Hong Kong stands out as an excellent location to launch an e-commerce venture. Renowned as one of the largest financial hubs globally, the city has long been a fertile ground for online businesses, even prior to the pandemic. With e-commerce sales projected to grow at a robust rate of 8.3% between 2022 and 2024, the market volume is expected to soar to $12.879 billion by 2025.
How to Get my E-commerce Venture Started?
The first step in your journey is to establish a Hong Kong Limited Company. This structure plays a crucial role, as it facilitates interaction with both international customers and the Mainland suppliers.
Your Hong Kong entity will function as a distributor, importing goods from mainland China and selling them to customers worldwide. Because of this distributor role, slightly higher prices may be charged compared to direct exports from the Mainland.
Additionally, one of the key advantages of operating in Hong Kong is its unrestricted international payment system. Your Hong Kong company can receive payments directly from overseas clients, while also utilizing official payment platforms to settle transactions with suppliers in mainland China. Importantly, profits generated can remain in Hong Kong, supporting day-to-day operations.
Moreover, utilizing a Hong Kong company for cross-border e-commerce comes with numerous benefits. The tax system is straightforward and lacks a VAT, making tax compliance relatively easy. Businesses are only required to pay profits tax on their earnings, along with personal salary tax. The profits tax rate is particularly attractive—just 8.25% on the first $2 million, and 16.5% on any amount exceeding that. Furthermore, Hong Kong’s lack of restrictions on foreign exchange enhances financial fluidity.
For more information on starting your e-commerce journey in Hong Kong, please don’t hesitate to reach out to us.
You may want to read: What Does It Mean to be a Hong Kong Company?