Starting a small business in Hong Kong is a challenging task. It is no wonder why a lot of entrepreneurs fail to achieve success in this endeavour. However, with the proper guidelines and tips, it is not impossible to succeed in business. The following are just some of the benefits of company formation in Hong Kong for new entrepreneurs.
Tax benefits. Starting a small business in Hong Kong is a better situation than paying sales tax and service tax to the government on behalf of your business. By forming a company in Hong Kong, you will not be required to pay these taxes. It is beneficial for business owners who are ex-pats or those who have moved their business out of the country. Besides, Hong Kong tax laws are more lenient, and business owners do not have to worry about paying hefty amounts.
Company Formation. Before you can set up your company in Hong Kong, you will first need to register your business. There are a lot of companies that offer registration services in this regard. You can choose among these depending on the type of business you want to set up.
You are getting a Business License. Getting a business license is one of the most important benefits of starting a small business in Hong Kong. It will require you to submit several documents to the government, including your company’s letter of intent and its Articles of Association. Besides these two documents, you will also be required to submit three years of the income statement and the annual accounts. If you have a permanent address in Hong Kong, you will also be required to submit a copy of your passport.
You were getting a Registered Office. Once you are finished submitting the necessary documents, you will be required to submit your business name and address. After getting these two documents, you will then have to submit your application for a registered office. The registered office will be where all the essential records for your business will be kept like your business license, tax registration papers, and your rules and regulations manual. Another benefit of having a registered office is that you will receive all notifications from government agencies. You may also be able to apply for government funding for your business.
You are obtaining Tax Registration. Most governments in Hong Kong require business owners to get a tax registration number (TRN). It is usually done by submitting your business plan to the local government. After receiving the TRN, you will be able to prepare your income tax return. You also must pay the applicable tax according to the law.
They are applying for a Bank Account. Most business owners can open an account at their local banks. They can also obtain an offshore bank account, which can be beneficial in transactions not based in mainland China.
These are just some of the basic things you need to know if you want to start a small business in Hong Kong. Keep in mind that there are other legal requirements and procedures that you need to comply with it. Please consult a lawyer once you get started with your business so that they will be able to assist you in making the necessary documents and filings.
Another essential document is the Business Operating Manual or the BOM. It serves as the leading guide to your business. You will also need to register a company with the Monetary Department of the Hong Kong government. It would help if you got this completed and approved before anything else. Your papers must be carried out in a prudent and orderly manner so that you will not be charged for any mistakes.
You may also be required to submit annual reports to the MCL. It will give details of your business operations, and it will also include your progress report for the previous year. It is a perfect way of monitoring your business as it will show you the problems you have encountered and the steps you have taken to correct them. It is also the right way of motivating your employees.
When starting up a business in Hong Kong, you also get a business license. It will ensure that you are not breaking any local rules when it comes to operating your business. You will also be required to provide a registered receipt for all your sales and purchases. It will serve as proof that the transaction took place. You should also get a letter from the local customs department if you plan on importing any products from other countries.