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Michael Michelini is with us on how to setup a Hong Kong Company for your Amazon business covering the tax efficiencies and the perks of doing so, the disadvantages to watch out for and who should look to Hong Kong.
- Getting deeper into Amazon and moved to Thailand
Why and what perks?
- Michael came out to China to get the benefits of speed
- Wanted to develop products faster
- If you’re on the ground in China or Asia it’s a lot faster
- Wanted to setup a company and a trading office
- Differences of Hong Kong and China – Michael was guided by a lawyer that directed him to setup a Hong Kong structure first
- Known to be a good B-2-B trading entity for buying from factories in China or Asia
- SIngapore is also a good location for Amazon Sellers or Brand Owners
Lower Taxes
- Lower to no tax, Michael advises to pay taxes somewhere
- Usually people choose to pay in HK for 16.5% or 8.75% on first 2m Hong Kong dollars revenue
- Usually 30-40% in China
- Can get lower taxes and English Banking
- Trusted as a first world country based on the UK laws and systems
Disadvantages
- Partner in a CPA company
- Not been as easy for virtual based companies in Hong Kong without a physical presence/office in HK.
- Banking has got harder for Digital Nomads now
- Audits are more challenging and mandatory in HK with a licenced CPA to check your book-keeping
- Make sure there’s no funny things happening
- This is not free and a couple of thousand dollars a year
- Upkeep is a little expensive compared to US
- Pay higher fixed but less tax in the round
- Register as Non-US Entity on Seller Central with 10% ownership or above in the Corporate Structure then you’ll need to be a US Company
- Set it up as the Hong Kong company owns the US company
Delaware
- Wyoming is also pretty hot
- Not such an expert on US corporate structure
- Picked Delaware as it’s the most common structure for most companies structures
- Look at Wyoming as well
- You can incorporate in any and you pick one
- Delaware is popular as it has no state tax and low annual fees
- The federal tax you have to pay
- Michael’s first company was in his personal name and his company was in a New York city address with huge taxes and three levels of taxes
- Where Delaware has no City tax just federal
Who is Hong Kong for?
- Need half a million to a million in revenue
- A comfortable seven figures
- Hiring in Asia
- Where do you want your IP or Brand owned
- Own it in HK or Asia and can do wholesale orders globally from HK
- You can look like a Factory, Supplier from China
The Steps to make it happen for Tax Efficiency
- Unipro in Hong Kong – a licence firm uniprohk.com
- GlobalfromAsia.com
- Bootcamp coming up – intensive multi-day training – July 19-21st in Thailand
