eCommerce + Hong Kong Setup
- Thread starter mardz
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They can be useful to transfer rapidly foreign currencies (especially "exotic" currencies, since most HK banks already offer multi currency accounts and decent exchange rates) with low fees.
For example if you need to make a payment to Indonesia or Thailand in their local currency, which is not possible with all HK banks online.
For example if you need to make a payment to Indonesia or Thailand in their local currency, which is not possible with all HK banks online.
I don't have any experience with the intricacies of dealing with Germany's tax code, but I have been through the ringer with the US' IRS and HK's IRD. I would very strongly advise you against starting a new company in Hong Kong. You will have to prove that you are compliant with every box that needs to be checked to qualify for tax-free status every year. As was mentioned earlier in the thread, proving this to the IRD's satisfaction is going to cost both money and your time under the best of circumstances. Remember that you are always guilty of owing tax until you prove︀ otherwise. It's not like a Freezone company in the Middle East or IBC in other︁ jurisdictions where incorporating the right way equals zero tax for life. While simply paying the︂ tax for a year or two may be cheaper than all of the compliance hoops︃ you have to go through to get out of it, you run the risk of︄ getting hit extra hard when trying to claim you don't owe tax later. In addition︅ to proving you don't owe tax now they may demand that you prove how your︆ operation is materially different from when you paid the taxes you technically didn't owe. You'll︇ beat it, eventually, but all of this is a further time and money suck. Every︈ year there are more fees and compliance hoops (auditing of all accounts is both a︉ hassle and surprisingly high expense relative to the value provided rarely mentioned by people that︊ have never owned a HK company) that must be completed perfectly, even if you will︋ never actually owe tax. The red tape has been strongly moving in the wrong direction︌ for the last 7-10 years and shows no signs of easing up when everyone eligible︍ to run for public office is hand-picked by the CCP. In the current year Singapore︎ offers everything you would like about Hong Kong with fewer headaches and no risk of️ your structure being made obsolete by communists determined to transform Hong Kong into a crappier version of Shenzhen. If you believe polls 80% of Hong Kongers want to leave...that's never a good sign. Getting a bank account at a decent Singaporean bank isn't a cake walk anymore and will require a trip to Singapore (awesome city, make a vacation out of it) but it's nothing compared to trying to get an account in HK with less than $HK10m.
As a German citizen the US is a reasonably good offshore choice, but both state and federal tax codes are complicated enough that you do not want︀ to do this yourself based on a few things you read on the internet. Find︁ a decent lawyer in the state you will incorporate to set everything up properly. The︂ US is one of those jurisdictions that can be great to you if you set︃ everything up right the first time and an absolute nightmare if the slightest thing is︄ wrong. If you screw up your structure they can and will nail you to the︅ wall on a technicality. As a foreigner they'll probably be more interested in ripping you︆ off than sending you to minimum security prison, but still not something you want. Delaware︇ and Wyoming are common choices to incorporate, but Nevada, Florida, Texas and South Dakota offer︈ zero corporate tax without the scummy feeling a Wilmington, DE mailing address could potentially give︉ some of your clients. The prestige of having a Las Vegas, NV address may outweigh︊ whatever the difference is for your business in one of those other states. Las Vegas︋ is the new Times Square both for prestige and the quality of business done there.︌ It's also one of the few major cities that is nicer today than it was︍ 10 or 20 years ago. Something to consider.
As a German citizen the US is a reasonably good offshore choice, but both state and federal tax codes are complicated enough that you do not want︀ to do this yourself based on a few things you read on the internet. Find︁ a decent lawyer in the state you will incorporate to set everything up properly. The︂ US is one of those jurisdictions that can be great to you if you set︃ everything up right the first time and an absolute nightmare if the slightest thing is︄ wrong. If you screw up your structure they can and will nail you to the︅ wall on a technicality. As a foreigner they'll probably be more interested in ripping you︆ off than sending you to minimum security prison, but still not something you want. Delaware︇ and Wyoming are common choices to incorporate, but Nevada, Florida, Texas and South Dakota offer︈ zero corporate tax without the scummy feeling a Wilmington, DE mailing address could potentially give︉ some of your clients. The prestige of having a Las Vegas, NV address may outweigh︊ whatever the difference is for your business in one of those other states. Las Vegas︋ is the new Times Square both for prestige and the quality of business done there.︌ It's also one of the few major cities that is nicer today than it was︍ 10 or 20 years ago. Something to consider.
HK compliance is quite straightforward and easy, so not sure why it is painted here as being so complicated or expensive.
When you don't have any sales you can just file a nil value statement. When you have transactions you are required to do an audit. The auditor will cost some money depending on which firm and the number of transaction/revenue but it definitely is acceptable. Key is to find a good auditor that is also flexible and affordable.
