It’s not big news that every year citizens have to pay tax when the Govt letter arrives (around Apr / May time). For entities, there are more they have to prepare besides simply paying tax, where they are also required to get their accounting and audit reports ready, including different types of documents that must meet the local compliance. But what’s more for you on top of fulfilling the basic requirements every year? Are there major benefits of getting a well structure built in the early stage before moving things forward? Surely there’re... Let us tell you what we learnt from serving over 10,000 global clients these years.
 

Accounting work... could be tedious and giving you a big headache, but why not turn it over?

 

At the end of the day, what’s more besides of just submitting the documents to the Govt?

Well, indeed there are plenty of good reasons you should find a way or expert to do accounting & audit work for your business properly, take a look!
 

  1. Here Comes the Hard Truth : Fulfillment of Local Compliance

    First thing first, as much as we find the accounting work is giving us a headache, it is a reality that we have to fulfill the local Govt’s requirements and comply with the right format. This is just simple legal demand by the regulatory bodies, let’s move on to the next point to see what’re the benefits for an entrepreneur...
     

  2. Good Bookkeeping Records.. Just Make Things Better!

    From time to time we received questions like ‘Can I handle my own bookkeeping?’, ‘Can I be my own accountant?’ before those who become our clients later on. Our answer is always: yes you can, but make sure you do it right. 

    What does it mean by ‘do it RIGHT’? We will explain further: over the years, we have helped our clients not only to build their bookkeeping records from scratch or having a ‘makeover’, but also to complete a full set of accounts including Profit & Loss Accounts, Balance Sheet, Trial Balance, etc. in a very proper and tidy way for the auditor to assess every year, so as to provide a good structure for executing a well-conceived tax efficiency plan in the financial reports when the business starts making profits. Just imagine, your business grows bigger and bigger in time, more and more transactions will be coming in. And if you didn’t have a good foundation for your accounting records, let’s just say it will become a snowball effect, the troubles will grow bigger while rolling and it will be much harder to manage well that time. You can foresee how would a business be, if its financial reports are not even clear for review and for tax planning use.
    # Tax computation and disbursement fees are waived at BRIDGES.
     

  3. Business Performance Booster - Regular Management Review

    Ever heard of an old saying, your biggest enemy is your old self? Well, it’s same for business. In order for your business to have a healthy growth, it is highly recommended to review your business, revenue stream, costing practices, etc. time by time. 

    How to do it in an efficient way? A highly-organized accounting record, along with some of your business activity analysis reports could save you lots of hassles during regular review. Once the review is done, you can then make new or specific financial goals for your business and review again next time. 
     

  4. Growing Bigger?! Definitely! What Should I Do with My Tax?

    Last but not least, we believe every entrepreneur dreams for expanding their business as time goes by. While there are million different ways that could help you expand your business further, there are also some preparation you could be aware of beforehand especially when you are planning to expand your business across border. 

    Just like what we have been doing for our clients, from the moment they handed over the accounting work to us, our trained accountants from BRIDGES’ one-stop-shop platform will not just simply ‘complete’ the job but we will also provide insights and advice on how the client should arrange the paperwork appropriately from a long-term angle - like if it is applicable to adopt an apposite tax-efficient strategy based on the case or even suitable to apply for offshore claim further. Read this blog if you would like to know more about offshore claim for possible tax exemption. Besides of local and cross-border tax planning, you may consider to get HK tax residency certificates too to enjoy the DTA benefits, please refer here for details. 
     

You now see there could be a lot of ‘fun’ and benefits if you do the accounting work properly and wisely. If you are not sure whether you are on the right track or not sure what to do? Why not drop us a message and start a chat with our consultants right here, or simply email to info@bridges.hk anytime, our in-house professional accounting and tax team will be more than happy to understand your case and provide corresponsive advice or make a free appointment with you to look into your case.

