5 Reasons NOT to form a Company in Hong Kong
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- เผยแพร่เมื่อ 28 มิ.ย. 2024
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Today we are going to discuss 5 reasons NOT to form a company in Hong Kong.
⚠️Don't get discouraged! There are plenty of good reasons to open a company in Hong Kong, however today we are discussing five things that you should be aware of. ⚠️
The number one reason you might not want to form a company in this jurisdiction is banking. Banking for Hong Kong companies got quite difficult in the last few years, especially if you have a new company. You can still open an account, but high-quality banks will not be an easy option for you.
The second reason is the annual audited financial statements. This can be a hassle for you, and also increases your costs.
Reason number three is that Hong Kong is certainly not a cheap place to open a company and to operate from. In this day and age, it is very important to have substance, which basically means having an office and local employees that will do real work for you. The real estate market in Hong Kong is among the most expensive in the entire world! Wages are not going to be cheap either. So having substance in this place will definitely not be the best bang for your buck.
The next reason is believe it or not TAXES. Most people believe that Hong Kong is a zero-tax jurisdiction. This is not true! Hong Kong has a territorial tax system, which to put in simple words means that they will tax you if your operations take place in the country. It means that in order to get zero tax you will have to prove that your business operations are taking place outside of Hong Kong. This might take some time.
The last reason why you might not want to open a company in Hong Kong has to do with its Financial infrastructure. You generally don't get VISA cards in Hong Kong, they opt for China Union Pay, which is not as broadly accepted. Also, you will have to deal with Hong Kong Dollars, which means that you will be dealing with currency conversion all the time! Another thing that's very inconvenient is payment processing! Their rates for Hong Kong companies are quite high, and you won't get as many options as you would in the US, for example.
Timeline:
00:00 - Intro
1:54 - Banking
3:20 - Annual audited financial statements
4:25 - High Costs
5:27 - Taxes
7:28 - Financial Infrastructure
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Just found you and your channel. Finally, someone with actionable specific information, not just the usual general blah blah.
Thanks! Any topics you'd like to see?
@@MichaelRosmer Without having first searched your vids? Yes. Absolutely. What general advice can you give to someone starting an location-independent online business (e.g. consulting, digital products, etc) with US citizenship with easiest setup, minimum costs, and overall best tax treatment and easy banking, with a minimum of government intrusion, reporting and regulation? The venue does not necessarily have to be where the online entrepreneur lives. In other words, if a young man is starting up a biz with a blank slate, no travel restrictions, and, say $10K in his pocket seed money, what would you do?
@@unknownquantity4440 thanks I'll see what I can create. You can check out some videos we've done previously for Americans
Interesting. Hong Kong is one of the most famous offshore places. From what I've heard many people like to form companies there. I'm looking forward to see your video that talks about advantages of Hong Kong :)
Keep up with good work! I'm happy to have one video every day from you guys. 😄
Will do yeah there's definite pluses
he downplays HK because he wants you to get his services.... HK its great for most cases when you dont do business in HK. And lets be serious...most of us dont do business there
People who know how to form companies, get bank accounts can do things in Hong Kong easily. It just requires the right people.
Hello good you have channel in hongkong...
I live in Australia, i need to pay 25% corporate business tax
& 10% gst.
have you heard of cases where IRD (HK) will still require you to present a tax paid overseas even though you are qualified for offshore exemption.
I haven't seen seen cases in any of the people we've been working with no and in theory that shouldn't be an issue because it's not based on whether you were taxable elsewhere.
@@MichaelRosmer thanks MIchael!
Five more reasons to high five this man!
Haha! What topics would you like to hear about?
I opened a HK company a couple of years ago and couldn’t open a company bank account no matter what information I gave them. Basically, in the end, one of the banks admitted that due to the FATCA they don’t have the “business appetite” for opening accounts for companies that don’t have a throughput of at least $5 million USD. My company wasn’t going to generate more than $1 million and most of our business was offshore. I even established a serviced/virtual office there and hired a part time staff member, all to no avail, so we closed the company.
You need to know the right people. Are you looking for someone?
@@harisadu8998 not anymore. We opened a company in Dubai instead.
@@tlevans62 Dubai is very easy and rules can be a bit murky but you can get away with a lot. They just introduced corporate tax so you need to see whether your income is exempted.
But as long as its working for you without problems. Can't go wrong with Dubai.
But if you need help with HK, there are people for that.
@@harisadu8998 thanks. Good to know. We've run companies in the UAE before, but we actually wanted one in HK. Just didn't work out.
@@tlevans62 If you are American, it may be the case that people want to avoid you.
HK its great for most cases when you dont do business in HK. And lets be serious...most of us dont do business there
Singapore is a far better option for incorporating a company. Hong Kong is no longer the financial hub of Asia.
What do you think makes Singapore a better option?
Hong Kong is a lot easier than Singapore. No idea what you're talking about. Hong Kong's main problem is geopolitical risk. But easier than Singapore anyway.
i dont know what you are talking about? SG its a lot more expensive and you need to pay a director there... that is NOT cheap!
The reason banking got so difficult in HK was because of the paid rioters in 2018-2019. A lot of shady accounts were opened and money was flowing into the rioters pockets.
As for the tax, the % seems high, but there no dividend taxes, and tons of stuff you can write off. Dry cleaning, domestic helpers, meals at restaurants with family, supermarket groceries, the home you're renting, home internet and utilities, kids education and after school activities, health insurance and costs, medical bills, dental....and many more. So to write off USD 300k is really not that hard
exactly! Compared to UK where i lived before its a dream in HK to add expenses and lower taxes on top of that