If you don't want to pay Hong Kong tax and apply for the offshore claim it is true that the IRD will make it not easy︀ and a good auditor is required as well you shall have all proof that you︁ don't conduct any business on the territory. There is a big chance IRD will require︂ you to pay the taxes first, but if the offshore claim is accepted they will︃ refund them.
Definitely it's not easy to apply for offshore as they as they ask︄ a lot of questions! But once you have it approved they don't bother you for︅ several years and you don't have to pay tax.
I would personally not recommend anymore︆ offshore claims, as it's better to pay some amount of tax and be onshore. The︇ first 2 million hkd is taxed at 7.5% and they are very flexible putting all︈ kinds of expenses in your books.
Opening a bank account (not EMI) is very lengthy︉ and difficult, even for locals and takes several months.
Hong Kong is getting more controlled︊ by China, but I don't expect it to diminish that rapidly as a financial center,︋ as its tax rates are low and its financial structure well established. Especially if you︌ want to do business with China you better have a Hong Kong entity
When you don't have any sales you can just file a nil value statement. When you have transactions you are required to do an audit. The auditor will cost some money depending on which firm and the number of transaction/revenue but it definitely is acceptable. Key is to find a good auditor that is also flexible and affordable.
If you don't want to pay Hong Kong tax and apply for the offshore claim it is true that the IRD will make it not easy︀ and a good auditor is required as well you shall have all proof that you︁ don't conduct any business on the territory. There is a big chance IRD will require︂ you to pay the taxes first, but if the offshore claim is accepted they will︃ refund them.
Definitely it's not easy to apply for offshore as they as they ask︄ a lot of questions! But once you have it approved they don't bother you for︅ several years and you don't have to pay tax.
I would personally not recommend anymore︆ offshore claims, as it's better to pay some amount of tax and be onshore. The︇ first 2 million hkd is taxed at 7.5% and they are very flexible putting all︈ kinds of expenses in your books.
Opening a bank account (not EMI) is very lengthy︉ and difficult, even for locals and takes several months.
Hong Kong is getting more controlled︊ by China, but I don't expect it to diminish that rapidly as a financial center,︋ as its tax rates are low and its financial structure well established. Especially if you︌ want to do business with China you better have a Hong Kong entity
Oh man, you must be thinking of a different Hong Kong than I am! rof/%
If you value your time and sanity at all, you'll stay far away from Hong Kong corps.
it was fine for me for years but in the recent few years it's become an absolute, unrelenting nightmare.
If you love getting incomprehensible documents in Chinese multiple times per month, along with cryptic explanations in broken English from your service provider, along with an endless procession︀ of fees, fines, audits, and filings,some of which you have to fill out by hand︁ and mail through snail mail,then by all means go to Hong Kong.
But if you︂ want to spend your time actually growing your business and doing high value activities, stay︃ the hell away from HK.
If you value your time and sanity at all, you'll stay far away from Hong Kong corps.
it was fine for me for years but in the recent few years it's become an absolute, unrelenting nightmare.
If you love getting incomprehensible documents in Chinese multiple times per month, along with cryptic explanations in broken English from your service provider, along with an endless procession︀ of fees, fines, audits, and filings,some of which you have to fill out by hand︁ and mail through snail mail,then by all means go to Hong Kong.
But if you︂ want to spend your time actually growing your business and doing high value activities, stay︃ the hell away from HK.
It must︂ be indeed a different Hong Kong you are talking about. Having lived around there since︃ 2010 and with several Hong Kong corporations I haven't encountered anything like you describe in︄ here.
Our service providers and auditors speak perfect English, the fees are acceptable and the︅ processes are straight forward requiring little input from us. Beside some business surveys the Hong︆ Kong authorities have no requests. Just have the auditor file the annual audit reporting and︇ the agent renew the business license.
If your difficulties are related to offshore claims and︈ renewal of claims it could be another story and is not an easy process, but︉ the auditor can take care of that if you don't do any business on Hong︊ Kong territory. I wouldn't recommend nowadays an offshore claim anymore as its better to go︋ onshore tax and limit your taxes as well to create some substance.
Hong Kong taxation︌ is low and you can generously book expenses.
Without arguing about your experiences and knowing︍ the details of issues you encounter I would probably suggest to find a better agent︎ and auditor, since they should handle everything smoothly.
Our service providers and auditors speak perfect English, the fees are acceptable and the︅ processes are straight forward requiring little input from us. Beside some business surveys the Hong︆ Kong authorities have no requests. Just have the auditor file the annual audit reporting and︇ the agent renew the business license.
If your difficulties are related to offshore claims and︈ renewal of claims it could be another story and is not an easy process, but︉ the auditor can take care of that if you don't do any business on Hong︊ Kong territory. I wouldn't recommend nowadays an offshore claim anymore as its better to go︋ onshore tax and limit your taxes as well to create some substance.
Hong Kong taxation︌ is low and you can generously book expenses.
Without arguing about your experiences and knowing︍ the details of issues you encounter I would probably suggest to find a better agent︎ and auditor, since they should handle everything smoothly.
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