Typical services provided with a Virtual Office:

• Postal address and registered address for your company
• Cashing Checks for you.
• Providing a unique phone number with real people answering the phone.
• Virtual Fax which forwards faxes via e-mail.
• Informing you via e-mail on incoming physical mail.
• Scanning physical mail for you.
• Forwarding mail to your actual location.
• Providing a company secretary.

They usually also work together with an accountant which will prepare the required audits for you.

The services vary quite a bit though. You have to make sure that your virtual office provider has a reasonable size and is not likely to go bankrupt soon. As you will rely on him to process important business mail for you and also have your company address at that place.

If you do a Google search you will find a lot of global virtual office providers. I highly recommend to use a local provider specialized in doing business in Hong Kong. The global ones are either not adapted enough for the local situation are too expensive focusing on big companies only.

Suggested providers you should research:

• Jumpstart / BMC Services Limited
• IBC International Business Center Hong Kong

For a detailed step by step guide on how to set up a company, find a virtual office provider and set up a business account with a local bank check out http://www.HongKongIncorporation.com.

The tax system in Hong Kong is a territorial taxation system. You only have to pay tax on income arising in or derived from Hong Kong, not on your world income.

The fiscal year ends with the 31^st of March. Shortly before that date you will get an assessment notice from the Inland Revenue Department (IRD). You have to take care that you save enough each month to pay the tax. In other jurisdictions the tax is automatically deducted from your salary, so you will never have a problem to pay the tax.

Quick tax overview:

• No tax on capital gains
• No VAT
• Maximum Profits Tax: 16.5%
• Maximum Salaries Tax: 17%

The profits tax has a flat rate of 17%. The salaries tax however uses a progressive rate system which keeps the tax very low if your salary is low.

Progressive Salaries Tax System (in HK$):

• On the first $40.000 the tax rate is 2%.
• On the next $40.000 the tax rate is 7%.
• On the next $40.000 the tax rate is 12%.
• Everything above the $120.000 will be taxed at 17%.

All of the above tax rates refer to the year of assessment 2008/2009. They usually change slightly every year. You should check out the website of the Inland Revenue Department for the current rates.

Due to the low taxes Hong Kong is one of the best places to incorporate your business. For a detailed guide on how to do this, check out http://www.HongKongIncorporation.com.

Quick tax overview:

• No tax on capital gains
• No VAT
• Maximum Profits Tax: 16.5%
• Maximum Salaries Tax: 17%

This favorable constellation makes it very interesting not only to set up a business for business purposes itself. It might be interesting for you to hold your assets with your own company. Remember: no tax on capital gains! Or you might even want to live in the most exciting and vibrant city of Asia.

All this is possible with your own business. If you can show that the local economy profits from your business through paying (low) taxes or employing locals, it is quite easy to become a Hong Kong resident and even permanent resident. You will also get your own working visa by employing yourself. This allows you to live in a very interesting and exciting city and pay only minimal taxes. Hong Kong taxes are territorial taxes, so even when you live in Hong Kong, you do not have to pay taxes for any income gained from any other country.

If you want to use Hong Kong as an individual tax haven or a tax haven for your business it is a good place for both of it. Compare your current tax situation with how it could be in this jurisdiction.

A step by step guide on how to set up your own business in Hong Kong is available here: www.HongKongIncorporation.com.

Why Hong Kong?

Advantages over setting up the business in China Mainland itself:

• Stable economy
• Easy to set up a company
• English as business language
• Low taxes
• Law and rules easy to understand and implement

Advantages over setting up the business somewhere else:

• Close proximity to mainland China
• No import tax
• Low general taxes
• Trust – as Hong Kong “belongs” to China

How does the workflow look like?

The first step is to find Chinese factories you are interested in through websites like Alibaba. After that you order a product sample. Then you might want to visit the factory and make further arrangements. You offer the products through your website. If you want to do direct online retail you send them to your customers directly from here. You might order products on demand from the factory or have a small stock in your “office”. As the location of an online retail business is not that important, you will be surprised about very cheap rent in some parts of Hong Kong like the “New Territories”.

Setting up a business in Hong Kong is actually quite easy. For more information you should check out www.HongKongIncorporation.com.

Everybody can set up a business in Hong Kong. There are no restrictions on nationality.

There are basically too ways to set up a Limited Company in Hong Kong. You can do it by the help of an agent or choose the cheaper alternative and do it on your own, which is not as complicated as you might think. This is the ideal solution if you have a tight budget.

