Living in Hong Kong, working regional

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  1. #11

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    i'll happily eat my humble pie.
    thanks for setting the record straight PDLM.


  2. #12

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    Mar 2007
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    Quote Originally Posted by aus2hk:
    thank you all for the comments.

    >>>We just opened a company as a wholly owned subsidiary of the US firm
    Did you hire someone to do the legal stuff or did your company do it themselves?

    >>> we've got about 8 visas so far in 18 months of operation.
    May I ask what type of visa?

    >>> What's the disadvantages of being legal in Hong Kong? I assume your company will pay for all the legal fees.
    That's the point. Want to make sure I am compliant with the local law. And yes, comp will pay for the legal stuff.
    Re legal stuff - mix of local legal advice and our US based corporate lawyers. NOT a good example to follow.... I think we made it really hard on ourselves because the folks in the USA are so parochial and incapable of realising not everywhere is like the USA... I'd get local advisors to set you up and keep your head office right out of it if I were you!

    Our visas were work (employment) visas - our staff had contracts with the newly created HK entity. One point I would note - being newly created we did have to jump through more hoops re documentation on the visas than people being hired by "known" entities - so our company stuff needed to be watertight (and the US legal folks, see above comment, made this really hard by deciding that all sorts of stuff is "confidential" and refused to release it to immigration - which was really stupid frankly).

  3. #13

    Join Date
    Jan 2009
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    4

    Kinda happy to hear that I'm not the only one in this situation. I have now arrived in this wonderful city (on a visitors visa so far) and am close to seal a deal on an apt. My plan now are to register the lease in the name of my company back home, open a local company on the address with me as director. This seems to be a similar setup to what MovingIn07 describes.

    I have heard that there is a requirement that the local company employs more than 1 staff (i.e. me). Anyone knows about this?

    As for tax, if you can document that all or part of your income is derived from business outside of HK, you're not required to pay income tax on this


  4. #14

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    Jun 2005
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    Quote Originally Posted by Mov2HK:
    As for tax, if you can document that all or part of your income is derived from business outside of HK, you're not required to pay income tax on this
    Well yes, but if you haven't already done so you should read this IRD Practice Note: http://www.ird.gov.hk/eng/pdf/e_dipn21.pdf

    If the company's profits are derived from work that you do whilst you are physically in Hong Kong then I suspect you may have a hard time persuading IRD that the company is not liable for tax on those profits.

  5. #15

    Join Date
    Feb 2009
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    All, thank you again for your comments.

    Company lawfirm in the US mentioned can help with the registering process in HK. Based on the above feedback, not sure if I want to do this; rather go with a local firm which is adept with local laws...

    Dumb question: Apart from me paying (individual) HK income tax, Will the wholly owned subsidiary/representative office which will I be registering in HK need to pay corporate income tax every year?


  6. #16

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    All HK-registered companies must submit annual accounts and pay tax on their profits. The corporate tax rate is marginally above the individual salary tax rate so, simplistically, you could pay yourself a salary equal to what would otherwise be the profit of the business so that the company broke even (hence paying no tax) and you paid tax on your salary. But it is more complex than that (companies and individuals have different allowances and so on) so you should consult a local accountant if the sums involved are significant.


  7. #17

    Join Date
    Jan 2009
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    PDLM, thanks for the link Wouldn't count on getting a tax break if not all was 100% correct


  8. #18

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    Feb 2009
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    PDLM, can you refer a good accountant in HK whom I can talk to regarding corporate taxes? I need to know what the implications are...

    Movingin07/Mov2HK, how are you dealing with corporate taxes? Is all income earned by the company liable to HK corp tax or just the portion earned as a result of me located in HK?


  9. #19

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    Jun 2005
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    Unfortunately I can't - I have been a simple employee all my time here (up until today). I may be looking for recommendations myself if I form a company to do some free-lancing work shortly (although I may just go Sole Proprietor to start with). Sorry about that.

    Anyone else?


  10. #20

    Join Date
    Mar 2006
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    Quote Originally Posted by PDLM:
    The currency in which you are paid, where you are paid, and the place of your contract have no bearing on HK taxes. If you reside in Hong Kong then in principle you are liable to taxes on your salary whilst here. This is true even if you are not legally resident in the sense of having a visa.

    You will continue to pay US taxes regardless of anything for the privilege of being a US Citizen. There is some allowance so that you don't get double taxed on the first US$86K or so of income.
    Try the American Chamber's roster of service providers or their HK website. If they are like the Canadian Chamber here they will no doubt be running seminars on tax or have a list of accountants who specialize in this.