AsiaBS
Success Story
Company Formation
such as BVI, Samoa etc.
Company Parking
Service in Hong Kong
Service in China
Using Hong Kong Company
Using Hong Kong HSBC bank account
about Taxation
No tax in Hong Kong - Offshore operation tax exemption
about Transaction
about Trading
about China market
Using Hong Kong HSBC bank account
Enjoying largest benefit - using Hong Kong company as stepping stone
Background
- Mr. A is from USA with USA company "USA Ltd";
- Business nature is about management consulting;
- His business activity with China include :
- invest in China to setup Wholly Foreign Owned Enterprise (WFOE);
- sell service to China clients;
- Mr. A forms a Hong Kong company "H Ltd";
- using H Ltd as investor in China to setup the WFOE;
- and using H Ltd to sign service contract with China client;
- setting up WFOE
- Disclosing less information to China government
- Originally, need to provide information of USA Ltd to China government;
- Now, just need to provide information of H Ltd;
- time to arrange document is shorter
- USA Ltd documents needs to be translated into Chinese and be certified by China Embassy;
- document from H Ltd is more ready for China use, and the certification process is more standard in Hong Kong - time and cost more under control;
- Disclosing less information to China government
- dividend from WFOE
- when China company earns profit and need to pay back to investor, withholding tax in China applies;
- if paying to USA Ltd, the rate is around 10%;
- if paying to H Ltd, the rate is around 5%;
- service fee from China client
- when China client needs to pay service fee to USA Ltd, withholding tax of 15% applies;
- when China client needs to pay service fee to H Ltd, withholding tax of 12% applies;
- Cost of setting up HK company = around HK$ 9,000;
- Cost of annual maintenance of HK company = around HK$ 20,000 (including accounting and audit fee);
- If China income is HK$ 670,000
- saving 3% of withholding tax (China related transaction) = HK$ 20,100
- the cost almost break-even of maintain the Hong Kong company.
