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Economic substance in HK?

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manukahoney

New member
Hi guys!
A question regarding an economic substance in HK - does anyone know a reliable service provider that doesn't charge arm and leg? No office required, only couple of part time employees.
 

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
Hi guys!
A question regarding an economic substance in HK - does anyone know a reliable service provider that doesn't charge arm and leg? No office required, only couple of part time employees.
Keep in mind that as soon as you have substance in HK you are liable for tax.

Back in the days before all the political uncertainty - Bridges was a good provider.
 

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
Isn't it a bit more complex? Like where the company is managed, is there any local trade, shareholders and directors whereabouts?
Nowadays it's like the local HK banks force you to so much substance in HK that you are tax liable in HK if you want a real HK bank account.

Till last year Singapore Bank account for HK company was some workaround. Changed this year and it's now close to impossible as well.

That's why nearly all new HK companies bank with Neat only.
 

manukahoney

New member
Yes, now I get you.
It's tricky, however I've got a LO that having only few local linear employees wan't be enough to classify as local company, but might be just enough to pass a kyc from non-hk banks.
 

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
Yes, now I get you.
It's tricky, however I've got a LO that having only few local linear employees wan't be enough to classify as local company, but might be just enough to pass a kyc from non-hk banks.
You can try with CIM Bank Switzerland.
 

fshore

Entrepreneur
Yes, now I get you.
It's tricky, however I've got a LO that having only few local linear employees wan't be enough to classify as local company, but might be just enough to pass a kyc from non-hk banks.
Do you mean that IRD approved your offshore tax status when you had local employees? That seems unusual. Generally in HK you are taxable if you have goods going through HK or any employees in HK or directors meetings in HK.
 

Admin

Forum Moderator
Staff member
Yes, now I get you.
It's tricky, however I've got a LO that having only few local linear employees wan't be enough to classify as local company, but might be just enough to pass a kyc from non-hk banks.
It sounds a bit contradictory I must say, but in what country can the authorities not be contradictory.
 

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
It sounds a bit contradictory I must say, but in what country can the authorities not be contradictory.
It is.

That's why HK as a offshore jurisdiction is since latest 2020 dead.

You can have a conversation with CIM Bank and try to work something out that grants you banking without getting taxed in HK.

That's the only option I have in mind when it comes to banking for a HK company without any tax liability in 2021.
 

GiGoGo

I make things happen
Silver Member
The offshore exception is not automatic in HK, your accountant needs to justify no decisions are made in HK in the first company audit. Then after some time you got the exception certificate.

Yes, you need to pay tax, but it's just 8.25% under 2m HKD profit and you can deduct almost anything you want.
 

GiGoGo

I make things happen
Silver Member

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
I wonder if you can have a HK bank account with Transferwise of other EMI's
TW doesn't work with HK companies since forever.

You can try with Paysera. In our experience the best TW replacement for EUR SEPA/SWIFT transfers.
 
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