What are the advantages in setting up a foreign company in HK vs BVI? (in terms of maintenance fee, setup cost and tax). The purpose is to import/export from China, and I was told that it's better to have an BVI company setup first, so one can take advantage of taxes, then when needed, setup a company in China just for import purpose only (as one needs to issue invoices). Is this the best approach?

Thank you in advance for any comments/suggestions.

BVI is slightly cheaper in terms of incorporation costs, annual maintenance fees, BVI companies don't need a local corporate secretary, no annual return or audit of financial statements by certified third parties etc. However if you plan to set up a company or rep office in China later on Hong Kong is in my opinion the best choice.

That's what I plan on doing in the next few weeks. I am going to be opening a HK limited company because I feel it's the best option out there right now. From my knowledge, as long as I don't do any business in HK, my limited company wouldn't have to pay any corporate tax, only personal income tax in China. Can't go wrong there!

Thanks for your prompt reply. Could you please give me an estimate on how much is the cost to setup a company in HK, if you don't do business in HK, do you still have to pay maintenance fee (an accountant to file tax return every year, for instance)? I live in Zhuhai, close to HK, is it complicate/time consuming to setup the company yourself? How much they charge to set it up for you?

I am happy with my agent there in HK who takes care of several of our HK holding companies. Cost me about 1500 usd to set it up and about 6000 hkd for yearly maintenance (I am told by others its quite cheap). Setup with agent is extremely easy. Setup by yourself shouldnt be very complicated either but much more time consuming - depends on much you value your own time. If need agent contact let me know.

Cambronne,

I think you are overpaid to set up the HK company. I am opening one soon for the price of 4500RMB and add an additional 1000RMB or so for their help in setting up a bank account. I am planning on using a company called "Wisebank". I feel he is very knowledgable about things. Believe me, I have asked this guy a TON of questions, and he came back with great answers. I am surprised he still has patience in dealing with me. haha Anyone else ever use Wisebank for opening a HK account?

rgeczi8 wrote:Cambronne,

I think you are overpaid to set up the HK company. I am opening one soon for the price of 4500RMB and add an additional 1000RMB or so for their help in setting up a bank account. I am planning on using a company called "Wisebank". I feel he is very knowledgable about things. Believe me, I have asked this guy a TON of questions, and he came back with great answers. I am surprised he still has patience in dealing with me. haha Anyone else ever use Wisebank for opening a HK account?

You don't need to use a company to open a bank account. With your corporate documents you just need to set up an appointment with your selected bank and go there to do the account opening procedures.

rabbit51 wrote:Thanks for your prompt reply. Could you please give me an estimate on how much is the cost to setup a company in HK, if you don't do business in HK, do you still have to pay maintenance fee (an accountant to file tax return every year, for instance)? I live in Zhuhai, close to HK, is it complicate/time consuming to setup the company yourself? How much they charge to set it up for you?

We do at USD1,200 , this include everything (one year corporate secretary, registered address, virtual office, CPA-certified copies of incorporation documents that you will need for account opening etc.). PM me or visit the site in the signature for further information.

To do it yourself you can google for the address of the relevant departments in charge of incorporation in Hong Kong, however you will still need to find a company to serve as secretary, provide registered address, one year virtual office (to forward you the bank statements), an attorney to certify the copies of the incorporation documents prior to visiting the bank etc.

I think you are overpaid to set up the HK company. I am opening one soon for the price of 4500RMB and add an additional 1000RMB or so for their help in setting up a bank account. I am planning on using a company called "Wisebank". I feel he is very knowledgable about things. Believe me, I have asked this guy a TON of questions, and he came back with great answers. I am surprised he still has patience in dealing with me. haha Anyone else ever use Wisebank for opening a HK account?

Well done rgeczi8
I have done one company with Wisebank 2 years ago, and trust me , Mr Ivan Chan is really a very experienced guy, and like you said a very patient one.
For 1000 rmb , more, he also handled for me the opening account in Hangseng bank...and he even helped to push Hangseng to open my trade services account by distance...He is a great guy, and his business increased a lot (he just moved his office in HK because of too much business).
So good that another offshore company that I had for the last 12 years (settled originally in Taiwan) , I also moved the adress with him and let him renew the registration every year, this for the third year in a row.
I have no any interest or connection with Ivan Chan , except that he is a great guy and a good friend.

