How to Set Up a Business in Hong Kong
Many small business owners’ lips are ‘How to set up a business in Hong Kong’ and more so when faced with the choice between working for a local firm or an international one? Well, there are positives and negatives to both. Most importantly, business owners are faced with a daunting task when deciding between the two – which one to choose? Following are some benefits of company formation in Hong Kong:
How to set up a business in Hong Kong? – it is highly recommended that you establish your own business as a Limited Liability Partnership or a Private Limited Company. While a standalone company has all the benefits of doing business in different countries, an LLC has a few limitations. It is highly recommended that you avoid the pitfalls that an open company will encounter and stick to the guidelines laid out by the law. It would help if you were operating within the confines of the laws of your country.
Tax Advantages – a company or LLC is not liable to pay income tax. It makes it easier to manage your business as you would have to pay tax at the corporate level. If you own the company, it is highly recommended that you look into paying income tax as this can be taken out of the business’s profits, which may not be a good thing. There are advantages and disadvantages of every business structure, and choosing a good one cannot be done overnight.
Time Efficiency – if you run a Limited Liability Company, you will not have to handle and manage any accounts and bureaucracy such as accounts payable and accounts receivable. The solicitors will collect your company you have chosen and deal with these issues on your behalf. The entire process can be handled at one location – meaning more time to spend with loved ones and take on more clients. You can save money on your time management by managing the business yourself, which will allow you to spend time living life and enjoying what you like to do.
Company Formation is one of the most significant steps you will need to take when thinking about setting up a business in Hong Kong. It is recommended that you use a professional company formation company to help you set up your company and ensure it is set up correctly. Using a company formation company will mean that you can rest assured that your company will be run perfectly. All of the documentation you need to have in place will be ready to send to the Companies Registry. If you choose to handle the company process yourself, you may have to use the help of accountants who are well versed in the ins and outs of the Hong Kong company laws. You will not have the experience or knowledge to ensure that everything is in order and no mistakes are made.
Opening a bank account and getting a business loan are essential things you must consider when planning how to set up a business in Hong Kong. Obtaining a business loan is usually done through a traditional bank such as the Hong Kong Banking Corporation or the Central Provident Fund. Most financial institutions in the territory will require you to have a business license before giving you any business loans. Business licenses are easy to obtain, and rarely do they need a lot of documentation. Once you get your business license, you will get a business loan at a meagre interest rate.
Finding an office is probably the most crucial step you must take when thinking of setting up a business in Hong Kong. If you do not have a business office, you will not run your business to its full potential. An office will also provide you with an area where you can conduct your business. Offices usually come fully furnished and come complete with an internet connection and other required equipment.
Setting up your business – this will involve contacting all the necessary government departments, local economic development bureaus, and other agencies for information on the type of business you wish to start. Once you have all the relevant information at hand, you can begin writing business plans and discussing business strategies with your chosen partners. The services offered by the partners vary depending on the nature of the products and services provided. You may need to open a bank account, get a business license, and set up a trading company if you wish to trade in foreign currencies.