Blog Startupregistry.hk - Company information

Record of newly registered local companies

Hello,

we have a good news!

Regardless the increase of the Business Registration fees from 250 HKD to 2250 HKD, the total number of newly incorporated startups have been increase from the first half of the year of 2013 compare to 2014 by over 6,000 companies. The total amount was 95,408 local startups were newly incorporated under the Companies Ordinance in the first half of 2014.

The total number of live local startups registered was 1,233,780

Your startupr

Introduction and testimonial – Abroad Production Limited

Intro:

Abroad production is a talent agency in IT and business consulting Services Company. We build applications and provide the expertise and talents of our specialists all over Asia and worldwide by recruiting top talent resources, implementing solutions and contributing to the success of our clients and their projects abroad. Our products are applications for android and ios. HR 2.0 related: networking, recruitment, marketing, communication, business travel tools. Linkder app is already in development and will be in stores in September. It’s a “business matchmaker” to increase the network, developing brand and attract talents. Our services include: international recruitment, head hunting, expatriates management, web marketing strategy, community management, project management. A program of “commonwealth exchange” permits to candidates from all over the world to have experiences in IT or HR or tourism in Canada and Australia. Abroad production also guide new working holiday visa holders in Asian countries to find them a job, accommodations or networking events The idea was born while the founder, Marie Braud, was traveling in Australia and found a way to connect expatriates that were looking for jobs via an app. She as a background as a IT head hunter in France, Morocco and Canada. Since then, she found a developer in Asia as a supplier for the development and start to build. Abroad production. She chose the capital of high technology as her head office: Hong Kong.

Testimonial:

Startupr Team, was very helpful for me to set up my first company. I was in Hong Kong just for 1 week and Startupr Team has been very reactive for everything, they have answered my email when I was in the airport on Sunday and set up a meeting on Monday, then he advise me and guide me during the all process. They are very professional and client oriented. Special thanks to Tomas as he was in my position before and he knows both European and Asian culture, he also gave me some good tips and inside of entrepreneur life. Hong kong can be a startup paradise and I truly recommend Startupr to help you set up your dream company !

Director : Marie Braud
25/06/2014, Hong Kong
AP Your international HR 2.0 business partner Www.abroadproduction.com (07/07/2014)

Accounting and Auditing Hong Kong Limited Company – Case study – A I.

Read a case study regarding accounting/auditing of a Hong Kong Company. Company was set up on December, 2013.

Dear xxx,
As your company has incorporated on 17th September 2013 and determined 31st March as the company’s financial year ended date, the first Profits Tax Return (“PTR”) normally issue to the company by IRD (HK tax department) in March 2015 and need to complete and submit to IRD within 3 months since the issue date (i.e. on or before June 2015).
According to our discussion previous email, in order to avoid state the fact of over 18 months of first audit, the first financial year end date would be March 2014.
For the accounting and audit, please provide the following information:
– All sales invoices/ consulting service invoices;

– All purchases invoice/ subcontractor’s invoices;

– All service agreement;

– All expense receipts;

– All bank statements;

– General ledger and management account (i.e. Trial Balance, Balance Sheet and Income Statement). If this one you cannot provided, we can provide bookkeeping service to handle it.

Should you have any question, please feel free to contact us.

Your accountant J

 

Please not that Startupr is not a CPA firm and we don’t provide auditing services.

Hong Kong tax exemption – Limited Company

Startupr can introduce you to an accounting & auditing company. Here is an example of one of our client’s request & reply of a CPA firm.

 

1. For transaction of payments which I am receiving from my clients in China, Thailand, Vietnam and with payments to my corporate partners for providing the services, what will the taxes involved be for my company? The reason for asking is that I was informed that these transaction will not involve taxes in Hong Kong since the transaction did not happen in Hong Kong and the service provider are not from Hong Kong. So will appreciate your clearance on this.
2. With regards to the book keeping of my company account, does your team provide the service? And if so, what are the data I need to provide?
3. The expected turn around by year end is between 400,000 to 800,000 Euros, should there be taxes involved, what will the tax bracket be? And if you have any suggestion to keep it lower.
4. If I were to invest a good portion of the profit within the company into new ventures under the company name, will this help on the taxes should they be chargeable.
ANSWER:

1/ Yes, if all your business transactions (sales and purchase/ services) were negotiated and concluded outside HK; goods shipped not via Hong Kong, your company may apply offshore claim. IRD, the HK tax authority will send you a offshore tax queries letter (approx. 3-5 pages) and you required to reply with supporting documents such as your passport record, sample of full set of sales and purchase invoice and bill of lading, contract as well as relevant email correspondences. Once IRD approved your company is offshore, the company’s profit is not subject to HK profits tax.

2/ Yes, we shall provide you the book keeping, auditing and taxation services as well as the professional service for answering the offshore tax queries as mentioned in point 1.

