Speaking of tax obligations, for entities, there are many more besides tax paying. They are also required to get their accounting and audit reports ready along with other different types of documents to meet the local compliance. But what’s more for you on top of fulfilling the basic requirements every year? Any benefits of getting a good structure built in the early stage before moving things forward? Read on this article to see the tips from our in-house accounting team which has served over 10,000 global clients in the past 19 years.
 

Good Bookkeeping Records Path an Easier Way

Many people imagined they could handle their own bookkeeping records, but in fact, it's tricky for non-professionals because things could get rather messy. 

As your business grows, so are the transactions, it becomes more difficult to handle. And if you didn’t have a good foundation for your accounting records, it will snowball and the records will be much harder to manage later on. Over the years, we have helped plentiful clients to rebuild their bookkeeping records from scratch because some of them have been "managing" their records wrongly. Having a professional accounting team that helps complete a full set of accounting paperwork including Profit & Loss Accounts, Balance Sheet, Trial Balance, etc. properly for the auditor to assess every year, will provide a good structure for executing a tax-efficient plan in the financial reports when the business starts making profits. 
# Tax computation and disbursement fees are waived at BRIDGES.
 

Business Performance Booster - Regular Management Review

Your biggest enemy is yourself.  Well, it applies to your business too. In order to let it grow, you should review your business, revenue stream, costing practices, etc. regularly. 

To make your review efficient, a highly-organised accounting record alongside some of your business activity analysis reports could save you lots of hassles. Once it's done, you can then make new or specific financial goals for your business and review again next time. 
 

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

We believe every entrepreneur dreams of expanding their business. While there are million different ways that help expand your business further, there is also some preparation you could do beforehand especially when you are planning to expand your business across the border. 

From the moment they handed over the accounting work to us, our in-house qualified accountants will provide insights and advice on proper paperwork arrangement from a long-term angle, for example, adopt an apposite tax-efficient strategy based on the case or even apply for an offshore claim if suitable. Read this blog if you would like to know more about offshore claims for possible tax exemption. Other than local and cross-border tax planning, you may consider getting HK tax residency certificates too to enjoy the DTA benefits, please refer here for details.

Last but not least, we strongly suggest you submit your tax returns as early as possible to avoid COVID-19 caused delays or disruptions and make the most of the full dedication of our professional team.

There are a lot of benefits if you do the accounting work properly and wisely. If you are not sure whether you are on the right track, email info@bridges.hk or call +852 2159 9666 anytime, our in-house professional accounting and tax team will be more than happy to provide corresponsive advice or make a free appointment with you to look into your case.

Get yourself prepared before the Tax Filing Season arrives!

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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, don't miss any local compliance duties that might affect your company’s operation, especially if you are a foreign entrepreneur.

**Commencing from the year of 2018/19 (i.e. on or after 1 April 2018), the HK profits tax rate is adjusted to 8.25% according to the two-tier profits tax system. The tax rate for the first HK$2 million of profits is 8.25%, and 16.5% will be applied for profits exceeding that amount. 

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.

Although HK tax regime is rather simple, its documentation filing requirements are relatively rigorous due to the well-developed regulatory system. Therefore, it might be easier if all your tax filing duties are managed by a professional and experienced agency in HK with a good reputation.

 

Accurateness & Effectiveness

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 mature stage. Some people might think they can just prepare some simple bookkeeping records by themselves for their businesses since they don’t have many resources - that’s a misconception - 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 an accounting service provider to help is not as hard (and expensive) as you think, check out our rate here to have an idea. After your accounts and audit reports are well arranged at an early stage, 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.

 

Tax Exemption for Offshore Company?

As one of the most flourishing markets in the world, HK has adopted a lot of overseas investors. Some of them 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 if it will be able to enjoy tax exemption. 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? If you are want to start or execute the whole arrangement properly, send us an email at info@bridges.hk or call +852 2159 9666 today.

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It's incredibly crucial to choose the bank that fits your venture in HK best, so your business can enjoy the superb and secured banking system of HK. If you are about to open a corporate bank account, this article is for you to get prepared so you can make things right and put your corporate bank account to work ASAP.

 

BRIDGES Bank Partners

Our team’s 19 years of experience working with numerous leading banks have got us honourable recognitions and partnership awards throughout the years. We're committed to strengthening the relationships with different partners for the utmost benefit and convenience to our clients. Some of our partners could even meet the clients at BRIDGES Centre to save our clients’ time. Take a look at the list of our dependable bank partners.

*Due to the travel restrictions of COVID-19 around the worldHSBC allows clients to sign the paperwork at its overseas branches; OCBC Wing Hang allows clients to sign the paperwork at its branches in China; DBS HK also offers remote account opening if the client can sign the paperwork with the witness of the Notary, provide Notarisation of passport and address proof.  

Our offshore bank partners include BlueOrange powered by Baltikums Bank, ABC Banking Corporation, Meinl Bank AG, CIM Bank, Euro Pacific Bank, Rietumu Banka, etc.

We also work closely with a few renowned online finance platforms including Currenxie, Airwallex, Statrys. To learn more, go check out "Bank Account Alternatives to Run Business".
 

What to Prepare for the Appointment?

To help you get prepared for the appointments after our bookings with banks are confirmed, we will provide a tailored document list for you to present your business with solid proof to the bankers. Our consultant will also review your documents and provide practical suggestions before the meeting.

Here’s a general document list:

> 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 additional documents. 

If you have any questions regarding the company incorporation or opening a bank account in HK, send us an email at info@bridges.hk or call +852 2159 9666. We will ensure your start-up needs are being well taken care of whenever and wherever.

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