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Tel：+86 400 118 5939There are many taxes for domestic companies, which is a significant expense for small businesses and individuals. Even if the company is not operating, it has no income and has to pay various taxes every month, such as business tax, stamp duty, etc. Even if the company goes bankrupt, it still has to pay cancellation fees and collect stamp duty based on the registered capital of the company.
Hong Kong companies are subject to source tax and do not involve on-site operations, so they do not need to pay any taxes (reasonable tax avoidance for Hong Kong companies). Therefore, it is necessary to open a Hong Kong company to avoid taxes. The tax avoidance referred to here is reasonable tax avoidance, not tax evasion, so there is no legal risk.
Legitimate and reasonable tax avoidance requires profound tax knowledge, the ability to identify loopholes in tax laws, and the ability to design reasonable tax avoidance plans. Here, Hongyuan International Consulting briefly lists several common practices:
1. Using a Hong Kong bank account applied by a Hong Kong company, the company account can receive foreign exchange without restrictions. If there are no Hong Kong customers, there will be no tax. The company can apply for it without tax because Hong Kong's policy is "regional source taxation".
2. If you have a company in mainland China, you can use the name of the Hong Kong company to negotiate business and receive remittances through the Hong Kong company account, so that there will be no business tax incurred.
3. For those engaged in trade exports, using Hong Kong companies can obtain the intermediate price difference, which is also tax-free in offshore companies.
4. Many companies usually operate in this way: after registering a Hong Kong company, they use the name of the Hong Kong company to receive orders from overseas customers. Assuming the order is USD 100000, they place an order with a domestic factory for production and export. Assuming it is USD 70000, the customer can transfer the funds to the Hong Kong company's account, and then transfer the cost of USD 70000 back to the domestic factory for verification. The Hong Kong company has earned a profit of USD 30000 on its own. Therefore, as long as the profit earned by the Hong Kong company does not come from Hong Kong, it can be reasonably exempted from taxes and does not need to pay profits tax to the Hong Kong government.
Reasonable tax avoidance is quite important for the long-term healthy development of a company, which shows how important tax avoidance is. But the prerequisite is to register a Hong Kong company. As long as you make good use of the Hong Kong company and understand the different reasonable tax avoidance policies between mainland China and Hong Kong, achieving reasonable tax avoidance will be very simple.
For more questions about registering a Hong Kong company, you can consult Hongyuan International.
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