If you use our services, generally you are required to provide us all bank statements, sales and purchase/ service invoices, all agreement and expenditure invoices/receipts. We shall then generate the management accounts for your approval before auditing.

3/ HK profit tax is calculated by 16.5% on the assessable profits for the year (e.g. year 2013/14) and on top there is provisional tax for next year(2014/15) by 16.5% on the assessable profit year 2013/14, that’s mean pay double.

However, as mentioned in point 1, if your company is approved offshore company, the profit is not subject to HK profits tax.

4/ I don’t understand well your question, would you please advise in details.

Before the engagement, there are some information that we would like to confirm with you as follows:

  • Your company is incorporated on 7/12/2009, your first audit and tax filing should be completed;
  • If, please provide copies of the latest audited financial statements, tax return and tax assessments for our reference;
  • How many transactions per year the company has during the period from the latest reporting period up to this financial year ended 31/3/2014 or 31/12/2013?

Once we received your documents & information, we shall then send you our fee quotation.

Hong Kong Limited Company – Accounting & auditing

Let us explain the requirement & procedure of accounting & audit issues and HK taxation as well. This is a case study for a company incorporated in September 2013.

Accounting & auditing

According to the statutory requirement under the Hong Kong law, the first set of financial statements should be prepared for period covering not more than 18 months from the date of incorporation. Hence, may I suggest you choose (say 31st December or 31st March) to be your financial year end date? Your first audit will then cover a period from the 16th September 2013 (date of incorporation) to 31st March 2014 / 31st December 2014.

If your company commenced its business during the above period, you need to prepare the following documents (up to 31st March 2014 / 31st December 2014):

– All sales invoices/ consulting service invoices;

– All purchases invoice/ subcontractor’s invoices;

– All expense receipts;

– All bank statements;

– General ledger and management account (i.e. Trial Balance, Balance Sheet and Income Statement). If this one you cannot provided, we can provide bookkeeping service to handle it.

If not yet commenced business, you may report a “Nil” profits tax return (“PTR”) to Inland Revenue Department (“IRD”), Hong Kong Tax Authority , with the declaration of not yet commence business by the director or company secretary of the company. But please note that you are still required to perform first audit in accordance with the Hong Kong Companies Ordinance which mentioned above.

Taxation

Normally, IRD will issue your first PTR to the company after 18 months from incorporation date. It should be submitted within THREE months from the date of issuance of PTR. Once reporting the financial year end date to IRD, the submission deadline of the annual PTR together with the audited financial statements are as follows:

 

 

Financial year end as at Tax filing date Documents ready for audit
1) 31st March 15th Nov Not later than 1st Sept
2) 31st December 15th August Not later than 1st June
3) Other dates than (1) or (2) e.g.30th June 30th April Not later than mid of Feb

If all your company’s income are sourced outside HK, your company will not be subjected to HK tax, you may apply offshore profits claim once you submitted your PTR and financial statements. IRD will then issue an offshore claim queries letter to you for the proof by providing the passport of the directors/ sales representatives and some samples of sales and purchase/service fee invoices, contracts/agreements and shipping documents e.g. bill of lading. We shall provide the professional service for answering this offshore tax queries to you.

We hope the above will give you a clear picture of HK audit and taxation system. If you choose our service, please let us know which financial year-end date you will use, your business nature, commencement date of your business and volume of transaction during the above mentioned period. We shall then send you a fee quotation for the accounting, audit & taxation services.

Should you have any question, please feel free to contact us.
info@startupregistry.hk

Hong Kong Company Limited – Yearly and other requirements

Hello,

we would like to remind you all your yearly requirements which are necessary to follow up once you set up company in Hong Kong.
This check list is updated of The new Companies Ordinance (Chapter 622 of the Laws of Hong Kong). The New companies ordinance  has commenced operation on 3 March 2014.

•Annual return (includes list of officers & directors) must be filed within 42 days of the anniversary of initial registration date, along with a $25 USD fee. We remind you of this requirement by email 1-2 months before due date.

•Inland Revenue Department (IRD) tax filing for newly incorporated companies falls due 18 months after the incorporation date. Thereafter, the tax authority notifies companies every April 1, who must then file within 30 days.

•Initial annual audit must be filed within 18 months after incorporation date, unless the company has unlimited liability.

•An Annual General Meeting (AGM) must be held within 18 months of incorporation, at a time and place the directors announce.

•The Business Registration Certificate must be renewed one to three years post-incorporation, depending on the Certificate issued. Renewal must be one month before expiration. We will remind you of this requirement by email 1-2 months before the due date.

Yours staupregistry

Hong Kong Limited Company – Offshore status

Here is an explanation how to gain the offshore status for Hong Kong Limited company. We demonstrate the offshore principles on Hong Kong Limited company which was registered on 11th of October 2013.

