In the blink of an eye, it’s the beginning of a year again, which means you could start over to think about how to deploy your business plans, and at the same time, not to miss any local compliance duties that might affect your company’s operation, especially if you are a foreign entrepreneur. Ring a bell? Yes, don’t forget the principle “the earlier the better” - when it is talking about tailoring your own tax strategies and being well prepared to report your taxes to the Inland Revenue Department (IRD) on time in this year’s Apr, not too much time left honestly. 

** Commencing from the year of 2018/19 (i.e. on or after 1 April 2018), the HK profits tax rate will be reduced from 16.5% to 8.25% according to the newly proposed two-tier profits tax system. On this system, the tax rate for the first HK$2 million of profits is being halved to 8.25%, and 16.5% will be kept for profits exceeding that amount. Without a doubt, this new measure will provide huge tax relief to start-ups, SMEs and international entrepreneurs like you, provided that 8.25% is an extremely low profits tax rate among global market.

No clues yet on where to start? Let’s take a closer look at some of the basic TAX FILING & PLANNING areas that need your attention if you have a business in HK :
 

Get Familiar with the Compliance

There are 3 types of annual tax returns the IRD will issue to those entrepreneurs doing business in HK for more than 1 year since the date of incorporation: Employer’s Return, Profits Tax Return and Individual Tax Return. Different tax return has different kinds of compliance. Taking Employer’s Return as an example: there are several types of document you need to file for your employees compulsorily (e.g. completed BIR56A and IR56B - the Employers’ Return of Remuneration and Pensions Forms; completed IR6036B that is about remuneration paid to persons other than employees; etc.), for which you might feel dizzy when seeing all these requirements and a little nervous that some of them could be filled out incorrectly, and your tax return will get rejected at the worst case.

So yes, if you are not familiar with HK tax compliance, it can give you a real headache (although HK tax regime is rather simple, its documentation filing requirements are relatively rigorous due to the well-developed regulatory system). For you, it could be a stress-relieving assurance if all your tax filing duties are managed by a professional and experienced agency in HK with good reputation.

Accurateness & Effectiveness

Please keep this in mind: if your accounts and audit reports are not built properly from the beginning, it is not easy to further execute an effective tax efficiency plan in the financial reports when you start making good profits at a more matured stage. Some people might think they can just prepare some simple bookkeeping records by themselves for their businesses since they don’t have much resources - that’s a misconception indeed - provided that every HK business is required to submit audit reports to the Government every year in general, if the full set of accounts including Profit & Loss Accounts, Balance Sheet, General Ledger, Trial Balance, etc. is not available for the auditors to assess, they just can’t finish the auditing procedure, and nearly unable to give any advice on tax compliance strategy.
In fact, getting a reliable accounting service provider to help is not as hard (and expensive) as you think, simply check out the rate here to have an idea. After your accounts and audit reports are well arranged at an early stage, next you will be able to review the whole financial picture of your business in advance, and receive the tax computation information for fixing your financial strategies in the most tax-efficient manner.

Yet, not only we need to focus on financial accurateness and optimisation, timeframe is also one of the key elements. Given that you‘ll not want to face penalties or prosecution due to late submission of tax return (or so far without noticing it at all), some agencies will even send you reminders and related advice on your coming tax reporting date and you would never, ever miss the deadline! For those outstanding service providers that are capable of doing this, it would need years of battlefront experience or in-house accounting specialists to take care of their clients, case by case, from head to toe.

Tax Exemption for Offshore Company?

As one of the most flourishing market in the world, HK has adopted a lot of overseas investors. Some of them (including you??) might be running an offshore business while the operation does not really take place in HK. You may wonder how your company can be claimed as an ‘offshore business’ by the IRD and it will then be able to enjoy tax exemption? To put it simply, certain criteria need to be met to qualify for such definition, e.g. the terms of the purchase and sales contracts are completely negotiated and conducted with suppliers and customers outside HK; the service is performed in a place wholly outside HK; etc. Please click here for details of qualifying for ‘offshore claims’ submission, while one important key is to prove the profits are not liable to HK Profits Tax by proper planning at the initial stage.  

