Estimate time to read: 6 min
July 07, 2021
Working with Amazon through a Hong
Hong Kong has been an outstanding preference for launching an e-commerce company as the record holder of the world’s freest economy for the last two decades. Not only is Hong Kong an enticing location for developers who want to set up a conventional business, but it is also the best choice for e-commerce enterprises.
E-commerce is a growing area that enables investors to interact from all over the globe. It also presents you with different ways to expand to a wider audience, in a manner that was once difficult for firms without major financial and marketing opportunities.
Entrepreneurs eager to start an e-commerce venture in Hong Kong will benefit from the tax incentives of the region and its continuing evolution as a leading hub for internet entrepreneurship in different ways. More significantly, because of the lighter initial costs, launching an online company in Hong Kong is more affordable than starting up a conventional business.
We’re going to dive today into why Hong Kong is such a perfect place for your Amazon company to be centered.
Table of Contents
Why Hong Kong?
Hong Kong is constantly ranked among the best countries in which to start a business. According to the Doing Business rankings of the World Bank, Hong Kong ranked as the 5th best country for doing business and the top 3rd country for the ease of starting a business. Procedures, time, expense, and minimum funding to launch a new company are considerations known as to how easy it is to start a business.
Hong Kong’s corporate tax rate is 16.5 percent, which is still low on the global index. On top of that, you can get a 0 percent exemption on the earnings you make outside of Hong Kong if you can show you’re an offshore company.
Oh, if you’re selling in the Amazon USA, then Hong Kong isn’t right? Enjoy this tax overseas when being in a great jurisdiction like Hong Kong as well. You will enjoy legal rights and the reputation of the business in this manner. Best in the worlds of both.
Equivalent to Amazon Seller based in the USA
They don’t make the sellers look any different whether you’re selling on the Amazon USA website, based or not based in America. So, since you are not licensed with the US, you don’t have to think about your sales and promotion being at a disadvantage at all. Many people do not realize this and feel that they need to be American or that they need a business headquartered in the United States to sell on Amazon USA.
Also, there are two options to receive payments from Amazon in Hong Kong:
1. It can directly go to your bank account. But in this scenario, Amazon charges you 2% of the handling fee and an additional 2% exchange loss.
2. Getting payment first to your corporate Payoneer account and after sent the payment to your Hong Kong bank account. But also, in this case, Payoneer charges you 1% which is negotiable to 0.5% if the sales amount is large.
It is Easy to Buy from Chinese Factories
For their import and export business, Hong Kong is where everybody sets up their business. Except for the complexities and headaches that you will receive in the PRC, it is right next door to Mainland China.
So, your Chinese factories, many of them, will still have an HK business and a bank account in Hong Kong, most likely HSBC HK. You can pay them directly, with no penalties, and at the same time, they can collect the funds.
You execute doing a standard inspection and then whip out your online banking for HSBC Hong Kong. Show them that you have transferred the funding (spin the laptop around and show the screen). You will also have an on-the-spot reference number. In the same second, they will search. They check the funds obtained and authorize the container ship to leave the dock of the warehouse.
It will take at least 24 hours or so, with much higher rates, if you do this from an overseas bank. Do you order from many manufacturers and often do a lot of factory transactions? By getting an HSBC HK bank account, you can save a lot of time, fees, and headaches.
Benefits of USD Accounts and Multi-Currency Accounts
Here’s another fantastic advantage: multi-currency bank accounts. A ton of persons. The volatility of the Australian dollar currency is crippling the shareholders of Australian businesses. To get a multi-currency account, they do not have a preference. (Not sure if that’s valid for all Australians, there must be some multi-currency banking somewhere in the country, right?) Because when Amazon USA gives them their sales money, they are being ruined.
If you register in Hong Kong and have both a bank account, you will earn a US Dollar payout. This means no more currency risk because when they are good and ready, they can convert to any currency they so choose. You may be willing to pay the Chinese Yuan at your Chinese plant, or retain it in USD, too.
We are free to do business anywhere in today’s world and Hong Kong helps us to choose the currencies in which we keep our currency. Those should be the norm everywhere. But Hong Kong is a safe spot to establish before that day!
Quick and easy Legal Procedures
It is also better to work with them like purchasing from Chinese factories. As they would have an HK corporation, it is easier to adjudicate a contract such as a purchase contract, NDA, or even an invoice if all firms are based in one country!
And even though the factory is set up only in Mainland China, HK and CN have a special friendship and understanding. It’s just getting closer, and the industry is going to respect you more. Plus, in this part of the world, they will see that you are more serious and dedicated to Asia, China, and industry in the long term.
As most consumers are only using the market system of their homeworld, you will stand out from the rest! Take this extra time to do it right, and plant owners will take the company more seriously!
Is it Possible to Sell on Amazon USA with a Hong Kong company?
It’s possible, indeed. You register with your Hong Kong company registration card for your Amazon vendor account. You’re going to be asked a million and one times whether you’re American or not. To do this, lawfully, you ought to be a non-American. But this is a perfect way for these non-U.S. people to connect your Amazon USA sales to your Hong Kong business.
You will then transfer money to your Payoneer or World First account from Amazon and then immediately collect the funds from your Hong Kong bank. You will then directly wire money into your Chinese factory with the funds in Hong Kong. They also have a bank account in Hong Kong, such as HSBC, but there are no costs and the payment occurs within seconds.
Relationship with Banks
These days, we all stress about banks accepting our accounts and holding them in good standing. If you’re selling on Amazon USA, don’t worry about the banks censoring you as a highrisk enterprise. Banks in Hong Kong know this is a hot commodity because it is!
For your Amazon sales history, come to your bank account interview and application day. Show them the amount you’ve generated and the profits you have. Display the screenshots of the listings of goods and that you have a brand of your own.
The best place for you to set up your multinational Amazon company in Hong Kong.
It makes sense to do this here, to import from China, to sell in the United States. This is the trading company of the past, revived only now for the present scenario of technology.
So, are you ready to start your Amazon FBA Business?
What are you thinking, do you already have a business setup? A lot of investors have started selling from their accounts on Amazon and it is becoming bigger and stronger. Take the big move to implement it. It’ll feel a lot better and it’ll feel Genuine.
Or do you already have a company set-up for this Amazon business in your home country? It’s a little hassle to restructure, however, you will get around it. Start the HK business and, step by step, re-work all about Hong Kong. The purchases from Amazon, the orders from the retailer, a new PayPal HK account.