——
With the continuous development of the economy, there is an increasing demand for Hong Kong companies to carry out business in the Mainland, so how Hong Kong companies can carry out business smoothly in the Mainland has become a matter of close concern to enterprises.
If you have the intention to register a Hong Kong company and operate in the Mainland, I hope this article can bring you some inspiration.
Part.
1
Why can't Hong Kong companies operate directly in the Mainland?
Companies registered in Hong Kong cannot operate in the Mainland directly, mainly because the One Country, Two Systems (policy) has resulted in the implementation of different legal systems in Hong Kong and the Mainland. Hong Kong companies are not subject to Mainland laws and are not governed by Mainland company law.
Hong Kong and the Mainland are governed by different industrial and commercial and tax authorities. Mainland companies need to register with the local industrial and commercial bureau and complete a bank capital verification. After opening, they also need to file a tax return with the national tax department to prove their legal business and tax status, and the main documents include the business licence, tax registration certificate and invoices issued by the tax department.
While a Hong Kong company is registered with the Hong Kong Companies Registry, no bank capital verification is required, and no invoice is used when filing tax returns to the Hong Kong Inland Revenue Department; the government recognises any receipt with the company's official seal. In other words, Hong Kong companies do not need to file tax returns to the mainland tax authorities. In addition, if it does not set up an office, it does not need to register with the local industrial and commercial department. Because of this, a Hong Kong company cannot directly carry out business activities in the Mainland.
Part.
2
Ways for Hong Kong companies to operate in the Mainland
01
Set up a representative
office in the Mainland
It is the most economical, easy and convenient way. But it can only be used to contact businesses, neither purchase and sell with customers directly, nor can be registered for tax purposes separately.
02
Establish a foreign
investment company
It can use the name of a Hong Kong company to set up a wholly foreign-owned company or a Sino-foreign joint venture in the Mainland. But the cost is higher and the procedures are more complicated.
03
Brand authorization
It is the most commonly used method. Hong Kong companies can sign licensing agreements with Mainland companies so that they can manufacture and operate Hong Kong companies' products in the Mainland.
These are the three ways for foreign and Hong Kong, also Macao and Taiwan enterprises to operate in the Mainland, you can choose the suitable one.
HACOS always strive to provide our clients with more high-quality, efficient and considerate services, covering China visas, tax-planning, incorporation, financial consulting, global shipping, intellectual property, foreign trade services, legal consultation, etc.
