Ask a question
Hello, I’m thinking about launching a new company in Hong Kong for an international EC business though I’m not a resident nor have any address, will not live in Hong Kong.
I’ve googled and found hundreds of incorporation service offices but don’t have any idea which one is trust worthy, and which one is rip-off or con.
Can anybody recommend a specific service or tell me how to find a good service?
Are you sure you want to incorporate in Hong Kong? There are lots of other jurisdictions that are much easier–you get the same thing with much less hassle.
More thoughts here: http://ustax.bz/want-to-form-a-hong-kong-company-read-this-first/
Thank you for reminding me of other places like Belize.
I’m gonna check them!
Thank you guys!
I’m gonna study the feasibility further.
@busdriver is on the money in regards to troubles opening a bank account. that will most likely be a show stopper for you.
I recently had my HK business bank account closed without warning or reason and it’s been impossible to open another one.
If you are aiming for an offshore company (no taxes to be paid to HK government), just forget about it, if your turn-over are not millions of EUR/£/US$, but in that case you would probably not be here on nomadforum — hehe
The work you have with the tax man is just too much and will cost you big time due to the auditing by the government.
Finding a OK service is not the problem. Local services are likely to be trustworthy. I have never been scammed, but I was in HK and could visit the office.
But opening a bank account in HK for a HK company is difficult for locals now and probably (almost) IMPOSSIBLE for foreigners.
I know how to get a HK Bank Account. Last week I was in a HK Bank getting a Company account open, I have an agent.
Were you successful in opening the account? Was it open and ready for business the same day or does it take awhile?
company called bridges, just google them , they were excellent for me and helped me get the bank account also
Need a cheap accountant to help with PTR, tax query letter (to justify offshore status), and maybe even shutting down my company there. I’m with startupregistry.hk and tired of the “Oh and then there is also this cost… And this one… And this one…” game. Thank you!
Anyone have any suggestions for great incorporation companies who have full services?
I’m looking for a company who can handle accounting, incorporating and book keeping (online) for Hong Kong.
Would appreciate any recommendations.
I’ve been really happy with Jumpstart. Responsive and reasonably priced.
Hello guys, I was wondering if anyone had any experience in opening a business bank account in Hong Kong. I’m getting all the paperwork ready to incorporate in Seychelles and open the bank account but the agency that is helping me says Hong Kong bankers are getting more picky. They are asking me for business ‘proof’ since i’ve always ran my sites as an individual I wonder if just proof of payment from ad networks is enough. If you have any advice it would be much welcomed.
It’s quite difficult for startups to open bank accounts in Hong Kong, also see this article: Hong Kong: The worst place in the world for a startup to open a bank account?. It depends on several factors whether or not your will have a hard time opening an account:
Age & size of your business. This is actually a very important factor. While many banks claim or people think that the reason it’s difficult is because of strict anti-money laundering policies this is is only part of it. Banks will be reluctant to go through their expensive due diligence process for a customer that won’t give them a certain amount of profit. Because HK banks are old fashioned, their processes are not always very optimized and cost effective and often it’s a commercial decision not to onboard a startup rather than a risk one.
Almost any bank will require you to be present for face to face meeting. If you are not physically present it is normally going to be difficult.
It is more difficult for non-residents, especially of certain nationalities, to open corporate bank accounts in HK
If you are running a (high) tech startup or new business, the bank may not understand the nature of the business and are reluctant to research. Even if your business is completely legitimate, you may be rejected simply because of a new business model or tech that is not understood by traditional banks.
If you do have troubles opening a bank account; you can check out Neat Business, that would allow you to open a business current account online, from anywhere.
The Nomad Capitalist has a dedicated podcast to this topic — pretty informative and grounding.
Yes, it is becoming increasingly difficult to open company bank account in Hong Kong. Proof of business and experience is a must. The best and most efficient way is to engage a local service provider who has experience in dealing with banks. This way, it saves you a lot of time, effort to identify the bank that is interested in your business. Also, the chance of getting the account opening approved is much higher. Of course, the downside is you have to pay an arrangement fee to the service provider.
Set up a Hong Kong company to conduct business offer many benefits. To name a few: tax savings as maximum corporate profit tax rate is only 16.5% (in some cases can be as low as zero); better corporate image as HK is one of the major financial centres in the world; very simple, easy to understand and flexible business system.
Incorporation still incurs fees to get started and ongoing (accounting, filing returns etc). So considered those as taxes. Plus, it requires mental capacity to work through. You’ll want to someday repatriate the income into your personal pockets and this then exposes you to tax liabilities where you are. Being ‘outside’ of the system in your own state also could create future complications (social welfare, credit scoring etc). It’s very ‘cool’ to be offshore and it’s a natural entrepreneurial drive to minimise tax payments, but I think some nomads get lost in this. Make a lot of money first, then consider navigating this.
