on July 2017
Hong Kong is perfect place to start a business. It has a great economic environment and broad support from the government, including several tax incentives and advice centers.
This does not mean, however, that you don’t need to pay private taxes. If you want to spend the money earned by your business, you have to apportion a salary or pay annual dividends to yourself. Therefore, you must pay tax on personal income, according to the laws of your country of origin.
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At the onset, you need to determine the type of business entity you wish to establish: whether a sole proprietorship, a corporation or a company.
Regardless of the entity type, the first step is to make a formal application to the Registrar of Companies. At this stage, you are required to fill out forms and pay a fee to obtain a Certificate of Business Registration. This certificate is for 1 year.
Setting up a sole-proprietorship (for the self-employed) or a partnership will require you and/or your partners to submit identification (it could be a passport or an ID card) together with the appropriate forms.
Limited companies have to register with the Companies Registry, where the necessary registration paperwork could be completed. Naturally, the processing duration for companies is significantly more than that of sole proprietorships or partnerships.
Template registration forms for all these types of business entities can be retrieved through the Hong Kong Inland Revenue Department.
Depending on the nature of your business, you may also want to check to see if you will require any special licenses or permits. The government offers license information and application assistance through its Business License Information Service.
We can help you find and buy a shelf company for a very competitive fee OR to form a company from scratch.
If you have to take a loan from a bank in Hong Kong, you may be disappointed to learn that it can be very difficult to get funding from financial institutions in Hong Kong.
Many banks will only lend against collateral property in Hong Kong itself. Therefore, you should have a backup plan if you plan on relying on local banks to finance your start-up costs.
Hong Kong has one of the lowest tax rates in the world – and the lowest in Asia. This means that there are many deductions that can benefit your business.
One of the most attractive deductions is the expenses for the future benefits of production (for example, the purchase of machinery and equipment). Often you can get a full refund of the fee for these costs.
Whether self-employed or own a large company, you probably want to use a large accounting firm to submit your tax returns. This ensures that you are able to maximize tax deductions that are available.
The Hong Kong government is very supportive of local businesses, whether new or long established. Further, Hong Kong’s access to the huge Chinese market has greatly improved since the end of the British colonial era in 1997.
A lot of information can retrieved through Invest Hong Kong, another organization sponsored by the government.
As you are developing your business plan to invest or set up a business in Hong Kong, get in touch with us. We can help you handle the intricacies involved in investing or setting up a business on Hong Kong and make your work so much easier.