Before our clients start their business in HK, they always come to us with a question: “Whether it’d be better for me to set up a HK company OR other offshore company like Seychelles, BVI, Marshall Islands, Cayman Islands, etc.?” That’s right, here we will give you some important clues to examine which type of entity is the right fit for you.
 

 

In fact, there could be plenty of obscure elements that people might easily neglect - it is not only about which type of company you are going to form but also what kind of business activities your firm will involve, where will these activities host, where will your profits generate from and do you need a HK bank account, etc. Let us show you an interesting case study for you to dig deeper ::

 

[Based on Client’s Life Experience]

Alec (alias) is a start-up founder of a tech company that is based in the UK. He first came to us because he and his partner would like to set up their business here in HK as a gateway to open their potential Asian market. His big question is he is kind of wavering between a HK limited company vs. other offshore company as his final choice, therefore we came across the following questions with him to guide him through the decision making process:-

*Q1 : “Does your biz have any (and we meant ANY) activities that would take place in HK?”

 >> Answer to Q1: If your business does NOT hold any activity or does NOT have any profits generated here in HK (e.g. your sales contracts should be negotiated and concluded with suppliers outside the city), this kind of business operated wholly outside HK could be suitable to get registered in offshore jurisdictions like Seychelles or BVI, with different well-known merits like easier to achieve privacy protection, no restriction on director, etc., although they do have manifest weaknesses such as flimsy impression your clients might get. However, if your business has some kinds of involvement in HK, then we would recommend you to set up a HK company, as any profit-generating activities in HK will be liable to HK Profits Tax and it is the owner’s obligation to report to the HK Inland Revenue Department (IRD). Forming a HK limited entity would be more suitable if so.

For Alec’s case, he predicted most likely his business would be operated completely outside HK, but since he knew HK company earns a higher reputation standing comparing with other offshore jurisdictions, he preferred to start a HK entity. He also learnt from us that it’d be easier for a HK firm to enter into China market with CEPA benefits available

 

*Q2 : “Do you need to open a bank account in HK?”

>> Answer to Q2: Same as many other int’l businessmen, Alec loved HK’s stable monetary system a lot, and he’d like to make use of its well established, secured financial infrastructure and free flow of capital to help his business grow (also serves as a perfect spot to receive multi-currency payment from clients especially when he planned to develop the business in mainland cities at a later stage). That’s why we had recommended him to establish a HK company in order to facilitate the bank account opening process, as based on our experience over these years, the opening success rate is relatively higher if you own a local company, particularly for foreign entrepreneurs. 

 

*Q3 : “How your tax arrangements would be?”

>> Answer to Q3: This is a question you MUST pay attention to! As known, an offshore entity is easier to get tax exemption if the business is completely operated offshore. It is also not required to prepare audited financial reports generally. Whilst in HK, the corporate Profits Tax rate is 16.5% in average, though it is a very low rate among the global market. One point you might need to keep in mind is that if you find all your profits are not derived from HK after your HK company has operated for some time, you can apply for Offshore Claim to try getting tax exemption in HK.

Alec did that after his company had operated for around 1.5 year. Since we were appointed as his tax representative, our tax specialists were able to help him handle all tax reporting issues in HK (including but not limited to the filing of Profits Tax Return when his firm’s tax exemption status was not granted yet) as well as the Offshore Claim to the IRD. Actually, once an Offshore Claim is filed, the IRD would request much more detailed information, and the applicant needed to be very well prepared for answering those questions within the given time period. Freeing our client’s hassles, we’ll manage the whole application process including all correspondence with the IRD to provide the appropriate information and data that they require.

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All in all, BRIDGES’s mission is to help our int’l clients like Alec to pick the most suitable vehicle for his / her business here, and thus his / her company would be able to maximize its profits and efficiency while saving the unnecessary cost and time.

The above three questions are some significant ones for you to examine yourself, yet there are always exceptional cases so you can always check with our advisors for more guidance before you decide which entity type to go for. Here please find our package details for your easy reference:-
 - HK Incorporation Package
 - Offshore Incorporation Package

Chat with us now and see if we can be of any assistance in smoothening your venture establishment in this beautiful city.

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With the pandemic turmoil of the European and American economy, many global businessmen have pivoted to explore further in Asian countries. Among the different choices, Hong Kong is always the one winning the independent entrepreneurs’ heart. Wanna know the reasons behind?!

In this blog you will read the facts of why our start-up clients have picked HK as their preferable place to set foot in, and the easy steps of finishing the whole incorporation process that might be useful in your pre-startup research stage - you will know not only it’s not complicated at all, but also very advantageous to you on your further business expansion.
 

 

Easy Procedures

Forming a HK limited company is very straightforward, yet, if you didn’t get a professional service provider, hassles may come like being shocked by the hidden costs. We have been in this field for more than a decade and serving countless start-ups and SMEs in setting up their company inbound and outbound with our all-in-one package (no hidden costs at all). Let us share a few tips and you will find establishing your own company has never been easier.

