The implementation of the “Belt and Road Initiative” policy has a huge impact on most domestic provinces (municipalities), but opportunities often bring risks and competition. So from the perspective of Hong Kong ’s business, what are the conditions and considerations for doing business in Hong Kong for the Belt and Road Initiative?
Conditions for doing business in the Belt and Road in Hong Kong
As a Special Administrative Region of China, Hong Kong has world-renowned financial, trading and business centers. Although Hong Kong’s investment mechanism and local trade mechanism both advocate free trade and free investment, as a Hong Kong business unit, there are still many risks.
For example, Hong Kong companies pay income tax in China and profits tax in Hong Kong, which results in double-sided and confusing tax payments. Therefore, doing business in Hong Kong needs to pay special attention to the profits tax paid locally in Hong Kong to avoid unnecessary losses and confusion in the company’s financial analysis.
1. Familiar with Hong Kong’s local tax standards:
Since 2018, Hong Kong has adjusted the profits tax rate. Hong Kong has implemented a two-tier system:
The net profit of the profits tax levy standard implemented since 2018 will reduce the levy tax, while the excess net profit will be taxed at different rates. There will also be differences in tax rates for partnerships and sole proprietorships. Tax companies paying taxes and wholly-owned enterprises operated by unincorporated people can save up to a large amount each year.
The new R & D tax deduction award is a certain amount of overhead tax deduction.
2. Familiar with customs and excise duties:
1). As an international free trade metropolis, Hong Kong only charges a small part of the import and export duties and taxes. For example tobacco and alcohol industry.
Generally, the entry of goods requires commodity documents and freight bills, but import tax bills or consular invoices are not required, except for individual ones. Different industries have different products, and relevant files for products in this industry are required.
3). For Hong Kong import and export goods, general export goods are exported by the license. Export restrictions are based on the requirements of the exporting country or region and require different international agreements and safe public health and safety standards.
3. Understand Hong Kong patent rights:
Hong Kong was approved by the Legislative Council on May 28, 1997. The new “Patent System” was implemented on June 27. The newly formulated system requires:
To obtain a standard patent, the following conditions must be met: First, the applicant should apply for its invention to a designated patent office, and apply to the Hong Kong Intellectual Property Department Registry for records within 6 months after the application is published by the designated patent office. The registry shall record and publish it after a formal examination, and the application shall choose a later date. The standard patent protection period is 20 years, counting from the date of application by the designated patent office.
(2). The new system provides for the protection of short-term patents. The purpose of establishing short-term patents is to protect inventions with only short-term commercial value and enable applicants to obtain patent rights as soon as possible.
When submitting a short-term patent application, the applicant should also submit a search report on the patent made by the prescribed search agency. Short-term patents are valid for 4 years and can be renewed for 4 years, counting from the filing date or priority date. For example, if the application is made on March 18th, 2020, the short-term patent right ends on March 17th-18th, 2024.
4. Know about Hong Kong-registered companies
The requirements for a Hong Kong-registered company are similar to those in China, but there are some differences like the business and company name requirements.
5. Understand opening a corporate bank account in Hong Kong.
(1). Existing company-related contract documents (such as purchase list details, external sales contracts.
(2). The company’s bank flow and bill details of the public account in the past three months.
(3). Transport order.
(4). Hong Kong company registration information (there may be no business in Hong Kong).
(5). Business license of the company.
To open a Hong Kong public account, you need to pay attention: the company needs to be a Hong Kong company, submit the relevant materials to the local bank in Hong Kong, and after the bank has approved it, make an appointment to open a Hong Kong corporate bank account.
Things to note when doing business in Hong Kong
1). Know the company registered in Hong Kong and the relevant documents required;
2). Doing business in Hong Kong needs to pay attention to local tax standards and the personal income tax collection standards required by corporate employees;
3). Doing business in Hong Kong needs to distinguish between the domestic registration of the company in which it is located or the Hong Kong registration. After all, Hong Kong and domestic companies levy corporate profits tax (income tax) are not the same, you need to be careful not to be confused;
4). Doing business in Hong Kong needs to pay attention to the levy standards of customs duties and excise taxes, to avoid mistakes and cause corporate property losses;
5). Doing business in Hong Kong also needs to pay attention to patent rights, and the companies that you work in need to apply for related patent rights in advance to avoid malicious competition from related competitors and steal your company’s products;
6). Doing business in Hong Kong also needs to pay attention to domestic (except Hong Kong, Macao, and Taiwan) personnel, Hong Kong and Macau Pass work visa time, if employees Hong Kong and Macau Pass expiring soon, staff should be required to apply for Hong Kong and Macau Pass visa extension in advance to avoid employee misrepresentation loss of business fines due to work visa time.
Conclusion
After reading so much information above, have you learned more about doing business in Hong Kong? You can learn about this information in many ways so that you can better understand the development of Hong Kong.