Starting a Hong Kong limited company might be the fastest and most simple way to realize your entrepreneurship from scratch. But some entrepreneurs may be wondering in light of the new unexpected global situation: is it a good time for me to launch a company (in HK) now? Am I now going to postpone all of my plans?
While the business strategy may have been upset by the COVID-19 outbreak, as the adage goes, “crisis produces opportunity,” there are several reasons why HK is still a favored business center. For instance, by cutting numerous administrative fees and providing major tax breaks to ease the pressure of start-ups and SMBs, the HK government has recently managed to raise small-and-medium enterprises.
Especially when combined with that, among many places in the world, the most stress-free remote HK business registration and enforcement regime, plus instant online multi-currency accounts are well established and accessible at a very cost-effective rate for you. We can say that it is the perfect time to set up your first HK company.
Hong Kong should be on your radar if you are thinking about starting a new online or ecommerce company, especially overseas. Currently, one of the best countries to launch an online company in Hong Kong. The nation is well known for being a global business center with a technologically sophisticated infrastructure for information and technology, an extremely advantageous tax regime, and a very effective banking system.
Therefore, to reap the full advantages associated with it many investors and entrepreneurs chose to set up their companies in jurisdictions like Hong Kong. So, in Hong Kong, are you ready to start an online business? If so then one thing you need to realize if you run an online or offline or brick-and-mortar company is that you need to comply with all the country’s laws and regulations. In brief, running an online company doesn’t exempt your firm from the same restrictions faced by offline or brick and mortar businesses.
As per your business needs, you are also expected to collect appropriate business licenses, pay tax, and comply with other requirements. However, when you file your company in Hong Kong, you can reduce the sensitivity of your e-business to certain criteria substantially.
Are you still not persuaded in Hong Kong to start up an online business? If so, then here are some explanations that will surely assist you in training your mind so that when looking for a country in which to open an online company, you need not look further than Hong Kong.
100% Lower taxes for firms & individuals
The Government aims to reduce the burden of benefit tax and wage tax on taxpayers in HK, while the rate of profit tax is still very low at 8.25% on assessable income up to $2,000,000. An overall HK$20,000 tax reduction is provided for the assessment year 2019/20 (covering from 1 Apr 2019 to 31 Mar 2020) for each case of Benefits Tax, Wage Tax, and Personal Assessment Tax.
E.g., two sets of tax deductions will be obtained by an HK corporation and its single director, since the profits of the company and the director come into two tax cases, which are the company’s benefits tax and the individual’s compensation tax. Every tax reduction case has a limit of HK$20,000.
Easy Company Formation
The first and foremost justification for setting up your online company in Hong Kong’s freest economy is the integration process of your business. In Hong Kong, the process of integrating or registering your company is simple and clear. As soon as you finish choosing the name of your company, all you need to do is upload an online application to the Register of Companies.
You don’t have to wait many days after that you can open your business easily in Hong Kong in around two weeks. More specifically, with the help of specialists who are experts in opening an offshore company in Hong Kong when sitting in your hometown, you can even open your online firm.
Within one day they will get your application checked and get the incorporation certificate given to you directly after being accepted. In brief, to start an online business in Hong Kong and to have the company documents ready in your hand for a week.
‘0’ Company’s Annual 2 Year Return Fees
The annual return charge is another administrative payment related to the renewal of the HK Limited Company’s Certificate of Incorporation. Companies must file an Annual Return and pay the charge next year on their anniversary date. For two straight fiscal years, which initially cost HK$105/year, the government is now waiving this payment.
Advanced Information and Technology Infrastructure
To reach a stable and profound technology, the first and foremost advantage of opening an online company is to get an excellent chance. Secure servers, data centers, and other parts of internet infrastructure function as an essential tool to operate an online company effectively. And you can find every tool in Hong Kong to set up and expand your online business without any difficulty.
‘0’ Fees for Company Registration
The Business Registration Fee is an annual fee charged by a business enterprise operating in HK upon acquiring a legitimate Business Registration Certificate (B.R.) Usually, for each permit, the annual expense is HK$2,000/year. The Government lowers this charge to ‘0’ within 1 Apr 2020 and 31 Mar 2021 which is applied to each incorporated and independent organization.
Excellent Reputation with Stable Jurisdiction
To start-up and scale up their company in a dynamic business environment, any business owner needs secure authority. Therefore, it is not shocking to conclude that corporations incorporated in countries that do not have stable democratic jurisdictions are unable to deal with competition. Unstable jurisdictions often block or restrict access to the internet, which affects the success of online companies. That’s why countries like this usually don’t have high foreign direct investment rates.
However, you do not have to think about the jurisdictions when you plan to set up your ecommerce business in Hong Kong. There is an outstanding reputation for good government in Hong Kong. You are unable to meet bureaucratic or dishonest government officials when running the organization. Nice credibility, yes, because of its secure authority. In the Asia-Pacific region, Hong Kong is rapidly becoming a favored destination for multinational corporations seeking to set up regional headquarters.
White-Listed Country
The White List shall take into account the countries whose governments have adopted the universally accepted tax norm. In short, they are not intended to be a tax haven for the OECD (Organization for Economic Co-operation and Development’s).
There is no denying the fact that a vast number of multinational institutions and influential policymakers are intrigued by certain countries with low-interest rates to integrate their companies. While in separate countries the secrecy jurisdiction or tax havens are legitimate, they somehow allow businesses and individuals who have dubiously-acquired resources to securely conceal their properties from their home governments’ reach. However, it may allow you to mitigate tax liabilities by registering your business enterprises in such a form of jurisdiction.
So, you have to be glad to note that Hong Kong is in the white list band, which means that its tax practices conform with foreign tax regulations, so it is not considered to be a tax haven. The firms that are incorporated in Hong Kong are usually known to be foreign business vehicles such that no one can look suspiciously at the essence of your activities.
Conclusion
Now that you have a plethora of reasons to integrate and reap the full advantages associated with your online company in Hong Kong. If you’re able to form an offshore corporation for tax avoidance purposes only, or you want to tap into the huge Chinese industry, Hong Kong is the best prospect for you. So, are you ready to register in Hong Kong for your online business?
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