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Tel：+86 400 118 5939In China, enterprises have to pay a significant amount of deposit every year, which accounts for a large part of their costs. Therefore, for enterprises, it is necessary to do a good job in tax planning and save expenses. Therefore, there is an important reason for mainland entrepreneurs to register Hong Kong companies, which is to conduct reasonable tax planning through registering Hong Kong companies, reduce corporate tax costs, and make Hong Kong companies a good tax planning tool. So how to carry out tax planning to achieve the goal of reducing tax and fee pressure?
Mainly through the following three ways:
One is price transfer. By registering a Hong Kong company, profits can be kept in low tax areas.
The specific operation can be as follows: Mainland enterprises first sell the products they originally intended to export to their own Hong Kong companies at a price deemed reasonable by the domestic tax bureau. Usually, the price only needs to be slightly higher than the cost. Then, they let the Hong Kong companies sell to overseas customers at the agreed price. This reduces domestic income and profits, and correspondingly reduces the amount of taxes paid. The profits mainly stay with the Hong Kong companies. This is called price transfer. The profit tax rate in Hong Kong is 17.5%, which is relatively low. After establishing a Hong Kong company, there is no need to appoint any employees to work in Hong Kong, and therefore, there is no need to pay Hong Kong salaries tax. Therefore, utilizing Hong Kong companies for overseas trade can save a considerable amount of costs.
The second is to enjoy policy incentives in the name of Hong Kong capital.
For mainland enterprises that mainly rely on imports, it is possible to consider establishing a Hong Kong company and then acquiring the original factory under the name of a Hong Kong funded enterprise, turning it into a material processing plant held by Hong Kong funded enterprises, thereby enjoying many tax reduction and preferential policies in mainland China, such as exemption from tax and value-added tax on imported self use equipment.
The third is to reduce the cost of purchasing raw materials.
Currently, most mainland enterprises import raw materials on behalf of import and export trading companies, which adds several intermediate links and naturally increases costs. After registering a Hong Kong company, one can fully purchase raw materials on their own. Through the above operations, the goal of reducing tax burden and lowering costs can be achieved. The operation method is simple, and the most important thing is that the process of establishing a Hong Kong company is also very simple. Through a professional registration agency, it is faster and safer to handle.
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