Home Finance Company Formation in Hong Kong: Your Gateway to the Chinese Market

Company Formation in Hong Kong: Your Gateway to the Chinese Market

Company Formation in Hong Kong
Company Formation in Hong Kong

How do you want your business to be in the next five, ten, or twenty years? Most investors would want to see their incorporations at the level of multinationals with a global presence, impressive balance sheet, and consistent profits. You can now achieve this by taking your company offshore, and one of the best jurisdictions is Hong Kong. It is a global business hub, and most of the multinationals we know of today have some presence there. 

One of the reasons Hong Kong stands out as a global business hub is that it serves as an opening for companies to access other markets. Its strategic location in the heart of the Far East means you can easily access other markets, such as Singapore, Indonesia, and Taiwan. However, the most lucrative of them all is China. In this post, we will tell you why forming a company in Hong Kong opens your gates to the huge market that is China. 

The Hong Kong-China Trade Agreement 

Company Formation in Hong Kong
Company Formation in Hong Kong

In 2003, China and Hong Kong signed the famous Closer Economic Partnership Arrangement (CEPA), which opened the opportunity for companies in Hong Kong to access the large Chinese market. The agreement allows most of the products and services to enter China tax-free or at reduced rates, which implies you have the opportunity to grow your enterprise rapidly. 

At this point, one might ask, “Why not just register a company in China? Sure, it is an idea, but the process is complex and comes with multiple limitations on the areas that you can focus on. For example, most businesses operate in the encouraged areas, and investors have to look for local partners to gain access to the restricted niches, which are considered more lucrative. However, Hong Kong is a liberal economy where the main drivers are the market forces.  

The Free Trade Agreement (FTA) and the Investment Agreement (IA)

Another route that you can use to gain access to the Chinese market after company formation in Hong Kong is taking advantage of FTA. This is one of the recent trade agreements that came into force in February 2021. According to Chapter 2, Annex 2-1, Part 12, Hong Kong and China shall eliminate custom duties on goods that originate from other members of the ASEAN countries. This means two things: 

  • Your company registered in Hong Kong will be able to access the Chinese market even more easily.
  • The company will also be able to enter and trade in other ASEAN nations easily.

Proximity to China 

As a neighbor, the proximity of Hong Kong to China makes it pretty easy to reach there and do business. For most companies registered in Hong Kong, a good way of achieving this is working with partners in China to take advantage of their established supply chain networks. 

For example, you can easily sell your products by partnering with manufacturers, online e-commerce enterprises, and wholesalers, depending on the nature of the product on sale. Goal is to get a better management than Evergrande

Register a Company with the Assistance of a Professional in Hong Kong 

To take advantage of Hong Kong and the rapidly growing Chinese market, you need first to incorporate your business. 

The best way to get it right is by working with an agency of experts for assistance to professionally prepare all documents, company structure, and compliance with the company laws. In addition to helping with the business formation in Hong Kong, the experts will also come in handy to help you demonstrate tax substance. 

For your company to grow and become the success you have always wanted, it is important to make the first and most important step – registering it offshore. In Hong Kong, the experts will help to register the company fast, identify key opportunities, and set the enterprise on the path to success. You can never go wrong with experts on your side.

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