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New business - need some hand holding

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  1. #1

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    New business - need some hand holding

    Online business, sells physical products via ebay (USA / UK specifically) , sells via their own website using paypal (Hong Kong registered account) Website is hosted in USA .

    I'd be living in Hong Kong and doing all of this my self. It's possible that some items I would go and collect from the mainland and send them off from there, or from Hong Kong directly.

    As the sale is coming from overseas and the agreement to sell an item is made by the HK company via the server hosted in the the USA, does that have any impact on tax? If I send off an item directly from the mainland (or ask someone else to) does that make any difference?

    Does it make any sense to say limit shipping destinations to anywhere -except- Hong Kong to ensure that I can limit tax by selling everything to 'offshore' clients?

    Does running this as a sole proprietorship make sense in the very initial stages if there is a view to change to LLC at a later date?

    Also is it possible to register a sole proprietorship outside of HK via a 3rd party? I also see that there are no compulsory audits of sole traders, but is that actually much benefit if I'm getting accountants to do the tax anyway?


  2. #2

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    If you are living in Hong Kong and operating your company primarily from here then you are likely liable for Hong Kong tax regardless of where your buyers, suppliers or website server are.


  3. #3

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    So I'd be better off employing myself and working from anywhere else in the world apart from Hong Kong? Can anyone give me some kind of examples of what and what is not overseas income or point me to a trusted web resource with reliable info?


  4. #4

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    No, because wherever you are physically when you are employed in this business is where you will be liable for tax. And HK tax is one of the lowest around, so I'd stay here if I were you. That's not to mention the issue of getting a visa to be employed legally in whatever other place you chose.


  5. #5

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    Seriously, you should consider yourself successful if you are paying any kind of taxes.


  6. #6

  7. #7

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    I'm reading stuff where the guy is saying basically he is getting his product from Taiwan and selling it to the UK so it's tax free.

    I am buying products from Taiwan to sell primarily to the UK market, with goals to expand to western Europe and the US later on. The Hong Kong company will invoice our supplier in Taiwan, and our customers and self employed contractors in the UK (shipping agents etc.) will invoice the Hong Kong company. As all of the business is generated outside of Hong Kong, so the profits will be tax free.
    I could change Taiwan to Mainland China and UK market to US market and that'd apply exactly the same to my proposed business. That guy is based outside of Hong Kong, though.

  8. #8

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    How clueless that person is is shown by the fact that he doesn't even understand which directions invoices go in!

    Last edited by Gruntfuttock; 09-04-2013 at 11:13 AM.

  9. #9

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    Quote Originally Posted by HKHK154:
    I'm reading stuff where the guy is saying basically he is getting his product from Taiwan and selling it to the UK so it's tax free.



    I could change Taiwan to Mainland China and UK market to US market and that'd apply exactly the same to my proposed business. That guy is based outside of Hong Kong, though.

    HAHAHAHA!!!

  10. #10

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    You'd better be selling something unusual. Anything mainstream and competition is silly. You'll have tiny profit margins too. If you do find a gap in the market and start doing well, prepare to be undercut by copycats. Pretty much everyone has had this idea but not many get very far or very rich


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