Our valued sponsor

eCommerce + Hong Kong Setup

That make them useless for HK companies!
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.
 
  • Like
Reactions: MiltonStone
What about HK + Need does anyone tried that or Stratsy who used to advertise here back in time?
 
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 prove otherwise. It's not like a Freezone company in the Middle East or IBC in other jurisdictions where incorporating the right way equals zero tax for life. While simply paying the tax for a year or two may be cheaper than all of the compliance hoops you have to go through to get out of it, you run the risk of getting hit extra hard when trying to claim you don't owe tax later. In addition to proving you don't owe tax now they may demand that you prove how your operation is materially different from when you paid the taxes you technically didn't owe. You'll beat it, eventually, but all of this is a further time and money suck. Every year there are more fees and compliance hoops (auditing of all accounts is both a hassle and surprisingly high expense relative to the value provided rarely mentioned by people that have never owned a HK company) that must be completed perfectly, even if you will never actually owe tax. The red tape has been strongly moving in the wrong direction for the last 7-10 years and shows no signs of easing up when everyone eligible to run for public office is hand-picked by the CCP. In the current year Singapore offers everything you would like about Hong Kong with fewer headaches and no risk of 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 want to do this yourself based on a few things you read on the internet. Find a decent lawyer in the state you will incorporate to set everything up properly. The US is one of those jurisdictions that can be great to you if you set everything up right the first time and an absolute nightmare if the slightest thing is wrong. If you screw up your structure they can and will nail you to the wall on a technicality. As a foreigner they'll probably be more interested in ripping you off than sending you to minimum security prison, but still not something you want. Delaware and Wyoming are common choices to incorporate, but Nevada, Florida, Texas and South Dakota offer zero corporate tax without the scummy feeling a Wilmington, DE mailing address could potentially give some of your clients. The prestige of having a Las Vegas, NV address may outweigh whatever the difference is for your business in one of those other states. Las Vegas 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 was 10 or 20 years ago. Something to consider.
 
  • Like
Reactions: drpreobrazhensky
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 easy and a good auditor is required as well you shall have all proof that you don't conduct any business on the territory. There is a big chance IRD will require you to pay the taxes first, but if the offshore claim is accepted they will refund them.

Definitely it's not easy to apply for offshore as they as they ask a lot of questions! But once you have it approved they don't bother you for several years and you don't have to pay tax.

I would personally not recommend anymore offshore claims, as it's better to pay some amount of tax and be onshore. The first 2 million hkd is taxed at 7.5% and they are very flexible putting all kinds of expenses in your books.

Opening a bank account (not EMI) is very lengthy and difficult, even for locals and takes several months.

Hong Kong is getting more controlled 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 you want to do business with China you better have a Hong Kong entity
 
HK compliance is quite straightforward and easy, so not sure why it is painted here as being so complicated or expensive.

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 procession of fees, fines, audits, and filings—some of which you have to fill out by hand and mail through snail mail—then by all means go to Hong Kong.

But if you want to spend your time actually growing your business and doing high value activities, stay the hell away from HK.
 
  • Like
Reactions: KalasZX
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 procession of fees, fines, audits, and filings—some of which you have to fill out by hand and mail through snail mail—then by all means go to Hong Kong.

But if you want to spend your time actually growing your business and doing high value activities, stay the hell away from HK.
It must be indeed a different Hong Kong you are talking about. Having lived around there since 2010 and with several Hong Kong corporations I haven't encountered anything like you describe in here.

Our service providers and auditors speak perfect English, the fees are acceptable and the processes are straight forward requiring little input from us. Beside some business surveys the Hong Kong authorities have no requests. Just have the auditor file the annual audit reporting and the agent renew the business license.

If your difficulties are related to offshore claims and renewal of claims it could be another story and is not an easy process, but the auditor can take care of that if you don't do any business on Hong Kong territory. I wouldn't recommend nowadays an offshore claim anymore as its better to go onshore tax and limit your taxes as well to create some substance.

Hong Kong taxation is low and you can generously book expenses.

Without arguing about your experiences and knowing the details of issues you encounter I would probably suggest to find a better agent and auditor, since they should handle everything smoothly.
 
  • Like
Reactions: drpreobrazhensky

Latest Threads