Archive for the ‘Hong Kong’ Category
Hong Kong ranks 4th-largest global FDI recipient
Wednesday, August 4th, 2010Hong Kong was the world’s fourth-largest Foreign Direct Investment (FDI) recipient in 2009, according to the World Investment Report 2010 (WIR) released by the United Nations Conference on Trade and Development (UNCTAD) on July 23. This marks the first time that Hong Kong has attained fourth place in the global rankings and represents a jump from its ninth position in 2008.
For the 12th consecutive year, Hong Kong continues to be the second-largest FDI recipient in Asia, after mainland China.
Although the global financial and economic crisis drove global FDI inflows down by 37% in 2009 compared with 2008, the impact on Asia was less profound. The US$48.4 billion FDI inflows to Hong Kong, for example, represented a 19% decrease. Hong Kong’s share of FDI inflows into Asia held up at about 21% in 2009, similar to 2008.
Looking ahead, the WIR 2010 provided a glimpse of the global economic recovery picture, highlighting Asia’s rapid recovery in FDI flows compared with the more gradual improvement in global numbers. For example, in the first quarter of 2010, FDI inflows to Hong Kong, amounted to US$20 billion, representing a significant increase of 72% compared with the same quarter last year.
Three alternatives to Hong Kong for your offshore trading company in China
Wednesday, April 7th, 2010Due to its financial and business center status, as well as its proximity to mainland China, Hong Kong is usually at the top of the list for our clients looking to set up an offshore company with the main purpose to trade with China. While Hong Kong clearly has its advantages, there are however three other alternatives worth considering: the British Virgin Islands, Marshall Islands and Seychelles.
The advantages shared by these three, as compared to Hong Kong are the following:
-Low incorporation and yearly maintenance fee.
-No profit return filling requirements.
-No filling or annual audit of financial statements.
-Better privacy as to the scrutiny from the Chinese government.
-Better protection of company shareholders/directors which cannot be checked from the public record.
-Clear distinction between the onshore/local companies and the offshore ones (International Business Corporations or IBCs).
-Possibility to issue bearer shares, or shares with or without par value (Please note however that most banks currently do not accept to open bank accounts for companies with bearer shares).
The British Virgin Islands are one of the oldest and better established offshore jurisdictions. While concerns exist as to subsequent tax treaties BVI has entered in recent years, it is still a very suitable jurisdiction for setting up an offshore trading company.
Seychelles is a younger offshore jurisdiction, the International Business Act dating only from 1994. It is an increasingly popular jurisdiction worldwide, and is gaining acceptance in China as well.
The Marshall Islands are much less known than the BVI or even Seychelles. This jurisdiction has the lowest fees for both registration and annual maintenance. Most of the functions of the Marshall Islands IBC are similar to the BVI or Seychelles ones.
Offshore companies registered in the BVI, Marshall Islands or Seychelles can also easily open a bank account in Hong Kong. Sinoinvest Consulting provides a remote account opening service for a one-time USD400 fee; you can also contact any Hong Kong bank and travel to Hong Kong to set up your account provided you have all the paperwork in place.
The BVI, Seychelles are Marshall Islands are true offshore jurisdictions, while Hong Kong companies do not have a separate regime for companies operated from within or from outside Hong Kong, but only specifies that non-Hong Kong sourced income is not liable for tax with the Hong Kong government. However, even when that is the case, one needs to apply for exemption from the tax authorities, and in case you operate your bank account in Hong Kong, you might be required to justify that the operations of the company are not related to Hong Kong. To avoid all this hassle, if your company will be mainly used to buy or sell to/from China, selecting one of these three jurisdictions will make a better business sense in the long term.
IMPORTANT ADVANCE NOTICE
Tuesday, March 30th, 2010In order to carry out the year-end closing of our accounting records, instant services for “new business registration” and “updating of change of business particulars” will be suspended on 1 April 2010 (Thursday). The Business Registration Office will resume normal services in the morning of the working day, i.e. 7 April 2010 (Wednesday), immediately after the public holidays during 2 April 2010 (Friday) to 6 April 2010 (Tuesday).
As our computer system needs to adjust for the new financial year, the relevant business registration certificates for the “new business registration” applications received on 1 April 2010 (Thursday) will be issued in the morning of 9 April 2010 (Friday). Any inconvenience caused is much regretted.
Business Registration Office
(From the IRD government website)
Hong Kong Incorporation Package New Pricing
Saturday, April 4th, 2009Due to to the increase of the business registration fee by the Hong Kong government, this month, we will be raising our Hong Kong incorporation package price from USD1,200 to USD1,350. The new price will become effective starting on Monday, April 6th, 2009. Thanks for your understanding.