As the company has incorporated on 11th October 2013, the first Profits Tax Return (“PTR”) would issue to the company in around March to April 2015.
Company’s financial year ended date has determined as 31 March, the first financial year ended date could be March 2015.
If the company commenced its business during the period 11th October 2013 (date of incorporation) to 31st March 2015 (“the period”), you need to prepare the following documents (up to 31st March 2015 ):

 

          All sales invoices/ consulting service invoices;

          All purchases invoice/ subcontractor’s invoices;

          All expense receipts;

          All bank statements;

          General ledger and management account (i.e. Trial Balance, Balance Sheet and Income Statement). If this one you cannot provided, we can provide bookkeeping service to handle it.

If not yet commenced business, you may report a “Nil” profits tax return (“PTR”) to Inland Revenue Department (“IRD”), Hong Kong Tax Authority , with the declaration of not yet commence business by the director or company secretary of the company. But please note that you are still required to perform first audit in accordance with the Hong Kong Companies Ordinance.

 If all your company’s income are sourced outside HK, your company will not be subjected to HK tax, you may apply offshore profits claim once you submitted your PTR and financial statements.  IRD will then issue an offshore claim queries letter to you for the proof by providing the passport of the directors/ sales representatives and some samples of sales and purchase/service fee invoices, contracts/agreements and shipping documents e.g. bill of lading. We shall provide the professional service for answering this offshore tax queries to you.

We hope the above will give you a clear picture of HK audit and taxation system. 

Startupr is not a CPA (Certified Public Accountant, registered HKICPA – Hong Kong Institute of Certified Public Accountants) firm. CPA services are provided by independent CPA firms.

Startupr is merely acting as an agent in connecting your company and the CPA who has agreed with us that they will provide auditing services. In no way is Startupr acting as a CPA firm or providing auditing service in any way and your solicitor-client relationship is with the CPA and not Startupr. CPA is independent of Startupr and is not an employee of Startupr.
Startupr is not a CPA firm. Startupr is an agent for connecting Hong Kong companies with CPA. Startupr is not a CPA firm, is not engaging in an auditing practice and Startupr does not act as a CPA firm. Startupr does not provide auditing advice.
Nothing on Startupr is audit or CPA advice and you cannot rely on it. You should always consult an audit expert to get certainty of your accounting issues and obligations.

If required by client, Startupr will refer client and coordinate with independent CPA for provision of audit services – Startupr not responsible for actions or omissions of such CPA.

Penalty of late submission of Profit Tax Return

There is certain period you should submit the PTR (Profit Tax Return) to IRD (Hong Kong – Inland. Revenue Department). If you fail to do so, you may be required to pay a penalty. However, you can there is a way to waive the penalty.

Here is an example of an email sent from an accountant firm:

 

Enclosed please find the letter from IRD. The penalty of late submission of HK$1,200 be waived and IRD would not take further action on this occasion.
Please note that it would not be easy to wavie this type of penalty in future. In view of the company is active and may have profit for the year ended 31st December 2013, please provide the documents from 1st January 2013 to 31st December 2013 for our accounting/ audit / taxation purpose.
In order to avoid late submission penalty, please provide the documents on or before 1st June 2014.
Should you have any question, please feel free to contact us.

Hong Kong Business Registration Fee and Levy

Dear Customers,

the Inland Revenue Department will increase the Fee from 250 HKD to 2,250 HKD starting from 1st of April, 2014.

Please contact us for further questions.

 

Accounting and auditing Hong Kong Limited Company

Accounting and auditing

According to the statutory requirement under the Hong Kong law, the first set of financial statements should be prepared for period covering not more than 18 months from the date of incorporation. Hence, may I suggest you choose (say 31st December or 31st March) to be your financial year end date. The first audit will then cover a period from the date of incorporation to 31st December / 31st March.

 

If your company will be commenced business, you need to prepare and provide the following documents (up to 31 December / 31st March ):

 

          All sales invoices/ consulting service invoices;

          All purchases invoice/ subcontractor’s invoices;

          All expense receipts;

          All bank statements;

          General ledger and management account (i.e. Trial Balance, Balance Sheet and Income Statement). If this one you cannot provided, we can provide bookkeeping service to handle it.

 

Taxation

Normally, Inland Revenue Department (IRD), the Hong Kong Tax Authority, will issue Profits Tax Return to the company which incorporated over 18 months.  The first Profits Tax Return should be submitted within THREE months from the date of issuance.  Once reporting the financial year end date to IRD, the submission deadline of the Profits Tax Return together with the audited financial statements (e.g. for 2013) are as follows:

 

Financial year end as at Tax filing date Documents ready for audit
1) 1st January to 31st March 2013 15th Nov 2013 Not later than 1st Sept 2013
2) 1st to 31st December 2012 15th August 2013 Not later than 1st June 2013
3) Other dates than (1) or (2) e.g. 30th June 2013 30th April 2014 Not later than mid of Feb 2014