What To Consider When Opening a Hong Kong Company

Michael MicheliniCorporate, Incorporation, Podcast2 Comments

enter-hongkong

My first podcast, I pushed it out quickly to get the ball rolling after an amazing DCBKK (Dynamite Circle mastermind) a week earlier. Please be easy on me – its my first podcast and more to come regularly. Thinking weekly, will settle on a regular schedule soon.

Topics Covered in This Episode

      • Business Scope for your Hong Kong Company – B2B or B2C? Business to Business (B2B) can be your “Asia”-based sourcing / trading / import & export branch, while you still keep your USA or “home country” company opened for B2C (business to consumer) or retail sales business. Just a way to make “baby steps” to an Asian based company.
      • Understanding that HK is your Center in Asia – if you want to open a China, Philippines, or other company in the future, that goes under this Hong Kong entity.
      • Get in the game! – thought process of receiving multi-currency funds. Centering your cashflow around HK.
      • Using a Hong Kong company for legal contracts – Using a HK company in Asia is the best option when making purchase orders, business contracts, and even personal or contractor agreements.

 

Transcription

For this first podcast, YES….we actually transcribed the entire podcast to TEXT! Man, that took one of my team members 5 hours to do…so most likely not going to do this for future episodes – but since we did it anyway….

Thank you listeners!
You are tuning into an episode 1 of Global from Asia. It’s been about one week and I’m back here in Shangjan and that was exciting and amazing time at DCPKK over in Bangkok . Dan and Ian from TropicalMBA.com have been inspired this podcast of mine. To get started..
So what is Global from Asia? It’s not about offshore companies and tax evasion. The purpose is building in international and global business from Asia specifically in Hong Kong. The first episode here I thought would, first would be my story and how I got over here in china and Asia started to be my global business.
The year was 2007 and I was four years into starting selling online on ecommerce. And I was really frustrated trying to buy from Chinese factories. I had already quit my job and I was living in San Diego in my friend’s apartment, read the four hour work week. And was really trying to build the whole global business. I saw that canton fare and then Google, the source’s fair is comin’ up in the following seven. And I took a flight out for one month coming to Hon Kong, through Shenzhen, Shanghai, Beijing and then back to the US. Living in Hong Kong has really overwhelmed. I was not at all expecting the developed country and place I’ve seen. What I’ve learned in America, I thought America was the biggest country in the world and everyone else was really kinda just trying to catch up. I was going to this trade fairs and I was thinking of, you know, I was already have told to try to buy from a US company trying to buy from these Chinese companies in Hong Kong based companies. I was just big alone I would have to go downstairs to bank of America get of papers receipt, scan it and send it, alright? Where I started to learn in from this factories I could just pay from HSBC, Hong Kong and certain learn all these different ways of keeping funds in Hong Kong bank account and being able to pay companies on multiple factor is because when you’re buying from overseas, usually, ill buying from one company in less there usually, treating company and you’re paying pretty high fee on top of your normal fees. So, I started to learn about all of these different things and then later in seven after I was back in America it was Christmas, I decided to take a flight back. And maybe seek want into living here in China, I went to Shenzhen right across to the Hong Kong. Actually, honestly, I’ve been living on, honestly, I didn’t first think of needing a Hong Kong Company. I thought I could have, I mean, we have save money and I open up a Chinese company and I had really no idea what I was doing. I couldn’t find anything online and they started asking in different aspects in businessman in Shenzhen, and in Hong Kong and was given all different kinds of feedback. And what I ended up learning from a lawyer that I’ve paying a lot of money to, was I should open a Hongkong company first and then from there, I could open up a Chinese company and other company is all over Asia or all over the world as a Hong Kong parent company. So that’s one thing I just wanna explain to everybody and it does sound overwhelming. And as some people think maybe we gotta shutdown in the US Company or your home country company. What I was suggest is, for those that don’t know be the B is or be the C is, be the B is when you’re selling to other businesses or doing like trading your wholesale. And be the C where selling to your direct client or in customer retail. So, for me I was sound be the C from a US company and then when I came over I open up, I quote ” Be the B training Company in Hong Kong”.
So even though I was living in China, I didn’t shut down my US Company, I still kept the operating as is. But it just give me more flexibility having a Hong Kong company or I could wire transfer more money than need it for one factor and just keep extra funds in a Hong Kong account for quicker payments just in time payments from a different factories and companies in Asia.
I know people get really confused, “Do I need to keep my home country?” “ Do I have US company? “Do I have a company?” “Do I have a Philippine company?”
I would just say, if you’re already doing business now, and you have company any or in the whole country, don’t get concern about having to shut it down and if everything over do in Hongkong or Asia based companies, still should keep that operating. Just like life and then business is just an evolving process. So now that we have that history, what I did like I just suggest recommended I keep my US Company open but I’ve try to add more and more activity in this new Hong Kong company. So for those of you listening, I’m not sure if you’re planning to be the B or to be the C but I’m just gonna just talk about how I did it with the ”Be to B company”.