Get yourself prepared before the April Tax Filing Season arrives!
** Approaching in a few days **

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In the blink of an eye, it’s the beginning of a year again, which means you could start over to think about how to deploy your business plans, and at the same time, not to miss any local compliance duties that might affect your company’s operation, especially if you are a foreign entrepreneur. Ring a bell? Yes, don’t forget the principle “the earlier the better” - when it is talking about tailoring your own tax strategies and being well prepared to report your taxes to the Inland Revenue Department (IRD) on time in this year’s Apr, not too much time left honestly. 

** Commencing from the year of 2018/19 (i.e. on or after 1 April 2018), the HK profits tax rate will be reduced from 16.5% to 8.25% according to the newly proposed two-tier profits tax system. On this system, the tax rate for the first HK$2 million of profits is being halved to 8.25%, and 16.5% will be kept for profits exceeding that amount. Without a doubt, this new measure will provide huge tax relief to start-ups, SMEs and international entrepreneurs like you, provided that 8.25% is an extremely low profits tax rate among global market.

No clues yet on where to start? Let’s take a closer look at some of the basic TAX FILING & PLANNING areas that need your attention if you have a business in HK :
 

 

Get Familiar with the Compliance

There are 3 types of annual tax returns the IRD will issue to those entrepreneurs doing business in HK for more than 1 year since the date of incorporation: Employer’s Return, Profits Tax Return and Individual Tax Return. Different tax return has different kinds of compliance. Taking Employer’s Return as an example: there are several types of document you need to file for your employees compulsorily (e.g. completed BIR56A and IR56B - the Employers’ Return of Remuneration and Pensions Forms; completed IR6036B that is about remuneration paid to persons other than employees; etc.), for which you might feel dizzy when seeing all these requirements and a little nervous that some of them could be filled out incorrectly, and your tax return will get rejected at the worst case.

So yes, if you are not familiar with HK tax compliance, it can give you a real headache (although HK tax regime is rather simple, its documentation filing requirements are relatively rigorous due to the well-developed regulatory system). For you, it could be a stress-relieving assurance if all your tax filing duties are managed by a professional and experienced agency in HK with good reputation.

 

Accurateness & Effectiveness

Please keep this in mind: if your accounts and audit reports are not built properly from the beginning, it is not easy to further execute an effective tax efficiency plan in the financial reports when you start making good profits at a more matured stage. Some people might think they can just prepare some simple bookkeeping records by themselves for their businesses since they don’t have much resources - that’s a misconception indeed - provided that every HK business is required to submit audit reports to the Government every year in general, if the full set of accounts including Profit & Loss Accounts, Balance Sheet, General Ledger, Trial Balance, etc. is not available for the auditors to assess, they just can’t finish the auditing procedure, and nearly unable to give any advice on tax compliance strategy.
In fact, getting a reliable accounting service provider to help is not as hard (and expensive) as you think, simply check out the rate here to have an idea. After your accounts and audit reports are well arranged at an early stage, next you will be able to review the whole financial picture of your business in advance, and receive the tax computation information for fixing your financial strategies in the most tax-efficient manner.

Yet, not only we need to focus on financial accurateness and optimisation, timeframe is also one of the key elements. Given that you‘ll not want to face penalties or prosecution due to late submission of tax return (or so far without noticing it at all), some agencies will even send you reminders and related advice on your coming tax reporting date and you would never, ever miss the deadline! For those outstanding service providers that are capable of doing this, it would need years of battlefront experience or in-house accounting specialists to take care of their clients, case by case, from head to toe.

 

Tax Exemption for Offshore Company?

As one of the most flourishing market in the world, HK has adopted a lot of overseas investors. Some of them (including you??) might be running an offshore business while the operation does not really take place in HK. You may wonder how your company can be claimed as an ‘offshore business’ by the IRD and it will then be able to enjoy tax exemption? To put it simply, certain criteria need to be met to qualify for such definition, e.g. the terms of the purchase and sales contracts are completely negotiated and conducted with suppliers and customers outside HK; the service is performed in a place wholly outside HK; etc. Please click here for details of qualifying for ‘offshore claims’ submission, while one important key is to prove the profits are not liable to HK Profits Tax by proper planning at the initial stage.  

