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Renting from a Company - but paying to directors?!?

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  1. #1

    Renting from a Company - but paying to directors?!?

    Hi everyone,

    Urgent question here. I am renting from a company, but am being told that the company doesn't have a bank account that can take payments.

    So they said we have to pay the directors of the company instead. Is this appropriate? Has anyone seen this before?

    If so, what documentation do I need to protect myself?

    HKExpat2017


  2. #2

    Join Date
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    Quote Originally Posted by HKExpat2017:
    Hi everyone,

    Urgent question here. I am renting from a company, but am being told that the company doesn't have a bank account that can take payments.

    So they said we have to pay the directors of the company instead. Is this appropriate? Has anyone seen this before?

    If so, what documentation do I need to protect myself?

    HKExpat2017
    I used to rent from a development company and it surely had its own bank account. Generally rent should be paid into account of the person who enetered the tenancy agreement with you, unless stated otherwise in the agreement. Otherwise its hard to prove you indeed paid the rent!!

    If they want you pay into directors personal account, include this info in the tenancy agreement.

    Company without a bank account? Sounds abnormal.

  3. #3

    Thanks Shafiq. That is great advice. Will make it clear in the provisional that this is the method of payment.

    This isn't a development company. What I have been told is that this is a shell company set up for Stamp Duty planning purposes. So basically the landlord set up a corporation to hold the property. Supposedly this is very common?

    Alex


  4. #4

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    Landlord wants to avoid transactions on his company account to reduce or avoid an audit fee.

    Also want to avoid reporting company income and prfit taxes.

    They might be able also not be willing to stamp the lease and issue you a receipt for the rent, for tax purposes


  5. #5

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    Lease stamped, and agrees to provide quarterly receipts.

    Jrkob - indeed easier and cheaper to buy or sell shares in a company than to buy or sell a property. Bonus points if the company is a BVI.


  6. #6

    Thanks for all the responses. What does it mean to have the 'lease stamped'? Does that mean the tenancy agreement is stamped with the company chop/stamp?

    Alex


  7. #7

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    Stamp duty is paid on the lease. Google it.


  8. #8

    Ah, I see. Yes, stamp duty will be paid on the lease. We have agreed to equally bear the stamp duty, which I understand is a common practice.


  9. #9
    Original Post Deleted
    Haha yes, I am new to HK. That easy to tell from the stupid questions?

    Interesting that you agree to pay for all of it. Is that to make sure it gets done?

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