 

STEP 1: Collecting the required documents (please refer to the list below) for registration at the HK Companies Registry :

There are 2 types of Required Documents:

Type I. If the Director / Shareholder is an individual:

> Copy of all Directors & Shareholders’ passports / HKID

> Copy of all Directors & Shareholders’ addresses proof

* The Director & Shareholder can be the same person, which means it only takes 1 person to complete the process.

Type II. If the Director / Shareholder is a corporation:

> Copy of Business Registration (BR) Certificate

> Copy of all Directors’ passports

> Copy of  registered office’s address proof

> Articles of Association

> Meeting minutes of agreeing to appoint Directors / Shareholders for this Company

* If the Director is a corporation, it is required to appoint at least one individual Director to comply with the new Companies Ordinance. Please check out some Hot FAQs here for more details.

 

STEP 2: Pay to go !

Once your incorporation payment is confirmed, we will get on preparing the Government paperwork for you to sign. Since we have been cooperating with several leading banks or credit card institutions like American Express, China UnionPay, Bank of China, Shanghai Commercial Bank, etc., the payment process is swift and easy.

 

STEP 3: Submitting your signed documents to Government :

Even if you are aboard, we will help submit all signed application documentations to the Government for swift processing. In fact, by the time you reach this step, you are already halfway through setting up your own company.  Yes, it does sound easy and simple because our team would get it all done for you, like approaching different Government departments to file the required paperwork. Just to give you a brief idea of the time frame, for a ready-made (shelf) company, it takes around 2 working days to process; for an all-new company, it would take around 1 week or less to process.

 

STEP 4: Opening bank account :

You may ask: ‘How can I finish all company setup and bank account opening procedures as I'm stuck at my place?’ The good news is BRIDGES is now adopting a remote incorporation approach. From business consultation to business set-up, everything can be settled via the Internet. For bank account opening, indeed many traditional banks require physical presence and it usually takes a one-month appointment in advance. However, now with the pandemic, you might consider utilising fintech platforms to facilitate your business transaction especially if you are trading in multiple currencies.

There two rising bank account alternatives in HK which we work closely with - Statrys and CurrenxieBoth do not require the physical presence of applicants and offer more than 10 different currencies, details please refer to the article "
Traditional Bank Account Alternatives to Run Business".

What to Prepare for Opening a Bank Account?

We understand the assessment criteria of international banking are getting higher, including HK’s banking and financial system. Under this global trend, a well and thoughtful preparation before the bank appointment always helps. If you managed to fly to HK, we will help arrange an appointment with bankers in advance on your behalf. What’s more, sets of the certified true copy are included in our package already for presenting to the bankers. Before the appointment, our experienced specialists will advise you of the documents needed to prepare (e.g. passport copy, residential address proof, business plan, business proofs, etc.), so that the whole process could be sped up and the situation of missed documents is minimised. Some banks can even offer our clients pre-screening to let you know whether your provided documents are sufficient for the bank appointment. In general, the assessment time will be around 2 - 4 weeks provided that all required supporting documents are submitted to the bank for review. We work closely with HSBC, Hang Seng Bank, DBS, OCBC Wing Hang Bank, China Citic Bank, etc. and we will guide you through to smooth out the whole process.

 

Tax System Is Favourable in HK?

Some expats might be worried about not being familiar with the local tax system, yet HK is famous in the world for having a rather simple and low tax regime. There are two main taxes: Corporate Profits Tax (16.5%) and Personal Salaries Tax (15%), and there is no dividend tax in HK. Generally after 18 months of your limited company incorporated, you will receive the 1st Profits Tax Return. When your company is in good hands like us where there is an in-house Accounting Team able to assist your business with all accounting work, audit arrangement and getting prepared for local tax compliance, you can rest assured that all these essential functions will be handled properly (and timely) in a legitimate way.

 

HK Incorporation vs. Singapore Incorporation?

Both HK and Singapore are popular jurisdictions in Asia for international businessmen thanks to their good reputation. However, one main difference is that forming a Singapore company requires foreign entrepreneurs to partner up with a local Singapore citizen, while there is no limit on the nationality of the director(s) in setting up a HK company.  It means no matter what your nationality is, you can freely form your own company in HK without the need to include a HK citizen as your company’s stakeholder, giving you much flexibility in the company structure.

 

How HK Serves as a Stepping Stone into China?

The China market is definitely a stage that the world has put their eyes on it. Of course, setting up a China limited company could be the most straightforward way. Hence, for expats, they will have to set up a special type of entity named Wholly Foreign Owned Enterprise (WFOE) according to the China policy. From our experience, if you own a Hong Kong limited company as a shareholding company, it would be way more beneficial to use it informing your WFOE due to the close economic partnership between HK and Mainland China i.e. under The Closer Economic Partnership Arrangement (CEPA). Not to mention financing in HK is much more accessible than in China, and all major international banks are located in HK, leading people to love HK’s banking network and high standard system in terms of technology and security. In contrary to China, there are no restrictions or approvals needed to receive or transfer funds / foreign currencies in HK as you might know.