The basic steps are very easy:

1. Select a company name.
2. Prepare the Memorandum and Articles of Association of the intended company.
3. Write a “Statement of Compliance on Incorporation of a Company”.

There are no fixed requirements for the Memorandum but many templates are available. After a successful registration you will receive a Certificate of Incorporation. This will take about 4 business days.

Your business is incorporated after that. The following steps however are still required after that:

• Prepare document “Notification of first secretary and director”
  Note: You need at least one director for your business which is most probably you, and a secretary which can be a company or a natural person but must be in Hong Kong. There are a lot of specialized companies who act as a secretary on your behalf for a minimal fee.
• Prepare document “Consent to act as director or alternate director”
• Prepare document “Notification of situation of registered office”
  Note: A registered office is required in Hong Kong. This does not have to be a physical office and most often isn’t. Specialized companies offering virtual office services providing you with a registered office address are abundant in Hong Kong. You can usually get a package including virtual office and secretary service together.

That’s basically it.

The steps above are all described in detail on the Hong Kong government website. If you want them in a step by step guide together with further information like how to set up a business bank account for your company, you want to check out www.HongKongIncorporation.com.

Ordinary residence

A person who remains voluntarily and legally in Hong Kong for a fixed purpose (i.e. studies, business, employment, residence) for a short or long time is ordinarily resident in Hong Kong.

Settled

If a person is ordinarily resident in the HKSAR and is not subject to any limit of stay he is “settled”.

Right of Abode

The right of abode means that you can enter the HKSAR and be free from any condition of stay. Furthermore you cannot be deported or removed from the HKSAR.

Right to Land

If a person loses the Right of Abode he automatically gets the right to land. The only difference between the Right to Abode is that a person with the Right to Land might be deported from the HKSAR.

In either of the above cases you will get an identity card. Currently the Government issues two different types of identity cards:

• HK Permanent Identity Card, which states that the holder has the right of  abode in Hong Kong
• HK Identity Card, which does not state that right

Becoming an Ordinary Resident

You become an ordinary resident if you successfully applied for a student visa, investment visa of working visa. Another option is Residence as a dependent.

Work Visa

You can get a work visa if a local company wants to employ you and you can proof that somebody with your qualifications can not be found locally. Per law any company has to try to fill an open job position with locals first.

Investment Visa

If you want to invest a notable amount of money in a Hong Kong business and can prove your need to be in Hong Kong for that, you can apply for an investment visa. The requirements for this are usually quite high and many people opt for the work visa instead by employing them self in their company.

Student Visa

Check out the details on any university / government school website.

Dependent Visa

If you are married to a person who is permanent resident or is employed in Hong Kong, you can apply for a Dependent Visa and subsequently for an Identity Card.

Getting the Right of Abode +  Permanent Identity Card

After seven years of ordinary residence in Hong Kong you can apply to become a permanent resident. Of course you have to actually reside in the HKSAR for most of the time, but the main focus of the government to issue permanent resident status and the right of abode is that you have filed your tax return and paid taxed for the last seven years. Furthermore you might have to demonstrate why you choose Hong Kong as the place for permanent residency.

An easy way to get a work visa and become a resident is setting up your own company in Hong Kong and employing yourself. This also allows you to get the right to abode in Hong Kong after seven years. You have however more freedom in deciding when you are in HK and when not if you are employed by your own company.

Setting up a company in Hong Kong is quite easy. You can get a detailed, easy to follow step by step guide for $19 at http://www.HongKongIncorporation.com.

As a web business is pretty much location independent, there are a lot of places in the world to incorporate your blog. In this article I will show you the benefits of incorporating in Hong Kong which is probably the best place to incorporate a web business.

Important things about incorporating a Limited Company in Hong Kong:

• Low tax – The corporate profits tax rate is 17.5%. Capital gains are tax free.
• English is an official language along with Chinese.
• Excellent Political Stability
• Low fees to keep your business running (yearly minimum expenses incl. virtual office and government fees: ~US $500).
• Easy Incorporation – Can be done within 7 days and does not require you to go to Hong Kong if you set up your company through an agent.

Other benefits of incorporating in Hong Kong: Nearly no restrictions on business expenses. If you have to fly to the Caribbean to get inspired for writing a blog article it is a business trip and full deductible from corporate profits tax.