During the last couple years, opening a business bank account in HK has become increasingly difficult. Now, only certain banks will actually do this in practice.
To your question, business proof would be items like supplier and purchase contracts, business plan, etc. Anything that can substantiate your business as actively trading and ‘lower-risk’ in the eyes of the bank’s compliance department.
However, since you state that you have payment from ad networks — the nature of your business is likely as an online affiliate. Most Hong Kong banks would classify this as higher risk, more so with a seychelles company. Worse case scenario, you open the SY company and then cannot open the bank account in Hong Kong.
Your better bet would be to open a Hong Kong company OR to search for a bank account elsewhere. For instance I could set you up with a first tier bank in Singapore with a Seychelles company.
There is a list of different options to incorporate here: Incorporations.io that we made for this exact purpose, to help entrepreneurs decide on the best place to incorporate by comparing different options side by side.
I’ve been told that you can open a business there and pay 0% taxes as long as the activity is out of Hong Kong. I will also be interested in that
I’ve just hit the 18-month mark of business in Hong Kong ready to submit by first Profit Tax Return. I also have the option of filing an Offshore Profits claim.
The Offshore Profits claim itself seems to be a convoluted, long drawn-out process with significant costs to bare in working with a certified CPA to answer Inland Revenue Department questioning.
I’d love it if somebody who has been through this already were able to answer the following questions:
- How long did it take for the claim to be accepted or denied?
- What was the end result?
- How much did the IRD dig into each transaction?
- How much did you pay your agent to deal with the offshore claim?
Any insights are much appreciated!
Many people think they will have to pay no corporate tax when they incorporate in HK, if you want a real opinion about HK, you should ask people who have at least a 2 year old company.
I know someone who thought he would not pay any corporate tax, during the offshore profits claim, he has been asked to provide local tax receipt of his local tax authorities as he was not a tax resident, he could not provide it and had to pay the 15,6% corporate tax. Furthermore, he had to pay the HK company for doing the paperwork 2400 euros. In Total, it was like incorporating in the UK, where corporate tax is 20% because i can count the paperwork has a type of “tax”. If we count the paperwork, local offshore company fees and tax, it was like 20% perhaps more.
Yes, this is a very good point which most people are not aware of, when they setup a HK company. I believe it was on the IRD’s website at one point in the past (but their site is horrible so I can’t find the exact language they use), but it was almost exactly as you described: they expect you to have paid tax somewhere!
I have worked with many tax advisors on this matter. They offer similar advices and services but fees vary significantly. My advice is, work with a trusted tax advisor with reasonable fees. If your company’s earnings justify, definitely worth doing so. After living and working in many different cities around the world, I still find Hong Kong is the best place to have your company to conduct business.
Thought I’d just add to this in case anyone is searching and is wondering about the true cost of a Hong Kong set-up. I’ve just gone through all invoices and totalled it all up. All costs are in USD.
$1089 — Incorporation Costs with Registration / Secretary / Address
After 12 Months
$795 — Yearly Renewal / Secretary / Address Costs
$55 — Admin Fees for Director Resolutions to Withdraw Dividends
This isn’t too bad. But soon it begins to sting…
After 18 Months
$350 — Profit Tax Return Year 14/15 (NIL Value As < 18 months audit not required)
$1375 — Audited Reports with Profit Tax Return Year 15/16
$40 — Printing and Admin Fees
After 24 Months
$795 — Year Renewal / Secretary / Address Costs
$1375 (TBC)+ — Audited Reports with Profit Tax Return Year 16/17
$2500 — Offshore Profits Claim
The offshore profits claim is the biggest hit — the expense is for a tax advisor to justify it — but once it’s done it should be good for up to 5 years OR if your business nature changes.
And this is excluding the $40/month Xero subscription and all the hours of book-keeping and receipt collecting that goes with it.
Of course all these costs are variable. This is just my experience. I think my yearly audits are expensive, but I think the incorporation and renewal costs are relatively cheap by comparison.
If you can be approved on the Offshore Profits Claim and are making good money then after Year 2 things should be pretty nice I guess. But there’s definitely a whole bunch of costs in getting to that point that I’m not sure many people appreciate!
What is going to happen if you just stop paying/auditing and drop your company? Any increased fee or law enforcement?
@homakov IRD will reach out and if things get really bad, they’ll commence civil proceedings against you. However, this does take time to go through the system. I wouldn’t recommend it — much better to go through the correct procedure to close the company (which is what I’m doing at present).
@prof Thanks for the breakdown — mine were considerably higher than that. In comparison, each offshore corp I own costs approximately $1000 (USD) per year to maintain. No audit/filing and I can keep simple accounts on a spreadsheet. The other annoying thing about HK is I would get periodic “surveys” to complete, with the threat of a fine if I didn’t return it in a timely manner.