To the OP: rabbit51: the main reason to choose HK vs BVI is : CUSTOMERS
I dont know where you are going to export but trust me...for your customers, the first delivery they will get with a supplier incorporated in BVI, they will get the IRS or the taxman of their country on their back.
In France, BVI, Cayman Islands...etc..it sounds directly like Tax haven, cheating taxes, murky money deals...
In my knowledge, most companies using BVI do so when they go public (check lots of public companies on the HK stock exchange) or when they are manufacturers (for example Master Kang instant noodles has the main legal entity in Cayman Islands).
For a small export operation, and buying from China, no other choice : set up in HK.

In taxation language, what you are going to do is called Triangular business: i.e you buy from china, you sell to a third country, and you get the payment (and process the payment to your supplier) all from HK, so no tax .
Once in a while, the HK governement may pick up your company for a check audit (I got one 2 years ago) , but as long as you have a reasonable volume of business and a "reasonable" profit, they wont bother you.
Hence , if you have too big business, then you better set up several HK offshore companies to split the volume (like I do ).
Beware: if you buy or sell anything to or from a HK company, you are liable for taxes.
Last remark: when I said reasonable amounts and profits: I know of an offshore company in HK which had only one customer, and too high "profits"; this company was used by an indelicate manager of a french company to suck and hide very large "profits" from the french company, this company and the boss not knowing it...
Until some day, someone with a grudge to the manager spilled out the beans...Then, offshore company or not, it turned out ugly...HK like Switzerland is OK for free market, not for dirty money ...

ohh and Rabbit51: Mr Ivan Chan of Wisebank has also an office in Shenzhen, he actually spends half of his time in SZ... Being in Zhuhai, you will have no problem to deal with him.
PM me if you want his namecard, I will send it to you...

Pat_Togo,

Yes, I understand that, but I don't want to make the additional trip to open everything up, so that is why I am going the route I am going.

Mr. Totomolo, I am glad to hear that another person used Ivan Chan with good results. Not that I didn't trust him before, but it's always nice to have some other people's experiences and so on before opening a biz.

pat_togo wrote:BVI is slightly cheaper in terms of incorporation costs, annual maintenance fees, BVI companies don't need a local corporate secretary, no annual return or audit of financial statements by certified third parties etc. However if you plan to set up a company or rep office in China later on Hong Kong is in my opinion the best choice.

Hi Pat,

On a slightly different topic...

For the purposes of getting a residence visa to live in Mainland China, would you say it is cheaper to just set up a WFOE in Mainland China, or start a HK corporation and then open a branch in Mainland?

Count Han wrote:

pat_togo wrote:BVI is slightly cheaper in terms of incorporation costs, annual maintenance fees, BVI companies don't need a local corporate secretary, no annual return or audit of financial statements by certified third parties etc. However if you plan to set up a company or rep office in China later on Hong Kong is in my opinion the best choice.

Hi Pat,

On a slightly different topic...

For the purposes of getting a residence visa to live in Mainland China, would you say it is cheaper to just set up a WFOE in Mainland China, or start a HK corporation and then open a branch in Mainland?

Well, in the short-term the HK+local rep office is obviously cheaper because you don't have the registered capital burden, however depending of your business model (and if you expect to earn income in China) it makes more sense to set up a WFOE (either as a private investor or with a HK/offshore company as its parent company).

Plus don't forget that the rep office in Shanghai needs to be registered in "A-grade" buildings which usually make it more expensive, have to pay a monthly 10.5% of the value of its expenses in taxes to the government and hire employees only through government approved agencies (such as FESCO) which will in most cases make payroll much higher. While with the WFOE there is more flexibility to reduce taxes and have lower operating costs.

It seems the visa restrictions are loosening up a bit I don't think you really need to set up a company if that is the sole reason. Just get a six months F visa and set up a HK company for your business.

Has anyone used Asiabs.com to set up an HK company? Any comments about them?