Requirements for Incorporating in Hong Kong:

• Every person with a passport can set up a business in Hong Kong. There is no restriction on any nationality.
• Minimum Number of Directors: one (does not have to be local)
• A Hong Kong business address is required. Many agents provide “virtual office” services for this incl. mail forward, voice mail number and fax number.
• A Secretary Required which must be HK resident or HK company. This is usually included in your virtual office package.
• One Shareholder is required and the minimum paid up share capital is HK $1.00.

Check out http://www.HongKongIncorporation.com on how to set up your own company for your blog.

But how to get a long time china visa if you are an artist, are self employed or anything similar?

One option would be setting up a company in Hong Kong – that’s right I am saying Hong Kong, not China itself. Setting up a Limited company in Hong Kong is easy, straightforward and cheap. If you have a company in Hong Kong you can employ yourself to get a work visa there and become a HK resident. This gives you immediate benefits through the close ties to China. You can get China business visa’s with longer validity and multiple entries you might not get otherwise.

The more interesting option is to set up a representative office in China for your Hong Kong company. To strengthen the Hong Kong – China Mainland relations it is very easy for a HK company to set up a representative office in China. This allows you to employ yourself as a manager for the representative office and get a working visa and residence permit for China.

Although it is possible to do this even if you do not indent to do any actual business with your company, your chances are better if you do have some ideas or projects you can do with this company.

For more information about how to setup a business in Hong Kong check out http://www.HongKongIncorporation.com.

How to get your product from directly from a factory:

• Find potential factory via the Alibaba website.
• Order a product sample (Chinese factories usually want you to pay for it).
• Optional but recommended: Visit the factory and get to know the important people.
• Make arrangements for prices on larger quantities.
• Arrange the shipment.

The interesting question is the last point. How to export and ship cheap electronic products from Shenzhen efficiently and with low costs. As you probably want to start small and not with container loads of electronic goods, container shipment is not an option. Here the problem starts: shipping small parcels via the government owned China Post is a big hassle. It is slow, inconvenient and not very relievable. Other logistic providers like DHL, Fedex or UPS are usually too expensive. With all of those options you will most likely get some customs trouble as exporting is regulated in China.

The solution to this logistical problem is piping all the products through Hong Kong. Although Hong Kong politically belongs to China since 1997, it is still a completely separate economy. It however benefits from the proximity to china mainland and has very close ties. The big advantage is that you do not have to pay any levy to import goods to Hong Kong. And once you have them in Hong Kong you can easily ship them to anywhere in the world without having the problems you would have shipping them directly from Shenzhen.

I would recommend setting up a company for this in Hong Kong. This gives you much more credibility as opposed to doing business as an individual. Furthermore you will have to pay lower taxes and have a lot other advantages. This is very easy and cheap to do. For more information you should check out http://www.HongKongIncorporation.com.

• British Virgin Islands
• Panama
• Hong Kong
• Bahamas
• Belize
• Nevis

Factors to keep in mind when choosing a jurisdiction:

Perception of your Company Location

Though there are certain benefits to incorporate in small Caribbean countries or pacific island nations, do not underestimate the public perception of these places. If you want to make business with other international companies you might get a preoccupied opinion if your business is in a jurisdiction famous for tax fraud and maybe sub-legal activities.

Political and economical stability

As a lot of the popular offshore locations are in very small countries you have to keep an eye on the political and economical stability. Things tend to change fast. Especially if the economy is very dependent on a specific sector, like in most island nations.

Costs

You also have to factor in the costs for incorporation, audit requirements, virtual office, annual fees which can vary quite a lot.

Privacy

If you want to stay below the radar and do not want anybody to know who is director or shareholder of your company, you limit your options to a few jurisdictions. Panama might be worth a look.

Tax

As you probably want to build a profitable business, you must check the tax situation of the place where you want to incorporate. Usually you want to have a place which is a tax haven.

Easiness of Incorporation

A factor often underestimated is the easiness of incorporation. Some governments are just very inefficient in their procedures which will cost your time, your nerves and ultimately your money.

Though there is no best jurisdiction which fits for everybody, the best one in most cases will be Hong Kong. In Hong Kong it is very easy and cheap to set up a Limited company in a short time. It has very low business taxes and a very good and stable economy. Close ties to mainland china will give you even more opportunities. Furthermore Hong Kong is Asia’s business hub and will give your company a good credibility. The only disadvantage for some people might be the privacy. Directors and Shareholders will be publicly listed.

You can get a good step by step guide on how to incorporate a Limited company in Hong Kong for $19 at http://www.HongKongIncorporation.com.