Hong Kong to India: questions Hong Kong companies ask

A subsidiary or joint venture needs Press Note 3 approval, and a branch or liaison office goes through the RBI with a security review. Map the ownership chain before anything else.

Approval comes before incorporation and funding; directors from land-border countries need Ministry of Home Affairs clearance, so many groups start with an Indian resident director.

Hong Kong applies the Apostille Convention in its own right through the High Court registry. Confirm acceptance with the Registrar and bank; consular legalisation is the fallback.

An Indian resident director is often the only practical first appointment while clearances for other directors are pending.

Hong Kong-side costs are modest; the real cost is the time taken by the approval.

Press Note 3 approval typically takes months, so plan the commercial timeline around it.

No money can be remitted for shares until approval is granted; Hong Kong itself imposes no exchange controls.

Approval conditions can affect pricing and later transfers; check the approval letter before any share movement.

The India–Hong Kong treaty, effective in India from 1 April 2019, sets 5% on dividends and 10% on interest, royalties and technical fees, with a principal purpose test.

Hong Kong generally does not tax foreign dividends under its territorial system, so the 5% Indian dividend rate is attractive where substance supports it.

Hong Kong trading hubs are the usual counterparty; the transfer price of goods should match the Indian customs value.

Services through employees for more than 183 days create a PE.

Hong Kong taxes profits territorially at 8.25% and 16.5%; large groups fall under Hong Kong's minimum top-up tax.

Track the conditions in the Press Note 3 approval letter alongside the usual Indian dates.

Hong Kong employment terms and MPF do not carry over to Indian contracts.

There is no social security agreement; a secondee can face MPF and Indian provident fund together.

Visa processing differs by passport, and land-border citizens face extra checks; confirm with the Indian mission before fixing dates.

The PDPO cross-border transfer section is not in force, but the regulator recommends model clauses.

Hong Kong is a reciprocating territory, unlike mainland China, and HKIAC awards are enforceable.

There is no trade agreement, and goods routed through Hong Kong keep their country of origin.

Approval timelines make capability centres from Hong Kong slower to start than from most countries.

A buyer from a land-border country also needs approval, and the exit must respect the original approval's conditions.