Is Hong Kong Right For Your Amazon FBA Business?

Michael MicheliniBlog, Corporate, Incorporation47 Comments

Are you currently selling on Amazon, in your personal name? Or maybe you have a company in your home country for your Amazon business?

Sales are taking off and you want to start looking global for the right jurisdiction to establish a proper corporate entity.

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.

Note: This is more on the corporate setup side for a HK company and Amazon sales. Check out our how to guide on how to get started selling on Amazon FBA internationally for the business side of it.

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!

Related: Check our full Amazon FBA library for more guides and tools.

Connect with a Hong Kong Business Rep

Ready to get your Amazon FBA business setup in HK? Then look no further, fill out the form on the next page and our client services representatives will be in touch with you shortly.

Get Your Amazon Business Setup In HK!

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[…] is going crazy to sell on Amazon USA from Hong Kong! Read our Reasons why you should setup your HQ in Hong Kong for your Amazon FBA business. Now back to the […]

Nomad Capitalist
Guest

Good review, Michael. What I’ve found is the Payoneer part turns a number of people off. They find it easier to be in the US or EU and set up tax-friendly structures rather than using third parties to get paid by Amazon. The China connection definitely makes sense, though.

Michael Michelini
Guest

hey Andrew,
thanks for reading and commenting! True, there are a few people who ask me how long , how stable will Payoneer be for payouts. There are other alternatives too I’m talking to in case Payoneer doesn’t work out though.

Paulo Calisto
Guest

Hi Michael, the set up looks fantastic. My question is after everything set up in Hong Kong, how to ship the products to the amazon warehouses?

Michael Michelini
Guest

Hi Paulo,
Shipping products to Amazon is the same process here as anywhere – send from Chinese supplier directly, or whichever supply chain flow you want. no need to ship to Hong Kong first, if that is what you’re asking.

But since I posted this – HK banking has gotten very difficult, so this is something to be aware of.

Paulo Calisto
Guest

Thank you Michael. But does these Chinese suppliers ship directly to Amazon FBA? They will handle the customs? I’m thinking about starting, but my afraid is on US customs.

Michael Michelini
Guest

hi Paulo,

there are Amazon FBA logistics specialized companies that can do that for you

Paulo Calisto
Guest

Thanks a lot for the tip. Will dig into it.

David
Guest
David

Anyhow, the importer of record to clear your goods coming into any USA port is require. And Amazon is not going to pay the US Import duty, HMF, and MPF tax on your behalf.

trackback

[…] So many people interested in selling on Amazon USA from Hong Kong, we wrote up a guide Why Hong Kong is Right for your Amazon FBA business, now back to this […]

PAD
Guest
PAD

What is the tax structure implied with this setup? You register on Amazon global, fine. As a foreign (HK) entity, Amazon will ask you to fill a W-9 or W-8BEN form. If you are NOT a US resident in the first place, what will be the end result? For instance, as a EU company wanting to operate on Amazon US, unless you have EU VAT and declare in the EU your US revenue, Amazon US will NOT ONLY withhold 20% on your behalf the equivalent EU VAT on the gross Sales price, BUT ALSO apply the same 20% to the… Read more »

Martin Hernandez
Guest
Martin Hernandez

Hey Michaele,

Great article. I knew about the Hong Kong part, but for a non-us Citizen or Resident who doesn’t live in the U.S. Even though you have Hong Kong Corporation and your income is generated in the US (Outside Hong Kong, meaning 0% tax in HK). Do you still have to pay Federal Income Tax in the US? I ask this because the US doesn’t have a tax treaty with Hong Kong. Can you confirm this please?

David
Guest
David

“Do you still have to pay Federal Income Tax in the US?”

Yes, if the income is generated from US sources, then US Federal income tax is owed on it.

Martin
Guest
Martin

Hey David. “Yes, if the income is generated from US sources, then US Federal income tax is owed on it.” If that is the case then What is the purpose of opening a HK Business. Just Create a LLC in the US, you’ll pay taxes anyway. Here’s an excerpt from an US Tax Attorney: “If you’re NOT a US citizen or green card holder, the situation is entirely different. Here’s how it works: A non-US person is subject to US tax on business income only if they’re “engaged in a trade or business in the US” (or “ETBUS” for short).… Read more »

Richard
Guest
Richard

There are more complications here people. Just because you have a Hong Kong based company doesn’t mean you escape US tax law. Even if you file for a W-8BEN or W9, this doesn’t don’t exempt you from paying local US state taxes. Just google FBA Amazon Seller Nexus Sales Tax and you will see what I mean. Also unless your company is registered in a US Tax Treaty country then you will have to pay double tax. The only positive for Hong Kong companies is that once you pay federal income tax to the US the extra cash that comes… Read more »

