So, now that we have managed to successfully set up a legal entity in Hong Kong, what do we do next? I would like to go over some basics by dividing up this section into two main categories: (1) The legal/obligatory things you are required to take care of, and (2) The marketing aspect of things (mainly online marketing).
Legal and Obligatory Items
Now that you have your business in “official” standing, you should set up a corporate bank account. All major banks like HSBC, Standard Chartered, and DBS will have this so either give them a call or visit their branch and speak to a representative. Setting up an account is free but there will usually be a minimum deposit you need to maintain if you do not want to pay for maintenance charges (charges differ from company to company). Quick tip: Getting a credit card attached to your bank account will simplify your paper work as you won’t have to claim your expenses and reimbursing yourself.
You will be responsible for maintaining/renewing your business registration. The IRD (Inland Revenue Department) will send you a letter including the updated business registration every year so do not forget to pay for the fees. Failing to do this can lead to penalties.
Depending on the type of business you are running, you may be required to apply and maintain a license before operating. For example, Finance and Food & Beverage businesses will need separate licenses to operate in Hong Kong. Make sure you are on top of this to avoid problems. I will include a link at the bottom of this post that will go into more details of this. Please note that the amount of time it takes to get a license will vary greatly.
Accounting and Auditing
No matter how small your business is (even if it is not profitable), you are required to keep records of your accounting. You are also required to be audited annually. Therefore, start shopping around for individuals/companies that can do this for you. Prices will vary drastically depending on your company’s size, the amount of transactions, etc. This can be anywhere between a few thousand HKD to millions. You will then need to complete and submit a profits tax return regardless of whether you were profitable or not.
This includes setting up and maintaining MPFs (Mandatory Provident Fund) as an employer, labor legislations, and equal opportunities for employment.
If you are interested in further details regarding your legal obligations when setting up a business, I suggest you checking out the government website.
If you are like me, you will find that the “paper-work” aspect of setting up a business tedious and quite frankly, boring. So, in our next post I will want to go into something more interesting: Marketing! (Link to next post about marketing)
We believe that marketing is one of the most important aspects of a business. One can have the greatest product in the world but without the proper visibility no one will know about this product. Assuming that you have an excellent product or service, let’s take a look at the common marketing options in our next post.