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+86 400 118 5939
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Tel：+86 400 118 5939The client is an enterprise engaged in cross-border trade of electronic components: 🏭 The Hong Kong company has an annual sales revenue of over HKD 100 million and fully controls a mainland subsidiary with an annual revenue of approximately RMB 200 million and 300 employees. 👤 The founder personally holds equity in the Hong Kong company.
⚠️ 2、 Core pain pointsUnder the original structure, the Hong Kong company controlled the mainland subsidiary, forming a "group structure", and was required to prepare consolidated financial statements and audit them in accordance with the Companies Ordinance. Due to the total revenue and number of employees of the group exceeding the exemption standards for small and medium-sized enterprise financial reports, a comprehensive disclosure version audit must be adopted, resulting in: ⏳ The audit process is complex and time-consuming; 💰 High cost; 🔒 Individual shareholding lacks privacy and flexibility in asset inheritance.
🛠️ 3、 Optimization plan: BVI Hong Kong dual layer architectureWe have designed a restructuring plan for our clients with BVI companies as the controlling entity, balancing compliance and flexibility
🏗️ Restructuring: The founder establishes a BVI company to hold equity in the Hong Kong company, while the Hong Kong company continues to control the mainland subsidiary as a business entity
📊 Audit optimization: After the restructuring, BVI companies will become overseas entities and will not be included in the scope of consolidation audit under the Hong Kong Companies Ordinance. Hong Kong companies can be independently audited and continue to apply private enterprise financial reporting standards, simplifying disclosure
🧾 Tax support: Hong Kong companies declare profits tax as independent entities and enjoy a two-tier tax rate (8.25%/16.5%). They can apply for offshore profit exemption based on regional taxation principles
🏆 4、 Implementation results:✅ Audit costs have decreased by 40%, and report issuance time has been reduced by about half ✅ Compliance enhancement: Hong Kong companies are required to file independent tax returns, while BVI companies only need to file annual returns, in compliance with the BVI Economic Substance Act ✅ Privacy and Inheritance Optimization: Non disclosure of BVI shareholder information is beneficial for founder asset protection and future capital operations ✅ Risk isolation: Trade business risks are limited to the Hong Kong level, and top-level assets are safer
💬 Customer feedbackThe original group audit was extremely cumbersome. After the restructuring, auditing and reporting have been greatly simplified, providing greater space for future financing and equity planning. "- Financial Director of an electronic trading group
⚖️ Compliance Basis📚 Article 359 of the Hong Kong Companies Ordinance: Exemption from merger audits for non Hong Kong groups 📚 BVI Business Companies Act: Holding companies are exempt from auditing 📚 Article 14 of the Hong Kong Inland Revenue Ordinance: Principle of Independent Declaration of Profits Tax
🚀 ConclusionIf your company also faces issues such as merger audit burden, unclear structure, or low tax efficiency, our expert team can tailor cross-border compliance and architecture optimization solutions for you.
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Email: info@hyintern.com
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