Factors to Consider when Forming a Company in Hong Kong and China
The process your business as a limited company is called company formation. Limited companies that have their rights, responsibilities, and liabilities are viewed as individuals by the law. A business owner will never be called upon to repay the debts of his or her company. 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. In this article, the things that you need to know before you form a company in China are highlighted.
You need to decide on the type of China company you want to create. There are a lot of business opportunities for foreigners who are thinking of setting up a company in Hong Kong. For those wishing to carry out their business in the mainland, there are WFOE and Hong Kong companies. Depending on the business type, you will face a unique set of advantages and disadvantages. You will be able to make the right business decision once you have exhausted all the available options.
Another important factor is the location. There are cities that are known to be best locations for businesses in China. Every city has its advantages and disadvantages. It is advisable to look into the treatment that every city receives from the local government. Business owners can go for the options of setting business in the offshore such as Hong Kong other than the mainland. In comparison to the mainland, company formation in China is easier.
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. 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. Before setting up a business in China, you need 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. You should never be swayed to set up illegal business just because you are in a foreign country. You may at times need an interpreter to help you read new laws since they are mostly published in Chinese. When setting up a business where you are advised to have local experts or lawyers to help you with the details.