As seen, there are heaps of tax compliance issues that could be affecting your final tax reporting and optimisation result. Although different accounting & tax advisors have their own specialties, how do you know which one can be trusted? For newbies, trying to go for those with word of mouth, years of experience and a solid foundation might help. If you are still unsure how to start or execute the whole arrangement properly, simply send a private message to us today!

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When starting up your venture in HK, choosing the right bank could be an aspect that need more of your attention, so as to smoothly enjoy the superb and secured banking system of HK as one of the largest international financial centres.

This part is especially vital for foreign entrepreneurs - sometimes they just have no clues how their application could be made better and there is just no one more experienced, more learned, or more advisable to offer the help that they really need. If you are one of them who plan to establish your business in here,  this article is the right reading material for you to start getting well prepared and shorten the processing time.

 

Which Banks We’re Joining Hands with?

One of the valuable assets of us is our team’s over 10 years of experience working with the leading banks in the industry for serving our start-up clients. Honorable recognitions and partnership awards were received throughout the years (please find award photos here to share our joy) and it’s always our commitment to strengthen the fruitful relationship with different partners for the sake of bringing the utmost benefits and convenience to our clients at the end.  Some of our partners could even meet the clients at BRIDGES Centre to save our clients’ time and thus they don’t need to queue up at the branch for unlimited wait. Let’s take a look at the list we usually make appointments for our clients:-

 Here’re more bank options BRIDGES works with...

Meanwhile, popular offshore bank options include: ABC Banking Corporation, ABLV Bank, BlueOrange powered by Baltikums Bank, CIM Bank, Euro Pacific Bank, Rietumu Banka, etc.

 

What to Prepare for the Appointment?

To help you get well prepared for the appointments after our bookings with banks are confirmed, we will provide a tailored document list for you to read and you can present your business with solid proofs to the bankers in the meeting. Before the meetup, a review on your documents and practical suggestions will be provided by our consultant to strengthen your success rate since we know how huge the difference could be for having a well preparation that matches up with latest bank compliance.

Here’s a general document list that might give you an idea on the preparation work:-

> Certificate of Incorporation
> Memorandum and Articles of Association / Articles of Association
> Business Registration Certificate
> HKID Card / Passport of Principles or Directors
> Residential Proof of Principles or Directors (e.g. personal bank statement, driving license or public utility bill issued within the past 3 months)
> Business Proof (e.g. trading invoice, bill of lading, payment record, contract / agreement)   
> Business Plan (e.g. what kind of business nature, what is the source of fund, etc.)
> Company Chop

The above is the required documents applied to major circumstances, for some cases the bank might need some additional documents. For this, many of our clients might not know  before they came to us, and it is the time our consultant will help to review the client’s case and provide suitable advice to speed up the process. For example, based on your business nature / passport country / residence country / buyer & supplier background, etc., we will suggest the most suitable bank(s) for your business as we 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 our consultants from time to time. Not to mention our team will help you pre-arrange the bank meetings so you can fly to HK once only to meet the bankers and pick up your company kit on the same day.

During our years of services, BRIDGES has served many different types of clients coming from all over the world - we know their needs and we act as a ‘bridge’ to connect the suitable clients with the suitable banks via our expertise, and to ensure the process runs as smooth as possible. Within this, the friendly and close working relationship with different parties proves effective, no matter it is local, international or global-scale bank. 

If you are still thinking whether you should go ahead for the incorporation and bank account opening in HK, why not talk to one of our consultants today? Simply drop us a message to start chatting with us or send us an email at info@bridges.hk to get our prompt help. We will ensure your start-up needs are being well taken care of whenever and wherever.

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