Starting a small business in Hong Kong is an exciting adventure that can give the entrepreneur immense satisfaction and exhilaration. The city offers a wide range of benefits that attract people to set up their enterprises. The following uses of starting a small business in Hong Kong are enumerated to assist entrepreneurs in making an informed decision on whether to opt for this type of establishment.
The first advantage is that business owners need not get formal business registration for starting a small business in Hong Kong. All that is required is the operation of a commercial vehicle, including a registration number. Business owners have three years to pass a series of tests, including one on business laws. It will ensure that they have a thorough understanding of local requirements for obtaining business licenses and other relevant permits.
Second, tax benefits will be readily available to small business owners who elect for a company formation in Hong Kong. Hong Kong taxes are low at approximately one percent above that of mainland China. The exemption is provided for income from source areas, capital gains, corporate tax, retail trade, and property to rent. Thus, it is easy for entrepreneurs to lower their taxable income without sacrificing too much income tax. Company formation in Hong Kong does not require a head office, which means that tax could be deferred until distribution.
Besides, company formation in Hong Kong does not require the payment of income taxes on company profits. That is an attractive offer that attracts many people to start their own companies. After that, they will be required to pay taxes only on income from company activity. Compensating wages and other employee expenses is also a straightforward procedure in company formation in Hong Kong. Thus, the company’s accounts would remain clean and void of any tax liabilities.
Third, registering a business in Hong Kong does not require you to have a license to operate a small business. You only need to comply with the basic requirements of the Basic Laws of Hong Kong (which include paying taxes) and receive a certificate of registration. Furthermore, business owners can enjoy many professional and business opportunities in the world’s financial hub through the Hong Kong government. Thus, starting a small business in Hong Kong is very economical and comfortable.
But just because a business registration in Hong Kong is simple does not mean that it is easy to operate your business. There are still things to be done after registration. It would help if you appointed the company secretary and accountant. You also need to register the business under the Companies Act or the Companies Registration Act.
Moreover, you must submit annual reports and financial and management papers. Failure to comply with these requirements may result in prosecution. If you want to expand your business, you must acquire additional permits from the government. The Small Business Administration will provide you with the necessary assistance for this task. These are just the basic requirements. There are other requirements such as the deposit of an amount equivalent to the business’s capital value, which the company will use as operating capital.
There are many more things to consider when starting a small business in Hong Kong. However, these are the most critical aspects. Hong Kong has made it easy for business owners to create their own company. All you need is to follow the rules and regulations of the local government. Do not forget to apply for the business license and registration.