Are you currently selling on Amazon, in your personal name? Or maybe you have a company in your home country for your Amazon? Sales are taking off and you want to start looking global for the right place to establish.
Then look no further! Today we’ll discuss why Hong Kong is a great place for you to headquarter your Amazon FBA business. Start selling on Amazon US and other global markets from HK and Asia direct.
Getting Started Selling on Amazon
There are massive courses written on how to sell on Amazon. This guide is focused on setting up your account from Hong Kong, but we also give some general tips on Amazon FBA selling in general to start.
It consists of two parts, 1) Finding a good product and 2) optimizing your Amazon listing once its listed.
Here are a few tools many Amazon sellers use, here are a couple our readers discuss:
- Jungle Scout – One of the first and most diverse collection of Amazon seller tools out there.
- AmaChete – a newer, more affordable tool for Amazon sellers.
Try out one that works best for you – to dig through the massive amounts of data to find products that have a good opportunity for you.
Easy To Buy From Chinese Factories
Hong Kong is where everyone setups up their business for their import and export business. It is right next door to Mainland China, without the complexities and headaches that you’d get in the PRC.
So your Chinese factories, many of them, will already have a HK company and a Hong Kong bank account, most likely HSBC HK. You can pay them immediately, no fee, and they will receive the funds almost at the same time.
You can envision one of those drug deals in the movies, or hostage situations. One side brings the “goods” (drugs, hostage, etc) and the buyer brings the cash. Well, in more modern action movies, it’s not a suitcase of cash anymore. Instead its a laptop or a code that sends the funds to their bank account with the press of a button.
Not to correlate drug dealing and buying from factories, but you can be inside their factory for the deal. You finish doing a quality inspection, and whip out your HSBC Hong Kong online banking afterwards. Show them you transferred the funds (spin the laptop around and show the screen). Also you’ll have a reference number on the spot. They can check that same instant. They confirm the funds received, and they let the container ship leave the factory dock.
If you do this from an overseas bank, it would at least be 24 hours or so, and much higher fees. Are you buying from many factories and doing a lot of factories transactions often? You can save a ton of time, fees, and headaches by having a HSBC HK bank account.
Low or Zero Percent Tax
The corporate tax rate in Hong Kong is 16.5%, which is low already in the global index. On top of that, if you can prove you’re an offshore business, you can get a 0% exemption on the earnings you make outside of Hong Kong.
If you’re selling in Amazon USA, then, that isn’t Hong Kong right? Enjoy this offshore tax while also being in a great jurisdiction like Hong Kong. This way you can enjoy the legal protection and corporate image. Best of both worlds.
Amazon Has Overseas Sellers Programs That Make It Easy
Amazon allows sellers from around the world to sell in the Amazon USA marketplace. And now that you can piggyback off their fulfillment operations via FBA (fulfillment by Amazon). No longer do you need the headaches of a warehouse and logistics center in USA.
Buy your products from the factory in China, pay from your HSBC HK bank account, and ship them direct to the Amazon FBA warehouse in America.
Once the sales start to come in, Amazon pays out the sales proceeds every two weeks. Get an account with Payoneer and have the funds sent direct to Hong Kong. Nice and smooth.
Don’t get left behind with others who have more complex business operations. Take it from me, e-commerce was a lot, LOT harder ten years ago. Nowadays, you don’t even need a website, just load up in Amazon and get the sales payments twice a month.
Credit Card + Phone Verification
We have gotten a lot of attention from Amazon entrepreneurs going through the HK setup process, and a good question we received is below:
A problem I see is they’re asking for an international credit card (which my HK company does not have- just UnionPay). How did you do it? some of their support articles and comments from people on the internet seem to indicate they need to verify that you have a phone number in HK too.Alvaro
This is why we suggest people to apply for a credit card at the bank – the same time they go in for a new account opening.
Phone number, people use online numbers like Skype in.
Can Grow Into More Business Opportunities Later
Selling on Amazon is a great business. Lots of people are making good monthly income from. But maybe once you get the sales coming in and the business running, you want to try something else.
No problem, you can leverage the power of this Hong Kong company for your new venture too! You can apply for the many merchant account options and get that connected direct to your Hong Kong business bank account. Open your own shopping cart and pay direct via Shopify or another cloud based shopping cart.
Can You Sell on Amazon USA with a Hong Kong company?
Yes, this is possible. You register your Amazon seller account with your Hong Kong business registration certificate. It will ask you a million and one times if you are American or not. You need to be a non-American to do this – legally. But for those non-USA citizens, this is a great way to connect your Amazon USA sales to your Hong Kong business.
You can then have Amazon send money to your Payoneer or World First account and then receive the funds in your Hong Kong bank directly. With the funds in Hong Kong, you can then directly wire money to your Chinese factory. Often times they have a Hong Kong bank account, such as HSBC, so there are no fees and the transfer happens within seconds.
Talk about fast and efficient! This is pretty close to F2C (Factory to Consumer) – you can also read up a blog post where we discuss F2C
Will I Receive USD or HKD (Hong Kong dollars) from Amazon payments?
The next most popular question is what funds you will receive. Most think they must receive Hong Kong dollars and get hit on the foreign exchange (FX) fees. But there are other options. We discuss this a lot in our member’s forum for client.
Here’s an interesting answer from one of our clients:
There are a couple of companies that can keep your money in USD and have way lower fees than Payoneer. We are looking at OFX right now and also World First. OFX has an office in HK. Looks like that is what we will do. And then link to Hk bank account once we have itGFA Client
Many of our clients have also been using Remitsy as a way to get money into China successfully while banking is pending.
Of course, these policies and fees are always changing, so best to ask these service providers.
Connecting HSBC HK to Amazon
While there have been people saying that Amazon won’t wire to Hong Kong – I have had readers (as of October 2016) tell me that they can add their HSBC Hong Kong business bank account to their account directly.
No 9 digit routing — and few people online say dont use first 3 of the 12 number of your account (say 1st 3 numbers are bank not account number)
After a lot of chats with Amazon seller support, my contact was able to connect his HSBC Hong Kong bank directly, simply by choosing Hong Kong and then using the above trick to get the account number to fit. Others please help update me.
Doing Your Amazon FBA Bookkeeping
So once people get the Hong Kong company setup for their Amazon business, they then ask how do they best balance their accounting books? While there is no difference in bookkeeping for an e-commerce business as there is for any business, there is a setup that many sellers have been using.
This is called A2X Accounting – it is a plugin on top of Xero software that connects automatically to FBA’s database and imports all your sales numbers in. This way you can save time from data entry as well as worrying about “fat fingers” and other issues with humans.
What Do You Think? Ready to Leverage Hong Kong for your Amazon FBA Business?
So I know how stressful it is when structuring your corporation. Or even more stressful it is to restructure and close down a company and move funds and assets to another. But that is the only way we grow and stay competitive.
I’d love to hear any and all comments. Maybe you don’t agree – please share! You should be at a certain level to maintain the upkeep costs of an international business. And also able to come to Hong Kong at least once for the bank account opening. We offer services for Amazon sellers and online business owners who aren’t in Hong Kong to make the process as simple and smooth.
If you like this article and blog, we’d be ecstatic if you’d consider our HKVIP Hong Kong registration package. We will take care of everything from A to Z. We work with a lot of Amazon sellers and will give you pointers and tips we have seen along the way.
Even one of those tips during the setup process could save and make you thousands of dollars, so we hope to see you soon!