author: Airys, Client work and jurisdiction choice, DubaiPublished: Updated:
Short answer: the decision is not about tax, it is about where you live and where your goods go. If you buy in China and sell elsewhere and do not plan to live in the Emirates, Hong Kong is half the price to start and a third of the price to run, and it is the best-built jurisdiction in the world for settling with Chinese factories. The UAE is the choice when you need a residence visa, an office and a presence in Dubai, a predictable tax without an annual argument about offshore status, and when your customers and partners are in the Middle East.
We do both, so we have nothing to sell you in this decision except an honest calculation.
The numbers side by side
| Hong Kong | UAE, free zone | |
|---|---|---|
| Company, turnkey | $2,200 | $4,500 |
| Timeline | 5-7 working days | 1-3 weeks |
| Account | payment platform $600, traditional bank $1,900 | bank $1,900, non-residents almost always need a visit or video KYC |
| Residence visa | none | $4,500 for a 2-year investor visa |
| Running cost per year | from $1,100 plus audit | from $3,200 |
| Filings | audit and tax return once a year | depends on the zone, usually lighter, audit not mandatory everywhere |
| Corporate tax | 8.25% up to HK$2 million, 16.5% above; offshore profit can be claimed and substantiated | 0% on qualifying free zone income, otherwise 9% above AED 375,000; small business relief up to AED 3 million revenue until the end of 2026 |
Year one in Hong Kong with a payment platform account is $2,800. Year one in the UAE with a visa and an account is $4,500 plus $4,500 plus $1,900, about $10,900. The gap is not about the quality of the jurisdictions: in the UAE you are also buying the right to live there.
What Hong Kong gives you
Settling with China. Hong Kong is home turf for the Chinese side: offshore renminbi, a double taxation agreement with the mainland, banks and payment platforms that see these flows every day. A factory reads a Hong Kong company as a normal counterparty.
Speed and price. Five working days and $2,200, fully remote. Running costs from $1,100 a year.
Infrastructure for non-residents. Payment platforms onboard non-resident directors online in one to two weeks. A traditional bank will want a visit, but you can start without one.
One weak spot: offshore status for profits is not automatic, it has to be claimed and supported every year. Not frightening for a real business, but it is work and it is a tax adviser.
What the UAE gives you
Residency. The main reason people take an Emirates company. A two-year investor or partner visa, an Emirates ID, the ability to live there, rent, open personal accounts. A Hong Kong company gives none of that.
A predictable tax. A resident company with a clear rate: 0% on qualifying free zone income where conditions are met, 9% above AED 375,000 otherwise, small business relief until the end of 2026. No annual exercise of proving the profit arose somewhere else.
The Middle East as a market. If your customers are in the Gulf, Africa or India, a Dubai company is also a sales base, not only a payer.
The weak spots are real too. More expensive to start and to run. Banking for a non-resident is harder than in Hong Kong: a visit, six months of statements, a minimum balance. Economic substance requirements: the company has to look like a company, not a mailbox. And payments to China from the UAE go through fine, but the Chinese side understands them less readily than Hong Kong ones.
How to decide in one conversation
Three questions, and the answer is usually obvious.
Are you going to live in Dubai or need residency there? Yes: UAE, because the visa outweighs everything else. No: Hong Kong.
Where do the goods go? To the CIS, Europe, the US, anywhere except the Gulf: Hong Kong. To the Emirates and around the region: the UAE makes sense at least as a second company.
What is the turnover? Below $30,000 a month, UAE running costs eat a visible share of the margin. Hong Kong pays back faster, and we ran the numbers for the China side of that.
A pair of companies, an Emirati one for living and a Hong Kong one for settlement, is normal and common among people who live in Dubai and trade with China. But do not start with two: first the one you cannot do without, the second when turnover justifies it.
What we ask on the intro call
Where you live and whether you plan to move, where the goods come from and go to, rough monthly turnover, whether you already have companies and accounts. That is enough for a thirty-minute call and a straight answer, including the version where you need neither yet. Airys runs these calls from Dubai in English and Russian.
Questions
Can I open a UAE account without living there?
Formally yes, in practice it is hard. Banks expect a branch visit or a video call, ask for six months of statements from your home bank and hold a minimum average balance, AED 100,000 to 250,000 for non-residents at market rates. A residence visa and Emirates ID make it much easier, which is why a UAE company usually comes with a visa.
Is it true there is no tax in the UAE?
Not any more. Since 2023 corporate tax is 9% on profit above AED 375,000. Free zone companies pay 0% on qualifying income if the conditions are met, and companies with revenue under AED 3 million have small business relief until 31 December 2026. Check the qualifying conditions against your actual activity rather than assuming.
Does Hong Kong have tax?
Yes: 8.25% on the first HK$2 million of profit and 16.5% above. Profit sourced outside Hong Kong can be claimed as offshore and untaxed, but the Inland Revenue Department reviews that claim every year and you have to support it with documents. Do not count on zero by default.
What if I need both?
A normal pairing for people who live in Dubai and trade with China: the UAE company gives residency and presence, the Hong Kong company settles with the factories. Two sets of running costs make sense once turnover allows. On the intro call we usually start with one.