Hong Kong vs UAE for IT: where is it cheaper in 2025

Hong Kong and the UAE as IT business centres

Choosing the best country where to open an IT business abroad is of significant strategic importance and requires a detailed analysis of many factors. Apart from the usual aspects - regulatory environment, economic and political stability, you should consider the qualifications and salary level of employees, tax rules and the level of infrastructural development.

• Preferential tax regime (8.25% corporate tax on the first 2 million HKD of profits).
• Absence of VAT, dividend tax.
• High quality infrastructure and market access to China and Asia.

However, high office rental costs (especially in central areas) and high IT salaries create significant costs.

• 100% foreign ownership is allowed without the need to involve a local partner.
• 0% income tax for legal entities.
• Relatively fast visa process for employees and their families.

Registering an IT company in Hong Kong vs UAE: factors affecting business activity

Both territories are recognised international centres of business activity, but their approaches to organising business activity have significant differences that should be taken into account when making a strategic decision on whether it is better to register an IT company in Hong Kong or the UAE.

Hong Kong: business stability and flexible tax system

Hong Kong has been a developed global trading hub for decades. Its economy is based on free market principles, openness and a high degree of legal predictability. To set up an IT company in the UAE, the participation of local shareholders or partners is not mandatory. This allows foreign owners to fully control their business. There are also no strict requirements to have local directors, which makes the management process more flexible.

The country's tax policy is another key factor in its popularity. The main principle of taxation here is territoriality, which means that income earned outside the region is not subject to taxation. The developed system for FinTech startups includes access to external financing and participation in government initiatives. High-speed internet, advanced digital services and the level of automation make Hong Kong an optimal location for technology startups.

UAE: liberalising the economy and supporting scientific and technological progress

Over the past two decades, the Arab Emirates has transformed from a regional player to a global centre for attracting investment. This has been facilitated by large-scale reforms aimed at improving the business regime, creating specialised free zones and modernising the legislative framework. It is possible to establish an IT company in the UAE either on the Mainland or in Free Zones. Each form of presence has its own peculiarities, but they have a common advantage - attractive conditions for doing business. Free Zones have no income tax, favourable rules for employment of foreign employees, and no requirement for local partners.

The country's legislators are actively developing innovation clusters and technology parks, including Dubai Silicon Oasis and Dubai Internet City, where entrepreneurs have access to incubators, accelerators, government grants, state-of-the-art laboratories and coworking spaces. Initiatives on digitalisation and automation of business processes allow for the effective development of IT projects, startups in blockchain technology, fintech and artificial intelligence.

In addition, the government pursues a consistent policy of supporting entrepreneurship through state funds and development institutions. Various subsidy programmes, loans, and co-financing of innovative projects allow startups to quickly enter the market and receive the necessary financial and technical support at early stages.

Assessing the external economic environment: benchmarks and ratings

International ratings assessing the ease of business administration and the competitiveness of economies will help you decide whether it is favourable to register an IT company in Hong Kong or the UAE. Familiarising yourself with these ratings will give you an objective picture of the conditions in which young companies will develop. One of the most authoritative ratings in business circles is Business Ready. Both countries are ranked among the best in Business Ready, with Hong Kong confidently holding its position in the top ten of the 50 most advanced economies.

According to the Heritage Foundation, Hong Kong was ranked 2nd in Asia and 14th in the world on the Property Rights Protection Index. The local judicial system is highly trusted not only by Asian but also by international investors. The UAE, despite the peculiarities of its legal system, which includes Islamic law and local traditions, also demonstrates serious progress in the protection of private property. FEZs have a light regulatory regime, which eliminates the need for local partners. With a Property Rights Index (IPRI) score of 6.157, the Emirates ranks 3rd among the states in the region and 31st in the global list.

Simplified access to finance

One of the key aspects determining the choice of the UAE vs Hong Kong for IT business is the ability to raise capital and interact with investment institutions. In this context, Hong Kong has a significant advantage due to its status as a global financial centre. There is a well-developed system of venture capital funds, dozens of angel investors, a number of programmes aimed at supporting small businesses through government subsidies and grants.

The UAE demonstrates high rates of development of the investment environment. During the implementation of the Dubai Future Foundation and Abu Dhabi Catalyst Partners, the state and the private sector are actively investing in innovative projects. Local funds willingly finance startups at the early and medium development stage and provide platforms for project presentations to potential investors.

Hong Kong vs UAE for IT: where it's cheaper in 2025

The development of technology is blurring the boundaries for entrepreneurs, but the choice of jurisdiction still has a significant impact on the success of IT startups. The top jurisdictions for setting up an IT business in 2025 include Hong Kong and the United Arab Emirates, but the cost structure, administrative requirements, and fiscal burden differ significantly.

