It is quite important to operate your Hong Kong company according to proper regulations and procedures to maintain your HK bank account and run your business. Please don't forget to do auditing on time.
Hong Kong has long served as a popular gateway into China for foreign businesses. Lots of people who want to start a foreign trade business choose to set up an HK company for various advantages.
However, the authorities have taken strict measures to combat money laundering and fraud. If you ignore relevant regulations or don't follow them as required, your business may be badly affected, for example:
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Face heavey penalty for late filing or late payment of taxes;
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Business bank account get freezed or closed;
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Subject to a tax investigation for too much income of HK company;
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Required to pay more tax for too much overseas income;
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So, how to avoid the risks of bank account shutdown and penalty?
As we've said many times before, auditing is quite essential for your business. As long as you make a good plan and get the documents well-prepared, it's so easy to pass the bank's review and avoid the above-mentioned risks without spending unnecessary time and expenses.
WHAT IS AUDITING FOR HK COMPANY?
In Hong Kong, an audit is an examination of the financial report of HK company by certified accountants.
Once the auditing is done and all the reports and documents are completed, relevant documents need to be sent to the government department.
All companies in Hong Kong must properly keep relevant business information and account books. The company's books must be kept for more than 7 years so that they can be checked at any time.
In other words, as long as your Hong Kong company has a business, even if you have canceled your Hong Kong company, the Hong Kong Taxation Office can check your past 7-year bank account.
Failure to provide an audit report within the time required by the bank result in the closure of the bank account, which definitely impacts the cash flow of business, and the credit of shareholders.
WHY IS AUDITING SO IMPORTANT?
Apart from the fact that Hong Kong government mandates all incorporated companies in HK to have an annual audit of their financial statements, auditing also helps to make sure that every single financial statement made by a business is compliant with relevant accounting standards.
Auditing will help accurately establish a business's financial positioning. With an audit report, you can:
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Declare and pay taxes as required by local tax bureau;
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Provide a payment statement of invididual income tax;
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Better prepare for bank's review;
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Get clear of your business's profitability.
Ms Huang owns an HK company established on May 3, 2020. She received the first tax return on March 1, 2021 but neglected it.
On July 15, 2021, the tax return check expired. Then IRD (HK government department responsible for collecting taxes and duties) asked Ms Huang to pay 1,200HKD as a penalty for failure to submit tax return in time.
After that, Ms Huang came to find us for auditing. Since the check has already expired, she has to pay the penalty.
The audit report is very important for maintaining the company's Hong Kong bank account. But it is not difficult for Hong Kong companies to conduct an audit.
HACOS has always been committed to providing customers with comprehensive and reliable financial planning, in-depth understanding of the customer's operating model to provide the most appropriate solutions for customers, successfully complete the accounting and auditing of Hong Kong companies, and enable customers to operate legally in Hong Kong.
Choosing us, you will enjoy:
Attractive prices
Fewer expenses and time cost
One-on-one comprehensive service
Pro solutions and analysis on financial report
If you have any questions about HK company and offshore bank account, please feel free to contact HACOS!
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