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. Companies and their owners are separated concerning finances, assets, and liabilities. The main goal of registering a limited company is to lower the financial responsibilities of the owner. Owning a business in Hong Kong or China is a great move since you will gain a lot of benefits. Many foreigners are attracted by this, and they go to these places to try out their luck. Here are some of the factors that you need to consider when you are starting a company in Hong Kong and China.
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. There are WFOE and Hong Kong companies which you can choose when you want to do business in the mainland. Depending on the business type, you will face a unique set of advantages and disadvantages. As a result, prospective business owners need to weigh their options before making their decisions.
It is important to make sure that your business is in the right location. There are cities that are known to be best locations for businesses in China. You will face different pros and cons depending on the city you settle for. You should only start your company once you are aware of the treatment the local government is likely to give your business. Having a business in Hong Kong may be a better decision. It is advantageous since the procedure of registering a business is less complicated.
You need to check the taxation rates. 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. 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. There is no limitation on what bank you need to use.
You need to make sure that you comply with the law of the country. 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. It may be advantageous to consult a local expert or lawyer when starting up a business in this country.