Opening a corporate bank account in Hong Kong
Saturday, April 4th, 2009Hong Kong is one of the leading financial centers in Asia with a world-class banking infrastructure. There are no restrictions on capital inflows and outflows to Hong Kong. For offshore companies, operating a corporate account in Hong Kong is much cheaper both in terms of minimum account balance requirements and monthly fees.
Both Hong Kong registered and offshore companies (including BVI, Seychelles, Panama) etc. can open a corporate bank account in Hong Kong, although requirements may vary. For instance, overseas companies will be required in most cases to provide a certificate of incumbency or a certificate of good standing, while this is not required for Hong Kong companies. In most cases banks will require the incorporation documents to be certified by a Hong Kong CPA.
When selecting a bank in Hong Kong, the following factors should be taken into account:
-Online banking: If you operate offshore, offshore banking is an absolute necessity. Make sure to select a bank that has stong internet banking facilities.
-Multi-currency support: does the bank offer multi-currency accounts (USD, Euros etc.). Most banks have both Hong Kong dollars only and multi-currency accounts.
-Service fees (monthly charges, fees for receiving and sending out T/T, currency exchange fees etc.)
-Bank reputation
-General support level
-China/International network
-Value added services: ATM card with worldwide withdrawal support, trade account options (for L/C transactions) etc.
We recommend HSBC and Standard Chartered to open a company bank account in Hong Kong. Feel free to contact us if you require our assistance to set up a bank account for your company in Hong Kong.
Hong Kong companies and China visa issues
Saturday, April 4th, 2009One question that we often get from our clients is whether registering a Hong Kong company can help in obtaining a business visa or a residence permit in China. The answer is NO. Although part of China now, Hong Kong is in reality a very separate jurisdiction, as per the “one country two systems” policy. Hong Kong companies are considered as foreign companies in China, and investment from Hong Kong into the mainland is considered as foreign investment. In that regard, operating a Hong Kong firm is not more helpful to get any visa facility for mainland China, than say a BVI or US company.
The proper way to get a one year residence permit in mainland China as an owner of a Hong Kong company, would therefore be to open a representative office in China for that company, if one doesn’t want to invest in a WFOE (wholly foreign owned enterprise). Obviously additional fees will apply. In most cities it will take about 4 to 6 weeks to process the representative office registration.
Using a Hong Kong company to operate a business in China
Saturday, April 4th, 2009Hong Kong has historically been a gateway to China. Despite the rise of major financial and trading centers in the mainland (Shanghai, Shenzhen, Beijing, Guangzhou etc.), the city has remained attractive for foreign companies expanding into the region because of its free market system, clean government, low taxes, world-class infrastructure, skilled workforce and international lifestyle, among other advantages.
For China residents, especially foreign nationals, incorporating in Hong Kong has always been a very strong alternative to setting up a business in a mainland Chinese city, where start-up. Consulting and trading are two areas where using Hong Kong has become a trend.
Consultants in China can use their Hong Kong company to bill their customers, both in China and overseas. For their China customers, providing services as company would definitely be better perceived than doing it as an individual. For international clients, one can provide China-related consulting services by using a Hong Kong company, which technically is part of China, without the price tag that comes with incorporating in mainland China.
Sole traders living in China can use a Hong Kong company to receive payments from international clients and pay their Chinese suppliers. Considering that China doesn’t tax offshore profits, and mainland China is considered offshore, this is a very attractive solution to conduct international trade without the need to rent and operate an actual office.
There are disadvantages for using Hong Kong companies to operate in China however. The first one would be the inability to receive RMB payments and bill your Chinese customers in RMB. Indeed, Chinese firms and individuals will require in most cases to pay in Chinese Yuans (or RMB, the official currency), and will need an official tax receipt (“fapiao”) to justify their expenses in their accounting records. A Hong Kong company is legally a foreign company in mainland China and as so is not able to issue such invoices. Furthermore, Chinese Yuans/RMB cannot be sent from mainland China to your Hong Kong company bank account, meaning the need for your customers to change their money into USD/HKD first which can be a burden.
Another disadvantage would be the visa and other tax/legal issues if you live in China. As we said earlier, a Hong Kong company is considered a foreign company in China and as does not entitle the owner for a residence permit in mainland China. In face of the increasing tightening of the visa regulations in mainland China, this may mean frequent trips to Hong Kong or even to your home country. This can be solved however when you set up a representative office for your Hong Kong company in a Chinese city.
We register Hong Kong companies for USD1,200 only. Feel free to contact us for more information or to receive the application form. Only a passport copy is required and the whole procedure can be completed within 15 days.
