hong kong companies, are they still relevant?

May 1, 2023

Hong Kong CompaniesAre they still relevant?

Presented by Kristina Koehler-Coluccia,Director at Koehler Group, a CSC Company

Koehler Group, a CSC® Company, provides a wide range of market entry consulting and incorporation, tax, accounting, and human resource services to organizations interested in entering and expanding their business throughout Hong Kong, Singapore, and China.

Koehler Group was established in 1979, and is managed by an international and local team of over 120 consultants, accountants, and legal professionals in 10 offices throughout these regions.

From our offices in Beijing, Chengdu, Dalian, Guangzhou, Hangzhou, Hong Kong, Shanghai, Shenzhen, Singapore, and Tianjin, we offer services to small-to-medium-sized, privately owned companies, as well multinational corporations.

Our objective is to provide an efficient and cost-effective service tailored to each client’s specific needs, developing a lasting partnership with our customers with a focus on protecting their investments, and maximizing their returns.

Our international desks speak English, German, Spanish, French, Italian, Portuguese, Russian, and Japanese.

By joining U.S.-based Corporation Service Company® (CSC®), we now offer more services to our local clients, as well as expanded offerings to clients in the Americas, Europe, and Australia.

About Koehler Group

About Your Moderator

Kristina Koehler-Coluccia, Director, Koehler Group

Kristina is one of the leading experts in entity incorporation in Hong Kong and China. She has worked in the Hong Kong and Chinese legal and accounting industry since 2003, and advises and represents Western clients with their business interests in Hong Kong and China. She has worked on numerous complex transactions, including foreign direct investments, corporate (re)structuring, company liquidations, and M&A deals. She frequently advises on, and represents, foreign clients in tax, accounting, and trade-related matters. Kristina is the author of Koehler Group’s monthly magazine, ChinaInvest.biz, and has also contributed to numerous other publications relating to the Hong Kong and Chinese legal, accounting, and business practices. She frequently holds seminars, webinars, and gives presentations at business groups and government institutions around the world.

Hong Kong is one of the most important key locations for trade, finance, and

regional headquarters in Asia – and yet again, the territory has been named as the world's freest economy by the U.S. based “Heritage Foundation.” Latest Statistics from the Hong Kong Census and Statistics Department

Note : Figures refer to the first working day of June of the year.

Why establish a Hong Kong Company?

1. Free Enterprises

2. Free Trade

3. Free Market

4. No Trade Barriers

5. No Quotas

6. No Foreign Exchange Controls

7. Low Tax Environment

8. Politically Stable

9. Security

10.Free Flow of Information

Top 10 advantages of locating in Hong Kong

Hong Kong’s Strength: Mainland Access

Opportunities for Start-Ups in Hong Kong

What is Cyberport?

A low density, environmentally friendly campus on the shores of the South China Sea.

A melting pot for Scandinavian, European, North American, ANZ, Mainland Chinese, and Hong Kong companies to come together to create digital content and develop applications and solutions.

An ideal cost effective “entry point” for overseas digital and tech companies seeking to develop their Asian or China strategies.

A Metro-LAN (NGN) with specialist Shared Facilities available to tenants.

https://www.cyberport.hk/en



Cyberport’s Entrepreneurship Programme

Incubation programme: 250+ companies incubated to date, 30 on-site at any one time, plus same off-site

Competitive application and pitching process On-site: Free office space for two years On-site or off-site, financial assistance with training,

marketing, interns, legal advice, etc., up to US $42,000 No share of equity or IP Cyberport Creative Micro Fund: US $12,500 seed-money,

from inception to proof of concept Provide technology, entrepreneurial, and business

development training

Cyberport’s Client’s

Microsoft + Microsoft BizSpark Centre

IBM Cloud Research Lab & Lenovo Cloud Lab

Regional HQs - Safenet, Rockwell Automation, DDB, Omnicom, Marks & Clerk, Eurosport, TV5

MNCs: Cisco, Jolla

Hong Kong Origin – Computer And Technologies, PCCW, CSL, Centro Digital (ex-Disney Studios, now Deluxe), Outblaze, Animoca Brands, Bull B Tech, GoGo Van, Coachbase

VC: Capital Today China Growth, Mind Fund, Excelsior Capital

Hong Kong Science and Technology Park

Hong Kong Science and Technology Parks Corporation (HKSTP) is a statutory body that has one simple goal – to transform Hong Kong into the regional hub for innovation and technology development.

