Hong Kong Companies’ Assistance to Foreign Trade Hong Kong companies do not need to employ staff in the office space in the process of engaging in foreign trade business, which is very helpful for the initial start-up of foreign trade. At the same time, Hong Kong companies’ help in foreign trade business is also reflected in the following aspects:
1. Hong Kong companies tax returns Hong Kong companies generally file tax returns for the first time 18 months after their establishment and once a year. There are fewer taxes and the tax rate is low. The main tax category is profits tax (16.5%). Companies apply the principle of taxation from regional sources, that is, profits are no longer generated in Hong Kong and profits come from overseas. They can apply for exemption from profits tax, which can achieve the effect of tax relief for foreign trade enterprises.
2. Hong Kong’s entrepot trade The main purpose of Hong Kong companies’ assistance to foreign trade is to reduce the tax cost of the companies through entrepot trade and accelerate the accumulation of enterprise capital.
This is mainly to use the principle of tax collection from the source of Hong Kong companies, to conduct entrepot trade through Hong Kong companies, and to intercept overseas profits in HongKong accounts, so as to greatly reduce the tax cost of enterprises in the transaction process and further achieve the purpose of improving the income of enterprises.
It is these factors that lead mainland enterprises to do foreign trade in the mainland but register their companies in Hong Kong. In fact, Hong Kong companies are not only helpful in the above aspects, but also widely used in the fields of building international brands, listing overseas immigrants, international investment, return investment and so on, helping some foreign trade soho registered Hong Kong companies to do Alibaba International Station, which is praised by the industry as a powerful springboard for enterprises to enter the world and the international market.
Advantages of Hong Kong Companies over Mainland Companies Domestic companies are certainly familiar to everyone. We can find the advantages of Hong Kong companies by comparing Hong Kong companies with mainland companies.
1. Company funds The registered capital of a Hong Kong company does not need to be verified. The minimum amount is 10,000 Hong Kong dollars. It only represents the economic responsibility of shareholders. However, the registered capital of mainland foreign trade companies needs to be verified in place. If you want to register a company with import and export rights, then 1 million registered capital is a very high requirement.
2. Office space for Hong Kong companies After registration, Hong Kong companies may not work in Hong Kong on the spot and do not need to rent office space. Mainland companies, on the other hand, must have offices in commercial buildings, especially import and export companies, which the government has to inspect several times a year. Rent is another big problem.
3. Hong Kong companies employ employees After the Hong Kong company is registered, because you do not have to work in Hong Kong on the spot, of course you can also not employ employees, even if it is SOHO home office, you can directly use Hong Kong company to receive orders and collect money. The employment problem of mainland companies after renting OFFICE is a very important cost.
4. Hong Kong company accounts Hong Kong companies belong to overseas companies, so the accounts opened are overseas accounts, which are not subject to mainland foreign exchange control. They can freely manage the inflow and outflow of funds and receive payment from overseas guests. Foreign currency in the accounts can be transferred to domestic and overseas enterprises and individual accounts at will. The biggest difference between the accounts of mainland companies is that they cannot directly accept foreign currencies and can open OSA accounts with banks. However, OSA accounts are still subject to bank supervision in China, which has certain restrictions on foreign currencies and is inconvenient to operate.
There are many foreign trade entrepreneurs who are short of funds at the beginning, have high costs of registering mainland companies, and are not as practical as Hong Kong companies. If you want to make a sudden appearance in the foreign trade (including cross-border e-commerce), you might as well consider registering a Hong Kong company and taking Hong Kong as a stronghold to fight in the world.
Original Artical，Author：China Trade Agent，if repost，please give references ：https://offers-bg.com/hong-kong-companies/