[Based on Client’s Life Experience]

When it comes to arranging accounts & audit works for your business, many people may procrastinate. If entrepreneurs (especially expats) didn’t have any preparation beforehand and suddenly received their first Profits Tax Return from the HK Inland Revenue Department (IRD), they might panick for having 3 months only to finish all financial work, here’s a case sharing from our client that you might be interested to hear. 

Willis (alias), a smart start-up founder coming from Australia who is astute in nurturing his fast-growing online tech business, but he has zero concept of local accounts and tax system, and didn’t pay much attention to how to consolidate his corporate financial records in a neat and proper way. 

One night he was at a pub during happy hour with his buddies who are all start-up newbies. They chatted and suddenly Willis recalled he had received a green letter from the IRD that afternoon and his friends reminded him that should be his very first Profits Tax Return, for he had formed his business in HK for nearly 1.5 years already.

What to Prepare?

Since that time he had no clue at all on how or what to prepare for this tax filing, he then actively sought help from his peers, but things were not that straightforward. He knew he should start with getting all accounting records ready with his sales invoices, expense bills, receipts, shipping documents, all bank statements, etc., even it's already a year behind. At first, he thought it should be quite easy as there are so many accounting report templates online - would not be that hard to find suitable ones to fit in his bookkeeping entries. Then, along the preparation process, his questions popped up one after another.

For instance, he thought his first prepared accounting records were quite good already, or at least this draft had a good direction to base on and follow (for which he really spent some time to figure out what entry should be put and how to put). But he realised there were so many more of his business entries in different categories he needed to add further, and some of them were quite vague to define whether it is cost or expense, and he knew if he put the entry wrong, the impact on his tax computation figures could be quite large.

How to Be Well Prepared?

Worse still, when he came to us later and showed us his accounts records, our in-house accounting team pointed out what he had prepared was far from the standard. Because the auditor can’t really process the auditing procedure from those self-prepared records submitted by him, since it is a requisite for them to receive the full set of accounting records including Profit & Loss Accounts, Balance Sheet, General Ledger, Trial Balance, etc. for assessment and preparation of audit reports in the legitimate and proper format. Plus he might need to carry out a stock take as well for his tech device inventories. 

At that moment he noticed an experienced local accounting advisor is the only option who could guide him through the tedious obligation, especially the first-year accounts. As a start-upper who has been doing business for just about a year, everything is so new and he rather put more of his resources in developing his business, instead of consolidating the accounting entries for which a professional could do way better than him. And he found out when the accounting records and audit report structure are well built, it will become an important foundation for him to execute his tax efficiency plan in the financial reports when his firm starts to make good profits at a later stage. Not to mention he will be reminded of his HK tax filing dates by the agency and he can be hands-off with these trivial issues, he was more than happy to pay us a few thousand dollars to get things done.

What Is the Role of a Professional?

Reminding our clients to meet their tax reporting deadlines is one of our jobs, and in fact, we can do much more than that. Typically we will suggest our clients appoint the same proficient firm for handling all accounts & audit works, as well as the tax compliance part. Not only will this help improve the consistency and tidiness of the reports, but also let the advisor provide possible solutions on tax computation and optimisation, given that the advisor has already gone through your financial statements and known well of your accounting & audit report structure (e.g. with different handling treatment for a company generating profits in HK, China or offshore places). 

Tax filing is inevitable for every entrepreneur - there could be a chunk of documents you have to deal with at the last minute if you didn’t plan ahead and things could end up being a disaster. On the contrary, as a wise businessman, you should always start as early as possible to fit the local compliance requirements. Even if your invoices and expense bills are kind of messy, we will give you precise advice and teach you how to prepare the full set of documents based on our provided checklist. For offshore business owners, we will assist you in communicating with the IRD for submitting your ‘offshore claims’ if we found your firm is eligible to apply, details please refer here. You can always come back to us and ask for our on-site accountant’s advice on your accounts or tax queries.

This first step in dealing with the accounting work of your business - could be troublesome, but could also be easy-breezy, depending on which path you opt for. Unquestionably when you have found a reliable yet cost-effective firm familiar with local compliance to handle all your duties, you can put more resources and time into focusing on your business development and growth. Any questions on how to kickstart your own accounting work, please feel free to email us at info@bridges.hk and our on-site accounting and tax compliance team, providing advice not just coming from factual knowledge but also years of experience in this field, will address your queries straightway and walk you through the whole preparation and submission timeline.

Trademark is important. Even the Romans used a ™ for their swords thousands of years ago.