To objectively compare where it is cheaper to run an IT business in Hong Kong or the UAE, it is important to consider the full range of costs, including:

• Company registration and administrative fees.
• Corporate and other taxes.
• Operating costs (rent, salaries).
• Licensing and regulatory fees.
• Legal and accounting support costs.
• Migration costs and processing of work visas.

Registration of an IT business in Hong Kong is a fast and smooth process. If all documents are submitted online, the company can be registered in 1-3 days. The government fee is around 1,720 HKD (~220 USD), making this jurisdiction one of the most affordable international business centres in terms of start-up costs. Registration with the tax office and opening a bank account is required (a complicated process for non-residents). There is a personal presence requirement for non-residents and the process can take several weeks to a month. The formal minimum registered capital for Hong Kong company incorporation is HKD 1 (but recommended HKD 10,000). A local secretary (a third-party firm can act, costing 800-1,200 USD per year) and a physical address (renting a virtual office costs from 200 USD per year) are mandatory.

IT business registration in the UAE is mainly concentrated in Free Zones, each with its own regulations and price points. Registration takes 3-5 business days, but the cost is significantly higher:

• Registration fees range from 10,000 to 20,000 AED (~2,700-5,400 USD).
• In some cases, this amount already includes office rent (e.g. flexi-desk), operating licence and administration.

A mandatory requirement is a resident visa for owners and employees, which entails additional costs.

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Hong Kong vs UAE: where it is more favourable to register an IT business in terms of operating and tax costs

An important aspect for any business, especially one operating internationally, is the tax burden. Hong Kong and UAE apply two different approaches, and each of them has its own strengths. As we have already said, Hong Kong uses the territorial principle of taxation, which means: taxes are paid only on income earned within the territory. If an IT company works mainly with foreign clients and does not conduct commercial activities within the region, it can be completely exempt from corporate tax. This makes Hong Kong one of the most attractive locations for export-oriented IT projects.

When paying tax in Hong Kong, a system with increasing rates applies:

• 8.25% on the first 2 million HKD (about 255,000 USD);
• 16.5% on profits above this threshold.

In the UAE, the situation has changed in recent years. From 2023, amendments to the corporate law were implemented, which resulted in the introduction of a 9% tax on profits above 375,000 AED (~102,000 USD). There is also a 5% VAT rate applicable under certain conditions, in particular, if the annual turnover exceeds the established limit (100,000 USD). However, a number of free zones retain exemptions if a number of requirements are met. In addition, there is no dividend tax in both Hong Kong and the Emirates.

The next most important factor to be taken into consideration when choosing whether it is better to register an IT business in the UAE or Hong Kong is the monthly operating costs. Hong Kong is known for its high cost of renting office space. Renting a traditional office here can be quite costly, especially in the central areas. However, many IT companies favour virtual offices and co-working spaces, which are significantly cheaper and fit the flexible format of remote working. This allows them to optimise costs without losing access to a prestigious address and business services.

Salaries for IT specialists in Hong Kong range from 2,500 to 5,000 USD per month (depending on skill level and experience). These are quite competitive rates compared to other regions in Asia. In addition, Hong Kong offers a well-developed technology infrastructure. Utility costs in Hong Kong can be called moderate - maintaining an office for 5-6 people costs 150-300 USD per month. This makes the overall level of operating costs acceptable with reasonable optimisation of rental costs.

The situation is different in the UAE. Renting an office in Dubai or Abu Dhabi can cost from 500 to 1,500 USD per month, but when registering an IT company in the UAE free zone, a flexi-desk - a workplace in a co-working space, which is often included in the registration package - can be provided. This is convenient for startups and small businesses, as it helps minimise start-up costs. Meanwhile, office fees in freezones start from 4,000 USD per year for a small office/workspace (prices depend on location and type of office).

Hong Kong vs UAE for IT business: where is it cheaper in terms of licensing

The cost of licences, the requirements for obtaining them and the associated costs may become determining factors when choosing a jurisdiction for registering an IT business. Hong Kong and the UAE are developing innovative economies, attracting startups and offering favourable conditions, but in terms of licensing, there are significant differences between them. Let's look at where it is cheaper to start and run an IT business - in Hong Kong or the UAE.

The peculiarity of Hong Kong is that most activities, including the IT sector, do not require licences. The only exceptions are areas related to finance (fintech, crypto-services, payment systems), telecommunications and personal data processing. A standard IT company engaged in software development, mobile application development, cloud services or IT consulting does not require a licence in Hong Kong. The annual renewal includes payment of a registration fee with the Registrar of Companies - HKD 105-180 (USD 13-23). Thus, the main financial burden is not the licence, but the registration and administrative costs.

If an IT company operates in the cryptocurrency sector, a virtual asset licence from the Securities and Futures Commission (SFC) is required, effective from 2023. This is already a complex and expensive process - the cost of obtaining a licence can be as high as USD 150,000-250,000, including preparation of compliance documentation, hiring a local director and technology infrastructure.