As seen, there are heaps of tax compliance issues that could be affecting your final tax reporting and optimisation result. Although different accounting & tax advisors have their own specialties, how do you know which one can be trusted? For newbies, trying to go for those with word of mouth, years of experience and a solid foundation might help. If you are still unsure how to start or execute the whole arrangement properly, simply send a private message to us today!

A New Era of Co-Working

Under the ever-changing market with rapid technology / e-commerce development, more and more people, especially the young creative generations are making good use of this chance to start a whole new business nowadays. But where to start? 

Co-working space now serves as an entry ticket along with a bunch of benefits for start-ups to  begin their entrepreneurial journey there :

Cost Efficiency

Cost is definitely one of the major concerns when it comes to forming a business. During the start-up stage of a business, most of the time you might not need a physical environment to achieve the tasks. Or you just need the office when you come to Hong Kong and work in it on a pay-as-you-use basis. Thus instead of carrying the burden of renting a sizable office that might not have much impact on your business, why not reorganize your resources and spend it on other development cost or supporting staff. And so, co-working space is undoubtedly a practical pick for start-ups.

Flexibility

To a newly set-up business, there could be many ad hoc tasks or incidents that require you to rearrange your schedule to work flexibly. Working at co-working space would allow you to come n’ go anytime as per your needs. You can even go pick up a cup of coffee or hit the gym whenever you need to be re-energized, then start your work again!

Networking

A mature co-working environment with periodic workshops provided is also famous for helping you expand your business and social network, and it is definitely a task worth spending time for start-ups. If the whole thing is well invested, you could have benefited from a diversified business network beyond imagination. The people you met could be just a friend or they could be a strong strategic alliance to your business and the relationship might turn into a mutual beneficial relationship eventually.

In some premier business centres, you can get all the help you need with their professional consultants specialized in accounting, tax reporting, payroll, working visa, China visa, etc. anytime, while free consultation will be extended to solve any of your instant queries. E.g. “What if I need to go China for Canton Fair next week, what type of visa should I apply for and how fast?” When you have these kinds of questions, just drop by the reception and the consultants will walk out and provide face-to-face advice to you to ease your burden timely.

Have you ever thought about how a Company Signage could enhance your business image? Or did you know a directory signage could help facilitate your official business applications to the government authorities? After reading this blog, you may just be surprised at how this simple tool does great things for your business!
 

Strengthen Company Image

A company signage set at the entrance of a premier business centre or building in HK could be one of the KEYS to outrun your competitor. Simply just imagine if you would like to acquire a service, when you arrive the building there is nowhere showing where the office is, you will probably turn away, and one business opportunity is most likely slipping away.

Another situation is that if you are about to engage in business with another start-up company, they gave you an address so you went up for a visit and tried to look into the directory signage, you found your possible partner’s company name was just not there, would you still have confidence in doing business with this firm? Maybe you will but from our experience, we have seen many visitors came in, stood in front of the directory signage board for a while and they left without a word. A company signage not only presents the quality of the services and products that builds up your company image, but also helps you avoid all the above awkward situations, especially if you are a foreign entrepreneur and people may wonder if you really have an office location in HK. By having a signage, it shows you have the absolute right to use the local registered address, for which most of our serviced office or virtual office clients have got one already.

Leverage Practical Functionality

When submitting applications to government departments or financial institutions, they always require a registered corporate correspondence address that proves your business presence in HK. Thus, your company directory signage will serve as a good proof in such applications like business license application, HK working visa application, bank account opening, etc.

A survey of FedEx once found during parcels or products delivery, people may get confused or even returned from the location when the company signage is omitted at the entrance, and eventually it cannot be sure whether the products are delivered to the right address. Therefore the reason why people registered for a company signage is not for maintaining their company image only but also trying to serve the basic and practical purposes such as ensuring they can send out as well as receive their business materials accurately and efficiently; and when the authorities come to visit their serviced office / virtual office / co-working space, a proper company signage at the entrance can easily project a good presence to represent the company and people are then able to locate it quickly.

Now at BRIDGES, by using our serviced office / virtual office /co-working space services, you can get your company directory signage handily for owning a prestigious presence at the CBD - Central, Hong Kong at HK$1,500 per annum, which means it’s just HK$125 (US$17) per month only!

Register here to kick off your New Year with a multi-functional signage.