Getting a trademark for your business is definitely a smart move because the business name or appearance of your product is a valuable asset. Let us explain what a trademark can do for your company and the tips of the trademark application in HK. Ready to safeguard your names / products that could be the swords of your company?
 

What Can Trademark Do for You?

Trademark, the mark “™” is usually used for distinguishing products and services of a particular company / an individual owner from those of others in the market.

Yet, bear in mind that the HK Companies Registry and HK Trade Marks Registry are 2 different authorities. Some of our clients get confused with these two departments, but having the company registered does not mean it would automatically register for your trademark or you will be entitled to any trademark rights.

In other words, if you would like to enjoy the exclusive right to use your company’s name or logo, it is inevitable to get a trademark, by which you can use it in relation to the products / services / inventions of yours and it will save you a lot of hassles when your products or services provision get more popular in time. In fact, some clients might come late (they just ignored this part from the start and suddenly remembered after a couple of years of the incorporation), then found out their business / product name has already been taken by others in their preferred category (i.e. a class of trademark, like machine tools; cooking; telecommunications; etc.) and so they couldn’t register in that category now. Because some businesses may have ignored the importance of trademark and eventually suffered from the plagiarising behaviour at the end, realising they should have taken this step earlier. 

Talking about the exclusive trademark right, many people mix up “™” and  “®”. Generally, the “™” symbol can be used whether the trademark is registered or not.  But the “®” symbol means this trademark is a registered one, and you are entitled to the exclusive trademark right provided by the Trade Marks Registry. In other words, by obtaining this right, your company can then apply the “®” symbol next to your company’s name or logo as an identification. You can take legal actions against any parties that violate the trademark law, such as using your trademark without your consent / agreement, to prevent anyone to take your trademark’s benefits (could be company name, products, inventions, ideas, etc).

Be the First-Mover in Your Market

Moreover, having a trademark can also be a first-mover advantage for your company, you can easily dominate the market if you have a newly-invented product or service. Any newcomers would then be hard to get an identical trademark anytime soon. In essence, it gives you a chance to become the market leader if you act quickly with the trademark registration.

According to our years of experience, if a HK company owns a registered trademark, it will be a lot easier to cooperate with her mainland China partners because those Chinese companies tend to believe you are a reputable company and they are willing to pay extra for your products / services, which makes the whole trademark registration very worthwhile.

Easy-to-Prepare Materials for Registration

Before kicking off the registration, you just have to provide :

• The trademark you would like to register graphically
   
• What products / services will be covered by this trademark? (i.e. baby foods, hygienic and beauty care, etc.)
   
• Would you like an official search / non-official search first? (to ensure your trademark is available for registration)
   
• Information of the trademark’s owner

5 Steps for HK Trademark Registration

Trademark registration sounds complicated yet it is not as hard as you thought. Our experienced advisor will guide you step by step throughout the whole process, whether you are a local or overseas firm. Here we’ll give you some ideas :

1. File the Application

Gather all necessary information of your product / creations / services and we will assist you in submitting the application. In general, the application procedure can take as little as 6 months.

2. Deficiencies Checking

The Trade Marks Registry will conduct a thorough check on the application and provided documents. The authority will get in touch with us if further information is required.

3. Search and Examination

The Trade Marks Registry will then perform a proper search to see if any identical or similar trademark has already been registered. The authority will also review and see if the submitted trademark is proper and fits the Trademark Ordinance’s requirements.

4. Objections (possible to occur)

If the requirements are not met, the Trade Marks Registry has the authority to object to the application. Yet, applicants are granted 6 months for amendments in order to meet the requirements.

5. Registration

Once your trademark has been accepted for registration, it will be published in the Hong Kong Intellectual Property Journal. If no opposition by a 3rd party is made, the Trade Marks Registry will enter your trademark into the trademarks register and you will be issued with a certificate of registration, meanwhile, the notice of the registration will be published in the Journal too. As the owner of a registered trademark, your rights take effect from the filing date of the application, which allows you to use it for 10 years.

How to Make Your Trademark Stand Out?

- Be creative, emphasise the uniqueness of your trademark, for instance, in the food industry, using “MEAT FOOD” instead of “MEET FOOD” might be objected by the Trade Marks Registry since the chance of getting a similar trademark is massive.

- No description of the products in terms of quantity or quality like “100 Chicken Wings” or “Quality Chicken Wings”.

- No geographical name like “Milano Fashion”.

- Use your invented product name would be the best since as it would most likely be innovative.

If you are not sure whether you are having a trademark idea similar to others, shoot us an email at info@bridges.hk or call +852 2159 9666. Our on-site Trademark Team will help ease the application process and smoothen your journey.