Understanding the Hong Kong customs and trade environment

The Hong Kong Special Administration Region of the People’s Republic of China is a free port and does not levy customs tariffs on import, impose tariff quotas or surcharges and there is no system of value added tax or equivalent.  This makes Hong Kong a popular trading hub for the Asia Pacific region and it is frequently used as a gateway to southern China.  Consequently, many of the customs and trade challenges faced by companies are to do with managing transit, transshipment and temporary importation.

Excise duties are levied on four types of goods, irrespective of whether they are imported or locally manufactured.  These goods are liquors, tobacco, hydrocarbon oil and methyl alcohol.  For tobacco, hydrocarbon oil and methyl alcohol, duties are charged at specific rates per unit quantity.  For liquors, duty is assessed at different percentages of their values on the basis of three different categories defined broadly according to alcoholic strength.

Traders usually interact with the following three major authorities when undertaking import or export activities:

  1. Customs and Excise Department: Responsible for the enforcement of Customs and trade laws, trade facilitation schemes, consumer protection, goods and documents inspection, trade controls and the collection of import related taxes in Hong Kong.
  2. Census and Statistics Department: Responsible for trade administration (including administration of trade declarations and cargo manifests) and management of trade and cargo statistics.
  3. Trade and Industry Department: Responsible for facilitating the development of trade policies and foreign trade relations as well as maintaining trade security measures including import/ export licensing and export controls.