Currently, more than 600 technology companies and approximately 13,000 technology talents call Hong Kong Science Park home. The incubation programmes are constantly filled to capacity and numerous startups and their products have reached the world stage with our help, driving tech innovation and the city’s economy.

Further Sector Opportunities: eCommerce

Revenue in the eCommerce market amounts to USD $3.3 billion in 2016 thus far

Revenue is expected to show an annual growth rate of 10.5%, resulting in a market volume of USD 5.5 billion in 2021

The market’s largest segment is electronics and media, with a market volume of USD 962 million in 2016

User penetration is at 60.5% in 2016 and is expected to hit 82.6% in 2021

The average revenue per user (ARPU) currently amounts to USD 861.14

http://www.startupshk.com/10-hong-kong-ecommerce-startups-watch/



Further Sector Opportunities: Traditional Trading Hub

Hong Kong’s import and export trading firms are active in sourcing various types of goods, including raw materials, machinery and parts, and a wide range of consumer goods.There are three main types of sourcing activities:

(1) sourcing goods produced in Hong Kong; (2) sourcing goods from around the region for re-exports; and (3) sourcing goods from one country to be

shipped directly to a third country without touching Hong Kong ground


The import business of Hong Kong trading firms is mainly generated by the distributing capabilities under the identity of agents or dealers.

These trading firms usually specialize in one area of products and represent one or more foreign brands.

Their trading map usually encompasses Hong Kong, Mainland China (or certain parts of it) or other Asian countries.


Due to the development of trade supporting services on the Chinese mainland, trading firms increasingly source goods offshore for sales in international markets.

Some of these goods are transhipped via Hong Kong, or shipped directly without touching Hong Kong ground. Such trade, known as offshore trade, is not reflected in Hong Kong's trade statistics.

According to statistics released by the Census and Statistics Department in early 2015, Hong Kong’s sales value of offshore trade in 2013 (including both “merchanting” and “merchandising for offshore transactions”) amounted to HK$4,954 billion, up 6.1% over 2012.

In comparison, the value of re-exports was HK$3,505 billion in 2013, up 3.8% over 2012. The amount of offshore trade has surpassed the value of Hong Kong's re-exports.

Hong Kong as an Intellectual Property Hub

The HK Government has allocated US $3 million to provide IP consultation, manpower training, and other services to small and medium enterprises (SMEs) over the next three years.

Sound legal framework Robust IP protection Sound financial regime Availability of financing Good IP support services Gateway Research and development (R&D) and creative capabilities Dispute resolution center Good support for incubated companies

Occupy Central Protests

Why are companies leaving Hong Kong?

Difficulties in opening Bank Accounts


One needs to create economic and commercial substance in Hong Kong

Considerations on the Hong Kong company level

1. Taxes on dividends and capital gains received in Hong Kong and further tax implications in Hong

Kong

2. Withholding tax when the Hong Kong company pays dividends to its shareholders

3. The effective corporate tax rate in Hong Kong

4. Tax on distribution proceeds when the Hong Kong company is liquidated

5. Stamp duty that may be applicable when the shares of the Hong Kong company are transferred

6. Substance needs: local resident directors, lease agreement of office space, employees on the

ground, etc.


Considerations on the U.S. Company Level

Level of substance that can be found in the Hong Kong Company - Is the Holding company a resident or a non-resident?

Repatriation of Dividends – what do the tax authorities look for? Repatriation of royalty fees, service fees, license fees – what do the tax authorities look for?


Bad News for Hong Kong is always Good News for Singapore


Hong Kong Competing Against China

The Way Forward for Hong Kong

Thank you to the presenter!

Now is time for the Q&A Session

Questions and Answers

Koehler Group Hong Kong HeadquartersMs. Kristina Koehler-Coluccia16/F Rykadan Capital Tower135 Hoi Bun Road, Kwun Tong, KowloonHong Kong Tel: +852 2345 7555Email: [email protected]

Contact Us

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hong kong companies, are they still relevant?

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