Hello All -
I need some advice, because I am getting conflicting information about auditing requirements for local company - and we are indeed in a un pique situation.
-We are a local private company with 3 shareholders
-We are the purchasing company for a larger US company - but not a subsidiary (totally separate entity but some common shareholders)
-We DO NOT have any sales, revenues or profits
-All funds to maintain office and pay employees and other bills is wired in from the USA.
-the employees basically help us to purchase parts in HJK, China, TW and elsewhere in the region.
-we DO NOT sell anything.
-expenses are only salaries, rent, phone, internet etc.
-we DO NOT do any trading whatsoever.
In the past I was told over and over again all HK companies need an audit - and thus we were paying $13K for a reprint of our bank statements on nice paper, because there is no business activity. One of our employees with an accounting background talked to IRD and they told her we would be exempt - until we start trading (anything) or have some profit, sales etc.
She is gone and now the accountants want to start this crap all over again - they are hounding me that I MUST have an AUDIT and a PROFITS and LOSS statement etc...I am confused, because an audit for a company like ours real does not make sense...we have no revenues, no profits, no losses etc. Everything, such as business registration etc is current.
Any advice, ideas or anything?
Thanks in advance!!