Every Hong Kong limited company is required to submit an auditor's report (the domestic audit report) to the Inland Revenue Department of Hong Kong every year. In the auditor's report, the Hong Kong accountant will state in the report that the company's profits are earned outside Hong Kong. Profits for the year will not be subject to profits tax in Hong Kong if all the business in the year qualifies as overseas profits.
Then how to determine whether the Hong Kong company is earning overseas profits? Overseas profits are mainly determined from the following points:

1, cannot have employees in Hong Kong (the directors cannot be Hong Kong nationals) and lease office space; 

2, suppliers and customers cannot be local Hong Kong enterprises or individuals;

3, cannot contact customers through resources in Hong Kong. For example: Hong Kong exhibition, Hong Kong telephone, Hong Kong fax, Hong Kong email, etc.

4Contracts cannot be signed locally in Hong Kong;

5The goods cannot be processed locally in Hong Kong;

6, goods are usually shipped directly from one place to another or from overseas to another place without passing through Hong Kong...

If the above conditions for overseas profits are met, the company's profits, no matter how large, are not subject to profits tax.

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