Help creating a Hong Kong subsidiary

The easiest way to set up a Hong Kong corporation, is to buy a "off-the-shelf" corporation. Any CPA firm should be able to set a the corp or hook you up with companies that can provide the service.

Be cognizant that HK is not like the US. Most companies require audit for simply tax returns. You also need annual filing forms as to whether the parent company's officers are getting remuneration from their HK entities.

Companies that buy and sell in HK but do not have US supervision can in some cases not be subject to US taxes or a have a deferred US tax arrangement, meaning the income is subject to US taxes only upon repatriation. Speak to your accountant about this.

This is an accounting firm in HK that does this. they also speak english.

Ms Jennifer C. K. Leung
Direct Line : 2528 9292
Email : [email protected]

Ms Regine W. W. Luk
Direct Line : 2528 9290
Email : [email protected]

Ms Pecky L. W. Leung
Direct Line: 2528 9291
Email: [email protected]

HONG KONG:
Address: 2nd Floor, Jonsim Place,
228 Queen’s Road East, Wanchai, Hong Kong

Tel: (852) 2528 9298
Fax: (852) 2527 8710 / 2866 61

I attended a "road show" in Munich held by the HK Government regarding investment in the HKSAR.

The description of services found in all their literature states:

"Invest Hong Kong is the department of the Hong Kong Special Admnistrative Region (HKSAR) Government responsible for Foreign Direct Investment, supporting overseas and Mainland businesses to set up and expand in Hong Kong. We provide free advice and customised services to help your business succeed in out vibrant economy."

They can be reached at:

Invest HK
25/F, Fairmont House
8 Cotton Tree Drive
Central
Hong Kong

+852 3107 1000

[email protected]
www.investhk.gov.hk

I am based in Palo Alto and work for a company that helps US companies expand globally - CCW Business Solutions, part of Crowe Horwath International.

Setting up in Hong Kong is relatively straightforward. No significant capital required and set up time is quite quick. Establishing a subsidiary is a good plan if your intention is to undertake sales and support work as you will be able to structure it in a way that doesn't expose the US parent to trading and employment liability. Depending on your profitability here in the US you might want to consider booking all revenues arising from HK activity in the books of the US to use up your NOLs and compensating the HK sub on a cost-plus basis. If you are profitable in the US, HK's low tax rates might make it more attractive to book revenues from HK activity over there.

Employees will need to be hired under local labor law which is again not too onerous. You will need to set up a provident fund for the local HK hires. Expats should be exempt. If you plan to send foreign nationals your subsidiary will be able to act as the sponsor for their visas.

The subsidiary will have a requirement to prepare and file annual financial statements together with a tax return. Payroll returns (IR56A etc) will also need to be filed.

I would be happy to connect with you to discuss further if you require assistance and can be contacted at [email protected] (despite being based in Palo Alto, CA).