So, once I have my bank account open, of course you gotta get money in that bank account, alright? The easy ways to send money you gotta get from the other, your other company or your personal funding to fund it. You know, I like to trying to get customers to put money in my bank account. As I hope for you guys too. So I was sending out quotations for different products I was doing an import-export resourcing right? So I was sending quotes, I finally got a customer to pay my 30% deposit to get some a fractions done. And these were the benefits again I thought of having a Hong kong company over a using my US company was I sent him a bank transfer details. And then he sent me the money, they’re very quickly it did settles my account and I can log in online and I could send a wire from the online banking. It just be see we have other episodes talking all about banking merging accounts and just kinda give an overview today. So, I had the money in there and then the factory I can control the flow of money must for easily. And then from Hong Kong to china bank transfer to only about a day so with the same day but usually it was only overnight then they have already their money in their bank account. I can keep extra posts in my Hong Kong account and sometimes the 50% down and pay 30% to the factories to keep the 20% spread other benefits like this. And then later I was actually paying this different countries I started to buy from Thailand, started to buy in India, I was buying from all over the place and one of the negatives or the throw backs of my experiences in dealing with the US company in US bank accounts was the high transfer fees. And it’s been a few years since I’ve send a transfer from the US but there wasn’t really any online transfer options from many banks that I could find. And here with Asia, see I could transfer online for about thirteen US dollars fee to countries all over the world. I later pay people even Europe and the pay transfer is extremely fast and you’d have online confirmation numbers send them with in minute of transfer and I so I could email it right away. And then also send them receipt of payment from their invoices. You just have much more control about your payments.
As I grew my business and started to get more comfortable in doing international business from Hong Kong I was started to do business in the Philippines and I think a lot of people know that there’s one of the betters herious to have English speaking supports customer service and I started in Manila. Honestly, I was also thinking I had to have a company base in the Philippines if I was gonna be there having workers but I again, I’ve learned a lot in business is to kinda go step by step. So in the Philippines, I ended not opening a company and look very very complicated, looked very very expensive and its a little bit risky not to operate a company in a country where you’re plan to have staff receive money. And maybe I’m be get in trouble for didn’t talk about this on the radio, but I what I had to do is, I had money going in to Hong Kong for my customer projects as I was doing as CEO at a time and what happened was money goes to HSBC Hong Kong account. And then I would have the manager in the Philippines’ invoice, the Hong Kong company and the money will go into the manager bank account. Technically, it is my account into my cashier and then that cashier was responsible for paying out the office rent and the staff. Again, this is a little bit risky to paying on your risk tolerance but in the Philippines, I was very small company home office, and a lot of times they’re working from home in flexible working, you know, now with these online working platforms maybe those even need to send money internationally you could just pay online, through credit cards but at that time I was just thinking, they didn’t want to have an online bank account and it went through one person when out to many. That’s just another benefit. Again, you could use the US company for this but again, I was only maybe five hundred dollars, thousand dollars US a month and the bank transfer fees when I was paying back in America is forty five dollars for each of it is thirteen dollars so for me, I didn’t have to risk sending higher amounts to the Philippines or other country that kept majority of my money in Hong Kong as send money to China, India, Philippines, to Netherlands, to all over the world, then I was keeping the majority of my money in Hong Kong is just again, another example, of some of the benefits including the Hong Kong company while where you’re off shore travelling is international business plan.
So, now that it gives you some examples as starting in living in, living even better what I started to learn was Chinese companies is sometimes even had HSBC Hong Kong bank accounts and Chinese factories are learning that is also easier for them to do business through Hong Kong or rather from China so really amazing thing about business is in Hon Kong, is you’ve been pay HSBC same day transfer, no fee from one bank to another. So, basically it saves more everybody that has a Hong Kong company that has HSBC account. You know, money could transfer between your accounts and their account in the same day. So I was paying companies the same day transfer, they’ll get the money and business was done right away. It was like confirmation day which they will check their account they receive money was done. That’s just another amazing benefit for me and others doing business in Hong Kong.

