We have been receiving quite a lot of questions from clients (through our joint venture at Unipro Consulting Limited) and our audience, and want to discuss the logic about keeping or closing your Hong Kong company due to this.
I think we need to look at it in a few different angles, and I have been seeing it and hearing it for years – as well as had a lot of long calls with my business partner, Ray Ng, a licensed Hong Kong CPA – and all I can say is I am glad I stopped focusing on the HK CPA business as my core business many years ago. I even moved out of Shenzhen 1 year ago to the day….
There is personal and there is business.
But first some background:
There has been a growing anti-foreigner, and anti-American vibe brewing in Mainland China for a few years now. The more “we don’t need you anymore” kinda vibe, as they have the money and they have a lot of the knowledge.
HK banking has been getting harder since 2016 and it may be partly tied up to the plan of China to seize control sooner than later – and the banking crackdown showed those signs.
Trade war many say is a separate issue, but I feel this is tied in together, and feel there is US / Western influence on the HK mindset. Mainland China is looking / saying it should re-educate / change the education system so Hong Kongers are less “brainwashed”.
We never knew what would happen once the 50 years was up (1997 – 2047) – but we didn’t expect China to push its power so fast.
Hong Kong is not as big of a financial hub to Mainland China as it once used to be. Shanghai, Beijing, Guangzhou, Shenzhen are all massive now. That means it can push it around and not hurt as much as it would have when it was such a big %.
So now, what should you do?
If you’re already there and setup and happy – I wouldn’t recommend drastically changing everything. Normally making fast moves isn’t the best in business. But diversifying if you can afford it may be worth looking into. I am still operating via Hong Kong, have HSBC and other backup banks. My CPA partner, Ray, and I both say – if the PLA (People’s Liberation Army) flood in with tanks and guns – which still isn’t likely – yes – likelihood has been raising – and people become communist slaves and Facebook, etc is blocked – I do not see banks going insolvent and I don’t see the corporate system collapsing.
It is true, our offices have had trouble filing documents with the tax department the last few months (some documents need to be delivered in person) when protests have shut down the offices, but business will go on even if China takes over.
The funny thing is, I was in HSBC HK recently, and my account manager is actually letting me book appointments (testing it now) when last year he wouldn’t have agreed to look at one. Maybe they finally need clients – true, it is scary with the current markets, so it is your own risk. But I can’t imagine HSBC going insolvent and refusing to give clients their money.
If you’re looking to setup now, as much as I would love to send money to my partner CPA office, I don’t think it makes sense right now. As Joe said, Singapore is picking up a lot of business right now.
- If you are looking for places to live, I think it goes without saying you may not want to look into Hong Kong or South China right now.
Saying it how I see it. But happily living in Thailand, and refreshing scmp.com on the hour.