What You Need to Know Before You Form a Company in Hong Kong or 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. There is a separation between incorporated business and their owners regarding finances, assets and liabilities. When forming a limited company, business owners aim to lower their financial responsibilities. Starting and running a business in Hong Kong and China has a lot of businesses. 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. For those wishing to carry out their business in the mainland, there are WFOE and Hong Kong companies. The advantages and disadvantages you will face will depend on the type of business you engage in. It is important to look at all the available options before you decide on the type of business venture you want to take up.
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. 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. Business owners can go for the options of setting business in the offshore such as Hong Kong other than the mainland. The process of setting up businesses in Hong Kong is known to be less tedious.
Another important feature to consider is the taxation rates. In China, every city has its taxation rates. Each city and area has different taxation rates thus you need to pay attention to it. You will be greatly advantaged by the low tax rates of different cities in China. 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 never be swayed to set up illegal business just because you are in a foreign country. At times it is hard to tell the corporate legal laws in China since they are first published in Chinese. Some local experts and lawyers will help you with the details of the company formation.
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