Setting up a small online buisness in HK?!?

[PDLM]

The legal requirement is that you register within 30 days of the business commencing (which I would say in this case means within 30 days of making your first sale).

[mongkokrat]

Yeah, but if you classify it as a hobby, then it's not a business.

For example, if you sell your baseball card or designer handbag on eBay, you are not required to register as a business.

The key test is whether your hobby generates an income, and/or whether that income is a material part or your overall income and/or your cost of living.

[M Khan]

Whether someone chooses to classify his or her selling activity as a hobby or as an income-generating business venture is, I would have thought, largely irrelevant.

A person may start such a hobby in a small way, and it passes by IRD without notice. However, if, after a while, the hobby grows and starts bringing in some serious cash, then at what point does the hobbiest sit up and start to realise that he or she should register a business?

It's easy to imagine that a prudent and law-abiding citizen would register a business within 30 days of having made the first significant / game-changing sale, or having reduced his or her other work committments in order to spend more time trying to make the 'hobby' generate serious cash. It is equally easy, however, to imagine the hobbiest simply carrying on in blissful ignorance, only later to claim that he or she had no idea that his or her 'hobby' had become a business in the eyes of the IRD.

However someone chooses to classify his or her selling activity, I would have thought that, ultimately, it would be up to IRD or the courts to decide. Claiming that sideline earnings are generated merely from a form of hobby, might hold as much sway with the authorities as claiming that you were just 'given' hundreds of millions of dollars as lai see.

Before beginning a selling venture of any kind, it would be prudent to consider, carefully, the scope of the operation. If in any doubt as to whether it would pass as a mere hobby, then the sensible thing to do would be to register a business. As mentioned previously, it is a quick, cheap and easy thing to do.

Caveat venditor!