Unlike Hong Kong, in the UAE any commercial activity requires a licence (regardless of the business area). The cost of obtaining an IT licence in the UAE varies from 4,000 to 15,000 USD per year depending on the zone, services included (number of visas, office rent) and type of company. For example:

• in RAKEZ a basic IT licence will cost about 4,000-6,000 USD;
• in Dubai Internet City the starting price can be 10,000-15,000 USD, not including office rent.

At the same time, a licence is issued for strictly defined types of activities, and in some cases it may be necessary to obtain several licences if a company operates in related sectors (e.g. IT consulting + software development + web design).

Legal and accounting services, personnel expenses

When deciding where it is cheaper to register an IT business in 2025 - Hong Kong vs UAE, it is important to take into account the cost of corporate accounting and legal support. In Hong Kong, accounting services cost on average from 1,000 to 3,000 USD per year. This cost range is driven by the degree of company activity: businesses with a small number of transactions and a limited number of counterparties will be cheaper to service, while more active companies with international transactions require complex accounting and therefore higher costs.

Legal services for IT businesses in Hong Kong are relatively affordable due to the high level of openness and predictability of the local legal system. For IT companies, especially those operating in the B2B sector or developing software for international clients, this means minimal contractual risks and clear legal requirements.

The costs of accounting and legal support for IT-business in the UAE are much higher, 3,000 - 7,000 USD per year. This difference is primarily due to the peculiarities of local regulation and diversity of structures. Companies registered in free zones face the need for double interaction - both with the zone administration and with federal authorities.

In addition, with active operations and international contracts, there is an increased need for highly qualified specialists familiar with international accounting standards and legal practices. These services are usually provided by international consulting companies or licensed local providers, which affects the cost. It is also worth noting that the introduction of corporate tax in the UAE has increased reporting and auditing requirements, which automatically increases the cost of professional support.

The second important factor determining the choice of a country to register an IT company is personnel costs, especially in the context of work visas, hiring foreigners and administrative procedures. Hong Kong is a developed market with a high level of competition for skilled professionals, especially in the technology sector. However, in order to hire a foreign employee, an employer needs to apply for a work visa. This procedure requires not only the cost of collecting and submitting documents, but also approval from the migration department. One of the key factors here is the existence of a justification as to why the vacancy cannot be filled by a local specialist. In addition to legal costs, visa processing takes time, and quotas for foreign workers are limited. This can be an obstacle when scaling up quickly or recruiting a team with international expertise.

Things are comparatively easier in the UAE. Here, visas are issued through a system of resident visas and work permits, and the situation is particularly favourable in free zones, where companies can hire foreign employees without restrictions. The cost of a visa ranges from 2,000 to 5,000 AED (approximately 550-1,350 USD) per employee. This amount includes not only the cost of the visa itself, but also medical insurance, tests, Emirates ID and other related procedures.

In addition, thanks to the business-oriented policy of the UAE government, the process of obtaining visas often takes place in a short time - from a few days to two weeks. This makes the country attractive to fast-growing IT start-ups and companies that are actively recruiting specialists from India, Europe and CIS countries.

Conclusion

Hong Kong or UAE for IT: where is cheaper in 2025? When looking at the startup environment, Hong Kong remains the more affordable option on a number of key parameters. Firstly, there is a low tax burden here - income tax is 8.25% on the first 2 million HKD, there is no VAT, dividend tax, which is favourable for IT service companies. Opening an IT company in Hong Kong is cheaper than in the UAE, especially given the lower costs of compliance, mandatory offices, visas.

In the Emirates, despite the absence of corporate tax in free economic zones (subject to certain conditions), the costs of starting a business are higher: you need to rent a physical office, issue resident visas, and annually renew the licence. In addition, in the UAE there may be difficulties with banks when opening an account for non-residents. At the same time, both regions provide a high degree of business freedom, a stable legal system, and access to international markets.

That is, when choosing a jurisdiction where to register an IT-company, the important factors are not only the status and opportunities offered by this or that country, but also the cost level, which directly affects the sustainability and speed of business development. Company registration, the cost of legal support, accounting and licensing, office rental and infrastructure costs, payroll, taxes and mandatory contributions - all this forms the total cost of doing business.

In conditions of accelerated technological progress, high competition and the need to scale up quickly, it becomes important to choose a location where it is possible not just to cut costs, but to reduce them without compromising the quality of development. It is in this context that the question increasingly arises: where is it cheaper to develop an IT business - in Hong Kong or the UAE?

Although the answer depends on the scale of the project, licensing needs, team size, and the availability of partnerships, in any case, a detailed analysis of the cost component becomes an integral stage of strategic planning. Our firm's experts help potential clients choose between Hong Kong and the UAE for IT business incorporation by scrutinising their specific entrepreneurial goals and long-term development strategy.