@international_man Ha. Funny you should mention surveys. About 5 minutes ago I just opened my residential mailbox and received a letter from HSBC Hong Kong requesting an update business certificates held, various other documents, proof residence, passport scans and all the rest otherwise with threat of closure if not submitted within the next three months.
This is a pain, but I should be able to drum together all the documentation…
But what concerns me is in a month or so I’m planning to leave where I’m at now and travel for a few months. I will essentially have no permanent residence anywhere. So — I do wonder how it would be possible to maintain an account if you were perpetually traveling. Any thoughts?
@prof I’ve never heard of that before from HSBC… but doesn’t surprise me…
Get a virtual office address in Hong Kong and update the address held by HSBC, IRD etc to this. Then have the virtual office provider collate your mail and courier it to where you happen to be at the time.
@international_man Yeah it’s a KYC review apparently. They want residential address confirmation as well as business address confirmation so I’m not sure that would cut it.
I’m ok for now — just a bit of a concern for the future since it’s not always easy to get proof of address somewhere obscure if you’re only in short-term accommodation.
This month has been insane for business operation stresses like this. Can’t wait for it all to be over so I can get back to focussing on real business again.
Yes, I checked. It did for a client of mine with 2 HSBC business and 1 private account. Did it for you?
Did anyone thought of closing down a HK LTD before it becoming costly and to open a new one?
I have no clue what the HK authorities would do, but maybe not much…
It’s an unnecessary hassle. As I’ve mentioned elsewhere, HK is a crap jurisdiction. Set things up right so you can get on with the task of running the business and not worrying about admin.
What has been your experience opening bank accounts with your BVI corp? I successfully opened a OCBC Singapore account with a Belize corp, I had to fly there and present a bunch of documents and certificates.
BVI with DBS in Singapore. Set this particular one up October last year. Easy — flew there as well, chatted with the banker who appeared to show a genuine interest in what I was doing. As a banking flag, I don’t think you can wrong with Singapore.
@prof Thanks so much for this summing up, truly useful.
Hey Prof. Thanks for the breakdown. Great. Can you share some details of the accountant that u used in HK. Thanks. Would love to chat further about this also. Do you have an address I can get u on.
What time zone u in?
@prof @international_man Just bumping this back up. Any recommendations in terms of accountants to use for Hong Kong PTR, tax query letter (to justify offshore status) & shutting down a company?
@rich there’s literally hundreds you could choose from. DM me and I can provide you with contact details for the accountancy firm I use.
just messaged you… but also replying for others who might see this… Yes there are hundreds of accountants, but it’s tedious to ask each for a quote and even then you don’t know which hidden costs they pile on later, so therefore asking for recommendations…
Yup. To be honest I’m beginning to feel that way too.
I keep pretty immaculate accounting records but I a lot of my activities don’t have much of a paper trail outside of final invoices. This is what concerns me with the offshore claim.
I’ve found that Hong Kong companies are frighteningly simple to set-up, but an absolute nightmare to manage. And now it looks like achieving the 0% offshore tax rate which seemed desirable in the first place is likely to be an uphill struggle too.
The costs are never-ending and I feel like no agent is ever truly up-front about this.
How easy was it to make that shift?
I shudder to think how involved it would be to wind down a Hong Kong company.
@prof Indeed. I feel your pain. Additionally, they’ll likely charge you provisional tax too (if you made a profit and if they believe you don’t qualify for the exemption).
I’m actually winding down an old HK company of mine — it’s a 9 month process! Unbelievable…
Yes, this is interesting, we have the same issues in HK.
@prof This is why, frankly, HK is not a good “offshore” jurisdiction. Yes, it’s possible to have the claim accepted, but you’ll need to go through the same process each year. I’ve not personally been through it as it was going to be far too much hassle. Instead I decided to shift everything to a BVI company.
As for costs, these will depend on the CPA, but from memory it was around 4-5K USD when I last spoke with a CPA. Additionally, they said the process could take up to 4-5 months.
Hope that helps.
✅ Fast internet
✅ Lots of fun stuff to do
✅ Warm now
✅ Warm all year round
✅ Good air quality usually
✅ Many Nomad List members have been
✅ Spacious and not crowded
✅ Very easy to do business
✅ High quality of education
✅ Roads are very safe
✅ Freedom of speech
✅ People can speak basic English
✅ Safe for women
✅ Family friendly
✅ Very friendly to LGBTQ+
✅ Not many people smoke tobacco
❌ Not very safe
❌ Humid now
❌ Difficult to make friends
❌ Hospitals are not great
Постоянная ссылка: https://zmeinogorsk.ru/cost-of-living-in-hong-kong-prices-updated-dec-2020/