And then being a typical American I had a really done much business outside of the America and I remember when I, some multi-currency bank accounts I thought really like in the international, it is pretty amazing. I have Euros, and dollars, Hong Kong dollars, and other currencies that has switch in my HSBC accounts. Receiving money from another currency is not a problem it stays in that currency unless it has deposited into your bank account and you can send that out or you can convert that real time in your account for a nominal fee. I was always checking that and transferring online. When Hongkong dollars, or your money US Dollars, Euros, etc.,is not a problem. And it just part of doing business.
Another big bonus is Hong Kong has a lot of British influence and legal system there is amazing. So whenever I write contracts, or personal or between contractors or companies I always put in Hongkong law and Hongkong legal system. This makes things much work clear and again if you have other companies that you’re dealing with, hopefully, they are also having a Hon Kong company so you could have a contract between in a Hong Kong company to another Hon Kong company under Hong Kong law as a contract. That it just makes seems you’re a lot safer and luckily for me I haven’t had to occur in this issues but think both sides its just know that is legit and then if you’re using a Hong Kong company in a Hongkong law, you cant really get to sneaky and get away with much that is really air tight when you’re dealing with another Hong Kong company with a Hon Kong governing law.

Okay guys, so I might kinda confuse the hell out of you so let me to kinda go through the scenario here. Again, this is just our first episode and I’m not gonna spend every single point here but I’ll just give you an overview. So you may be thinking sitting here listening to this podcast and Okay what would I do next to have a US company or I’m Brazilian and I live in brazil and I have Brazilian company so i think if you’re serious about doing business in Asia or globally and trying to make this movie, don’t shut down that company, don’t interrupt the operations there but looks seriously into opening a Hong Kong company, taking a trip out to Asia, get it done. After that you fund the account either with the money that you have or money from customers. So let’s say make a sales in the US companies selling on ecommerce or even maybe kick starter or something you get funding. Then you may have to get on buying that stuff from Asia and maybe you have multiple suppliers to buy it from. Again now that you have this Hong Kong company and makes life lots more simple and you can send the full balance or many all your purchases you wanna do in Asia to that Hong Kong company one shot. And then you can sprinkle money to different suppliers. So if you wanna pay a company in China or in Hong Kong or in Taiwan, drop a little bit some money to all of them through like 30% depositors, 50% deposit. You usually don’t wanna pay them all up fronts, right? Just like a normal be to be transaction. And then you can control that cash writing a contract to them from your Hongkong companies to hopefully their Hong Kong company.
And then as you grow your business, hopefully, you get customers from your other countries South America, Asia, Russia and they’re gonna want to buy products from you. And then one issue that I had when I was in the US when I was trying to get guys to buy from me to China, I know that they felt a little bit strange paying in the US company when they had to go to a Chinese company when you have a Hong Kong company to see much more legit to do international business from companies anywhere in the world.

As American company when I was doing some import-export, when I was doing ecommerce, they were buy a thousand pieces from me and if I invoice it from my US company, this felt like I was a little man. If I have a Hong Kong company, then I must be more direct. I must in a factory; in fact I have much more connections much more serious. That’s just another big bonus you gotta think about. It’s a global business out there and if you’re doing business in Asia and you invoice it from the US and you gonna get money away a few days to get posted it. You gotta transfer it over a couple more days to get to China, that’s just like a lot of extra time. And then bigger buyers from Europe or in Asia or in South America or other parts of the world. We are global economy now, they’re gonna start thinking you’re not serious, you don’t know international business and this is faster. They’re gonna maybe try to find your factory directly. They’re trying to do business surround you just by being in a Hong Kong, you just take it much more seriously in the international landscape. That’s just another big big bonus that you gotta keep keep in mind as well.

And now for a socialagent.me update.
For those who don’t know, I’m co-founder CEO of start up call social agent. Its a marketplace to connect company’s sales agent to help generate more business leads for their companies. Its been a project I’ve been working on for over a year now. We’re doing an accelerator in China and were working really good tractions at the moment. And I just like to offer everyone on the call access to a free webinar that were gonna be hosting on regular basis if you could just check out www.socialagent.me/webinar and find time that suitable for you to be a live webinar with me and you gonna ask questions and interact with me and the other audience members and understand more about how your company can generate more leads. For those agents out there that want to get some extra cash can turn some other contacts into cash.

So, that’s it today! Thanks everybody for listening. Again just like everything in my life, I leave of feedback and this is my first podcast and I would just love any positive/negative/distractive feedback that you could give me on.

My new podcast website www. globalfromasia.com. You can send me an email to directly at mike @ socialagent.me

And I’m really excited to keep going and try this weekly and maybe even more and get a lot of different people interview lines up both in Hong Kong, in China, in Asia or even overseas in America, or in Europe that are using Hong Kong businesses to run a global business. If you know anybody to suggest of being a guest, I’ll be more than happy to talk to them as been six years now doing business myself here and have a quite good line up with a different guest. I want poise so much with just my voice coming in the future. But anything i hope to help you guys grow your online businesses globally. Thank you.

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gerprz
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gerprz

Great maiden podcast!
Thank you

Michael Michelini
Guest

Thanks! I just knew I would never be satisfied with the 1st one so just pushed it out.

Just published the 2nd one about 1 hour ago