Business setup in Hong Kong or Mainland China have some differences due to the different company laws and regulations. Registering an Hong Kong company is more quicker than registering a business in mainland China. Mainland companies will cost more to start, mainly due to stricter office requirements and the fact that you’ll need an accountant to make regular reports.
There are two most important factors to consider when choosing where to start your company: (1) Who your target customers are; (2) Where you use your money. If you plan to live in China for a long time and your customers are primarily Chinese --- then you should register a mainland company. If your customers are foreigners, or if you’re going to spend a considerable time outside of China, then a Hong Kong company might be preferable.
Pros and Cons of Hong Kong and Mainland China Companies
1. Hong Kong Company
Pros:
(1) Easy to receive a variety of different currencies;
(2) Can open an HK company in one or two weeks;
(3) No need to really have an office (just an address);
(4) Tax reporting less frequent and less complex;
(5) Invoices are easy to make. You can design and print your own.
Cons:
(1) Under certain situations, it's difficult to get a bank account;
(2) Can’t make mainland tax deductible invoices;
(3) Cross border payments (to and from China) are inconvenient.
2. Mainland China Company
Pros:
(1) Much more convenient to do business with mainland customers;
(2) Necessary for internet related businesses;
(3) Can use it to sponsor your own work visa;
(4) Can make mainland tax deductible invoices.
Cons:
(1) Tax reporting more frequent and more complex;
(2) Rules regarding real offices and addresses might be enforced;
(3) Having registered employees with social insurance might be enforced;
(4) Difficult to convert and move Chinese RMB outside of mainland China;
(5) Changing your business license, address, or bank can be a hassle;
(6) Invoices (or the official paper to print them) must be obtained from the relevant tax offices. You cannot simply make an invoice in excel and use it to bill customers.
In fact, many of Tannet’s clients set up companies both in Hong Kong and mainland China to serve different purposes. Our experienced consultants can give you the most suitable suggestions for doing business in China according to your actual conditions.
Contact Us
If you have further queries, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422 or 86-755-82143181 or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen South Rd, Luohu, Shenzhen, China.
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