David
Guest
David

“because your Hong Kong business is generating that money from abroad you wont pay any income tax” Completely incorrect. The HK business’ income from operations would have to qualify as non-Subpart F income in order to be eligible for *tax deferment* with respect to the US citizen owner’s tax liability. For non-Subpart F income, US taxes are simply deferred on this income until it is paid to the US owner and/or repatriated to the US. Any Subpart F income, and all passive income (capital gains, interest, etc) of the foreign/HK corp do not qualify for tax deferment, and thus is… Read more »

Wu
Guest
Wu

Does Amazon require the personal information on the company director or share holders or is the Ltd company details all that is required?

Would be great to know more about the sign up process from someone who has done it for a HK company.

M
Guest
M

Having a HK company gives you ZERO TAX BENEFIT if you are an Amazon FBA seller, as HK has NO TAX TREATY with the USA. SO you are doing business in the USA (because you have inventory stored there), what this means is that because there is no tax treaty, you are liable for company tax in the USA… you have to file your HK reports to the IRS, and you have to pay company tax to the IRS. They will come after you if you don’t and there are data sharing agreements with the USA and HK. If you… Read more »

Eugene
Guest
Eugene

Having a HK company gives you ZERO TAX BENEFIT if you are an Amazon FBA seller, as HK has NO TAX TREATY with the USA.

Is this also valid for non-US citizens?

Eugene
Guest
Eugene

Does someone know if Amazon would have problems accepting a Hong Kong company with a bank account outside of Hongkong, as for example Swiss bank account?

Lucas
Guest
Lucas

Hi Michael, so being a non-us resident with a HK corporate allow me to enjoy 0% on a corporate level because I am not ETBUS in U.S therefore not liable for Federal Tax in U.S? Is that it?

Sandesh
Guest
Sandesh

Hi Michael,

I am a non chinese resident in HK. I want to start selling on Amazon FBA by sourcing some products from china. Can I do that without registering a trading company? as I want to test the waters first before jumping to a full fledged ecom business. Please let me know.

Thanks
Sandesh

Peter Edwards
Guest
Peter Edwards

Does Amazon HK accept seller FBA accounts from HK companies owned by PRC Chinese citizens ? i have heard that Amazon HK does not accept?
Thanks
Peter

Michael Mak
Guest
Michael Mak

Nice article, learned a lot from it! I am a permanent resident from Hong Kong and live in Hong Kong. I am thinking to start an amazon FBA store, anybody interested in collaboration?

Kevin
Guest
Kevin

Hi, Michael

I have a golf company called selfieGOlf in California. I am already established in Amazon US, looking to expand to Amazon.CN. Are you still looking to collaborate?

SQ
Guest
SQ

Hi
Michael, I’m thinking of something similar. U still around.

trackback

[…] Many Choose Hong Kong as a Base For their Amazon Seller Central Account If you’re interested in selling on Amazon from Hong Kong, we also have a blog post talking about why many say Hong Kong is right for their FBA business headquarters […]

Alex Leung
Guest

May I know how to register Amazon US and Japan using a Hong Kong company? Can you introduce an Amazon Account Development Manager to me?

Mike Wong
Guest
Mike Wong

Have you shipped from Hong Kong directly to an FBA warehouse? If so, would you recommend Hongkong Post, or would you say to go with DHL/FedEx? Thanks!

Arif
Guest

I want to do FBA business with amazon.com and i am living in Hong Kong. I will be operate all thing form HK. Please confirm me it is possible or not.

David
Guest
David

It is very possible if you find a logistic service provide willing to clear the US custom for you when the goods enter into any USA port. The hardest part is to find a company to be the “Importer of Record”. Because it is needed in order to file a custom entry and pay import duty, HMF, and MPF tax before you be able to take out the goods out of a container or airport. After that all you need is any freight forwarding or trucking company to help you truck the goods to amazon fba warehouse that they request… Read more »

Bob Deelan
Guest
Bob Deelan

Hi Globalfromasia do you have a office in Hong Kong , and if yes then please share the address phone number and the contact person name so that we can visit and discuss everything in person.

Anthony
Guest
Anthony

I have a HK company, and we are trying to set up an Amazon account so that we can sell our products on Amazon USA. We are having problem with the Amazon seller identity verification, but Amazon won’t tell us what the problem is. We sent them everything they asked for such as Business Certificate and HK passport, and everything should match up. They asked for a bank statement as an additional verification, and they have suspended the account after that. Do you know what is wrong? Can we use a HK local bank, or do we need to use… Read more »