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AbacusHKCPA - Company Formation and Company Registration by Hong Kong Accountants (HKCPA)

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Success Story

Lower tax rate in Hong Kong

Background
  1. Mr. A originally buying from China and selling to France using his own French company as the middle trading firm (F Ltd);
  2. Mr. A flies frequently to Hong Kong and China – to meet clients and suppliers;
  3. Trading profit of Euro 100,000 is subject to French tax rate – around 40% .
New arrangement
  1. Mr. A setup a Hong Kong company, H Ltd;
  2. H Ltd becomes the middle trading company – buying from China and selling to France;
  3. Goods still shipping directly from China to France;
  4. Selling and purchase at same price as before;
  5. Mr. A hires a staff in Hong Kong – to help handle the sales and purchase orders.
Benefit
  1. Profit of Euro 100,000 will be profit of H Ltd;
  2. Hong Kong profits tax rate of 17% applies;
  3. There is saving of 23% in profits tax.
Important : Overall Tax Position

Mr. A still needs to fulfill personal income tax filing to French government – in order to assess overall tax saving scenario.

See also :

Company Formation > Hong Kong > Limited Company > Advantages[:: of using Hong Kong company::]

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AbacusHKCPA - Certified Public Accountants base in Hong Kong (HK) - ACCA, HKICPA, providing services of

company formation, financial management, business advisory, tax planning, auditing and accounting.