If domestic customers are engaged in cross-border e-commerce business such as Amazon/Shopee, is it more advantageous to register a Hong Kong company than to register Amazon/or Shopee with a domestic company? Let us first understand, why do cross-border e-commerce companies basically register a Hong Kong company?
1. The development trend of cross-border e-commerce in China
Recently, iiMedia Research released the "2020 China Cross-border E-commerce Supply Chain Special Research Report". The report pointed out that with the development and expansion of the cross-border e-commerce industry, the demand for cross-border e-commerce supply chain services has also increased. Despite the short-term impact of the epidemic, under the long-term trend of economic recovery and consumption upgrades, the overall cross-border e-commerce market is still on the rise. iiMedia Research (iiMedia Consulting) predicts that China's overseas online shopping users will reach 158 million in 2020, and the imported cross-border e-commerce market is expected to exceed 3 trillion yuan in 2021.
With the rapid development of cross-border trade, for domestic sellers of cross-border e-commerce, foreign exchange receipts and payments have become a problem that everyone has to face. In practice, more and more sellers use offshore accounts to handle foreign exchange collections. If you want to have your own offshore account, registering a Hong Kong company will be a good choice.
The benefits of Hong Kong companies are not limited to opening offshore accounts. It is necessary to know that Hong Kong companies have their own unique location advantages and convenient conditions. For cross-border e-commerce sellers, it has very important strategic significance. Next, I will introduce to you how to use the advantages of Hong Kong companies as cross-border e-commerce.
2. Cross-border e-commerce tax payment
One of the important reasons why many sellers choose to register affiliates or subsidiaries in Hong Kong is that Hong Kong adopts the principle of territorial origin for taxation. That is to say, only profits originating in Hong Kong are subject to profits tax in Hong Kong at a rate of 16.5%, while profits originating elsewhere are not subject to profits tax in Hong Kong.
You must know that most cross-border e-commerce sellers set up companies in Hong Kong, and their cross-border e-commerce business that generates income actually takes place in Hong Kong.
Therefore, the business of cross-border e-commerce is very compatible with the regulations of offshore exemption from paying profits tax in Hong Kong. As a very good tax planning tool, sellers generally apply to the Hong Kong Inland Revenue Department for offshore exemption, so that they can not pay profits tax in Hong Kong. That is, some bosses mentioned that companies established in Hong Kong can "not pay income tax".
3. Seven reasons for registering a Hong Kong company for cross-border e-commerce
Low operating costs for Hong Kong companies
The cost of registering a Hong Kong company is much lower than registering other offshore companies. Hong Kong allows shell companies to exist without leasing an office in Hong Kong. The maintenance of the Hong Kong company is simple and the cost is extremely low.
Freedom to receive foreign exchange
Foreign exchange collection is the most important point for the majority of cross-border e-commerce sellers. As an offshore company, Hong Kong companies are allowed to conduct offshore business operations in the mainland. They can operate through offshore bank accounts. Exchange and transfer, very convenient.
Convenient tax policy
Since there are no industry restrictions, Hong Kong companies have created unlimited possibilities for conducting business in the e-commerce industry. The most important thing is that there are few corporate taxes in Hong Kong, only profits tax and salaries tax. At the same time, Hong Kong is a transit port, which can save a lot of tax costs for cross-border e-commerce companies.
Convenient domestic stocking
As a free international trade port, Hong Kong has free and convenient logistics in and out, and no customs duties are levied on the in and out of general goods, so it has unique advantages in warehousing. Moreover, in cross-border e-commerce, it is indispensable to import and export goods from abroad. In addition, Hong Kong is very close to Shenzhen in terms of geographical advantages, so it can play a role in facilitating domestic stocking.
E-commerce returns are convenient
Many sellers and friends must have experienced the situation of returning goods. This is an inevitable phenomenon in cross-border e-commerce. If this happens, it is not only time-consuming and labor-intensive to return the goods to foreign countries and then ship them back. Therefore, cross-border e-commerce sellers today Generally choose to retreat in Hong Kong. Moreover, domestic and foreign suppliers can also directly ship the goods to Hong Kong, which is convenient for return and exchange operations.
Well-known in Hong Kong
When it comes to cooperation with foreign companies, many foreign suppliers may not know a certain domestic trading port, but they will not be ignorant of Hong Kong. Taking advantage of Hong Kong's popularity, creating Hong Kong brands, enhancing the company's international image, increasing product prices, obtaining more profitable.
Integrate e-commerce supply chain
Sellers can take advantage of Hong Kong’s free port to use Hong Kong as a transit port for cross-border e-commerce, collect domestic and foreign goods for inventory management, and send products to target markets according to customer orders, which can integrate e-commerce as a whole. The upstream and downstream supply chains can not only facilitate management, but also reduce the warehousing and logistics costs of enterprises.
4. Which overseas banks can open overseas company accounts?
Open a Singapore Bank Corporate Account: Remote Video Account Opening
Open a mainland offshore corporate account: Currently, there are many NRA accounts that can be opened;
Opening a Hong Kong bank corporate account: At present, Hong Kong has not yet cleared customs, and some banks in Hong Kong can open accounts remotely;
Open a corporate account with a bank in Taiwan: some banks in Taiwan can open a company account remotely;
Open a corporate account with a U.S. bank: open a company account via remote video. Some U.S. banks have simple requirements for opening an account, such as: East West Bank;
Swiss CIM bank account: Open a Swiss CIM company account and personal account via remote video;
Five, the 10 advantages of Hong Kong company registration:
1. The name of the registered Hong Kong company is free to choose, and the company name is allowed to contain regional and industry nature.
2. There is no foreign exchange control, and the free entry and exit of funds and profits is not restricted.
3. After the company is established, bank accounts can be opened around the world.
4. Hong Kong has a low tax rate. If you do not operate business locally, you can be exempt from any tax, and you can properly arrange tax to avoid tax reasonably and legally.
5. The limited company has statutory documents to protect the rights and interests of each shareholder (investor), so it is easy to collect funds
6. Buying and selling properties in the name of a limited company can avoid the tax bureau to investigate the source of funds for individuals buying and selling properties.
7. After the establishment of the company, Chinese, Taiwanese and foreigners who apply for business visas to Hong Kong from the Immigration Department will be given priority.
8. The limited liability of the limited company, the risk of operating the business, will not involve the private property and property of the shareholders.
9. Hong Kong companies are allowed to have no business, and shell companies are allowed to exist. Hong Kong company registration does not require capital verification, and the registered capital can be arbitrarily increased, but the funds in place are not limited; the company's business scope is very limited, and there is no special industry. Colleges, exchange centers, research institutes, media groups, publishing houses, magazines, associations, joint ventures Conference, production, shipping agency, cosmetics, medicine, auction, group, import and export, college, food, etc. can be registered and operated.
10. Operating business as a limited company can give customers, bankers, and suppliers a good impression, increase confidence, and help business development.
6. Advantages of opening a personal account in Hong Kong:
(1) There are no restrictions on foreign exchange receipts and payments (personal SOHO, e-commerce foreign exchange receipts)
(2) Convenience of overseas investment
(3) It can be used to purchase personal insurance, wealth management products or Hong Kong stocks.
Seven, the advantages of opening a Hong Kong company account:
(1) It is relatively simple to open a Hong Kong bank corporate account
(2) Hong Kong has few taxes (high international brand awareness)
(3) There are no restrictions on foreign exchange receipts and payments (various currencies are freely convertible)
(4) Convenient account operation (direct online banking transactions)
(5) Exemption from interest tax, the actual income of deposits is higher