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If you have any further questions on setting up your own company, please feel free to email our company incorporation team, at info@bridges.hk to know more of our practical advice. Or, simply drop us a private message to chat with us, we will be glad help smoothen your ride in HK.

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When talking about opening a bank account for new business in HK,  some people might have an impression that the whole process is pretty arduous and the success rate is poor, especially for those foreign entrepreneurs. This preconception is not true any longer according to what we observe at present, and here comes how our team can make the entire registration journey much more convenient and efficient with a basket of practical advice and close follow-up with banks.
 

 

Yes, it’s generally recognized that HK topped the global ranking on banking and financial infrastructure for its secured monetary system, well-established legal regime and free currency exchange circulation (especially when compared with mainland cities), and that’s why many savvy entrepreneurs have picked HK as their base in Asia, although the bank account approval process could be more rigorous somehow when compared with other offshore jurisdictions, provided that the reputation of HK’s financial regulatory system is much stronger.

 

While the assessment rules of worldwide banks are becoming tighter too to prevent illegal operations like money laundering, it is understandable that the assessment criteria of opening a bank account in here are getting higher under the global trend, even though quite a large number of applicants might not be very familiar with what to prepare and how to prepare to match up with the ever-changing bank compliance. Hence, an experienced consultant can turn this whole situation around with the intensive know-how and extensive banking network. Let’s take a closer look into how consultancy helps increase your success rate and bring you much convenience in bank account opening:-

 

What Makes a Unique Consultant?

An experienced competent consultant will not only tell you what documents to prepare before meeting up with bankers, but a review on your documents and practical suggestions will also be provided to facilitate your bank application. For example, based on your individual case background and needs (i.e. business nature / passport country / residence country / buyer & supplier background, etc.), the consultant will suggest the most suitable bank(s) for your business since he will know which bank could be the best fit, like some business natures could be more favourable to certain banks. Or how you can enhance your prepared documents to fit the banks’ particular requirements that they will update the consultant from time to time.

After all the official documents are submitted and the appointment with bankers is confirmed, the consultant will then notify you so you can book your flight to HK to meet with the banks, and pick up the registered company materials (e.g. business registration certificate) all at once, within only one trip to HK. To conclude, a knowledgeable consultant will not only give precise insights based on your case background, but also require skillful planning so the clients can set up their company in the most efficient way and get prepared for the weighty bank appointments made.

 

How Consultant Makes a Difference?

Take BRIDGES consultant as an example, we often face queries from clients asking if they could just start a company remotely and leave the bank arrangements to us. Our answer is Yes, for sure! Here’s how we’ll help at different start-up stages:-

  • ​1. Company incorporation stage ::  After received your company details and ID proofs, our consultants will prepare a set of registration documents for you to sign (even when you’re abroad) and then pass back to us for our submission to the relevant Government departments. Most importantly, during this whole time you do NOT have to be in HK.
     
  • 2. Bank account opening stage :: To save your hassles, our team will manage all steps like helping you make appointments with your preferred banks so you don’t need to run around the city and queue up at bank branches to get their bank account services. Some of our bank partners can even offer our clients pre-screening to let you know whether your provided documents are sufficient for the bank appointment / assessment. This privilege is very important so you can be well prepared for the appointments and success rate can be largely enhanced.

We fully understand that each client’s case background is different and thus some banks could be more suitable for you while some are not. For instance, some banks might require all Director(s) and Shareholder(s) to come to HK, whilst some banks only need half of them to show up. That’s the reasons why BRIDGES has put a lot of resources in expanding our HK as well as global banking partner network over the years, with the aim to provide a full basket of bank choices to you. Within this extensive network, our consultants are highly familiar with up-to-dated bank compliance, strive to maintain a close working relationship with the institutions, and also get to receive the latest updates of assessment criteria from them so it could be a good idea to get our consultant’s help in order to uplift your success rate and keep a rather short processing time too. Click here to read our another hot blog ‘Which HK or Offshore Bank to Pick? Check out Our Handy List!’ to know the different banks’ account requirements and gain more tips.

For now we work closely with HSBC, OCBC Wing Hang Bank, China Citic Bank, Standard Chartered Bank, Hang Seng Bank, DBS, Dah Sing Bank and different overseas banks, for which we believe you will find your best option to operate your business in this place. Here please an interesting article from our client Mr. Jens Krämer on how he opened his bank account with HSBC via our platform before: bit.ly/2o6EUVA.

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Now you recognize how a competent consultant could ease your application pain and smoothen your start-up ride in HK. Especially you wouldn’t want to waste time getting rejected over and over again so this is where a consultant can make a total difference.

Following our provided guidance, standing out from a bunch of account opening applicants, getting everything done in only one trip to HK... all these can be your own experience with the support of BRIDGES on-site consultant team, who will save your various hassles and time cost so you shall find having your own business in HK is not that difficult.

Still struggling with what to prepare for your incorporation plan or which bank to pick? Shoot us an email at info@bridges.hk or just leave us a private message to get our experienced consultant’s help and also uplift your success rate from now!

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