Individuals or companies planning to establish a business presence in Hong Kong can do so freely and in any way. However, the company must consider various factors that will influence future dealings and activities. Doing business will always include tapping both into opportunities and meeting business obligations.
This article outlines the various factors one should remember when doing business in Hong Kong. This guide will help clear out details and provide an insight into the advantages and challenges of doing business in Hong Kong.
Economy and Market
Hong Kong has reversed the effects and grown since the economic crisis in 1997. The dominant and sustainable industries that drive the economy into development include retail, logistics, business services, real estate, and tourism. If you want to participate in the ballooning opportunities in these sectors, you can invest in businesses within these fields.
Moreover, Hong Kong is a free port, making it an ideal place for doing business. Hong Kong does not levy custom tariffs and chargers, only minimal excise duties. It also puts policies to emphasize respect for property rights. These policies make Hong Kong a strategic platform for small and medium enterprises to do business in the region properly.
Preferential Access to Mainland China
Hong Kong is gaining more preferential access to the mainland. The Closer Economic Partnership Agreement (CEPA) provides Hong Kong products and companies preferential access to Mainland China’s market. This accord allows product trade between Hong Kong and the mainland have progressively reduced or zero tariffs. The CEPA boosts and allows for more efficient exports to China. Further, the agreement has increased foreign investment to avail of the free exports to China.
Records and Accounts
A Hong Kong Company must keep its registers of charges, members, directors, secretary, and minutes books. Together with the resolutions, the minutes will provide evidence that the stockholders or directors concurred on all corporate actions. These records are open for inspection by any member of the company without any charges.
Further, it is required to keep proper accounting records. The company directors can inspect these accounting records at any time. Additionally, the law requires the annual audit of these records. The company must endeavor to complete the audit within a sufficient time to allow members to timely receive copies of the financial statements.
Compliance Filings
In general, Hong Kong companies comply with three filings each year. The first one is the filing of the annual return with the Companies Registry. The company must file this return within 42 days of the company’s incorporation anniversary date. Secondly, the company must file an annual profits tax return with the Inland Revenue Department (IRD). The company must file the annual Form BIR 51, together with the company’s audited accounts. Lastly, the company must file the employer’s return in BIR56A and IR56 with the IRD.
Public Resources and Funds
Small and medium enterprises (SMEs) are given importance in Hong Kong. SMEs can avail themselves of various resources and funding from the government. One of the many resources Hong Kong SMEs can tap into is the SME Funding Scheme. In this scheme, qualifying SMEs can receive financial assistance from the Hong Kong Trade and Industry department. To be eligible for this assistance, the SME must be participating in export promotion activities and loan guarantees to other SMEs.
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