Factors to Consider when Forming a Company in Hong Kong and China
Company formation entails the legal incorporation of a business as a limited company. Limited companies that have their rights, responsibilities, and liabilities are viewed as individuals by the law. There is a separation between incorporated business and their owners regarding finances, assets and liabilities. The main goal of registering a limited company is to lower the financial responsibilities of the owner. Business people in Hong Kong and China acquire many benefits. Since many foreigners from all over the world have learnt about these advantages, they have decided to start businesses here. Here are some of the factors that you need to consider when you are starting a company in Hong Kong and China.
It is important to decide on the type of company you intend to start. Hong Kong provides a variety of business options for foreigners. There are WFOE and Hong Kong companies which you can choose when you want to do business in the mainland. Unique advantages and disadvantages face every business type. You will be able to make the right business decision once you have exhausted all the available options.
The location of your business will greatly determine how successful it will be. Just like every other country, China has places that are known to be good business locations. It is good to look for a city whose advantages and disadvantages you can handle. You are required to do your homework about the different locations and the treatment that foreign companies receive from the local government. Having a business in Hong Kong may be a better decision. The process of setting up businesses in Hong Kong is known to be less tedious.
You are required to look at the tax rates of the cities where you are thinking of starting a business. Taxation varies depending on the type of company you have decided to register. It is advisable to be well aware of the tax rates of different cities. Business people often consider setting up their business in China due to the low individual and corporate taxes. Every business person is required to have a corporate bank account. You have to decide between setting up an account in a local or international bank.
You need to make sure that you comply with the law of the country. You should only set up a business that is in line with the laws. At times it is hard to tell the corporate legal laws in China since they are first published in Chinese. It may be advantageous to consult a local expert or lawyer when starting up a business in this country.