Important Tips for Forming a company in Hong Kong and China
Company formation entails the legal incorporation of a business as a limited company. Once it is formed, a company acquires its rights, responsibilities, and liabilities and is viewed as an individual by the law. Companies and their owners are separated concerning finances, assets, and liabilities. Having a limited company will help the owner to lower his financial responsibility. Owning a business in Hong Kong or China is a great move since you will gain a lot of benefits. Since many foreigners from all over the world have learnt about these advantages, they have decided to start businesses here. In this article, the things that you need to know before you form a company in China are highlighted.
You can only start a company when you know the type of company you want. There are a lot of business opportunities for foreigners who are thinking of setting up a company in Hong Kong. WFOE and Hong Kong companies can only be used by business located in the mainland. The advantages and disadvantages you will face will depend on the type of business you engage in. You will be able to make the right business decision once you have exhausted all the available options.
Another important factor is the location. Just like every other country, China has places that are known to be good business locations. You will face different pros and cons depending on the city you settle for. It is advisable to look into the treatment that every city receives from the local government. Having a business in Hong Kong may be a better decision. In comparison to the mainland, company formation in China is easier.
You need to check the taxation rates. The government of China has allowed every city to have its taxation rates. Each city and area has different taxation rates thus you need to pay attention to it. One of the advantages of setting up your business in China is that it has many cities that provide low individual tax and corporate tax rates. Every business person is required to have a corporate bank account. Business people in China are allowed to have accounts in international banks.
Every business person whether foreign or local is required to follow the law. When doing business in China, it is important to make sure that your business is in line with the set laws. The Chinese government makes it difficult for foreigners to understand new laws by publishing than in Chinese. Some local experts and lawyers will help you with the details of the company formation.