Are you an e-commerce expert, or maybe just getting started out? You should get serious and check into leveraging the power of Hong Kong. For your global business, and Amazon USA sales and supplier center’s headquarters.
Today we’ll dig into why Hong Kong is such a great place to base your Amazon business.
Notice – This Is for Everyone Except US Citizens
This article is only applicable for those who are non US citizens. If you’re a USA citizen, Amazon will enforce that you use your US personal tax ID or a US company.
The rest of the world, you can choose where to establish your company and have your Amazon sales go. Just keep that in mind. When you are setting up your Amazon seller central account, it will ask if you, or anyone in the organization is American. If it is 10% or more owned by a US citizen, Amazon will tell you that you must have misunderstood the form. You’ll get sent back to the beginning of the setup process and open a US based Amazon account.
Benefit 1 – Corporate Tax is 16.5%, And Can Also Apply For Offshore Status
So, as a global business owner, you can choose where you setup your business. In Hong Kong, even the “normal” corporate tax is at a global-low of 16.5%. There is an offshore elect option that you can file. (Plug- we can help you with offshore status) If you qualify you can get a 0% exemption.
So ya, Amazon sellers can enjoy this lower tax.
Benefit 2 – Still The Same as a USA Based Amazon Seller
If you’re selling on Amazon USA marketplace, they don’t make the sellers look any different, based in America or not. So you don’t have to worry at all about your sales and marketing being at a disadvantage because you’re not registered in US.
Many people don’t understand this and think they need to be American or they need a USA based company to sell on Amazon USA. Nope.
If you’re interested in digging in more, we have a good podcast with Wilson Blues on selling in Amazon USA from Mainland China. This applies to not just Mainland China, but Hong Kong and other places as well.
So if you’re European, you could just sell from your European company in Amazon USA. But the trend I see is a lot of European entrepreneurs re-structuring their businesses over to Hong Kong. For their Amazon businesses, as well as many business types in general. So why not just start fresh with your new Amazon business? 🙂
Amazon handles the payments to Hong Kong by Payoneer and will deposit it to your Hong Kong bank account.
Enjoy USD Accounts and Multi Currency Accounts
Here’s another big benefit- multi currency bank accounts. A ton of people. The Australian dollar currency volatility is crushing Australia business owners. They don’t have a choice to get a multi-currency account. (Not sure if that is true for all Australians, there must be some multi-currency banking somewhere in the country, no?) So they are getting destroyed when Amazon USA sends them their sales proceeds.
When they register in Hong Kong and get the bank account all setup, they can then get the payouts in USD. This means no more currency risk, and they can convert to any currency they so desire, when they are good and ready. Maybe you can pay in Chinese Yuan to your Chinese factory, or keep that in USD too.
Tons of entrepreneurs I work with are so happy they don’t need to deal with the currency of their home country. They are international business people, traveling the world. They don’t want to worry about the risks in the country they were born in having currency fluctuations.
In today’s world, we are free to do business anywhere we like, and Hong Kong allows us to choose the currencies we hold our cash in. Should be like that everywhere, by default. But until that day, Hong Kong is a good place for you to set up!
Easy to Buy from Chinese Factories
For decades business owners from around the world have benefited from Hong Kong when doing business in Mainland China. Counterintuitive I know, many of us think we should just go direct to Mainland China. But Hong Kong is where it’s at, and even Chinese factories have HK businesses with bank accounts.
So rather than wiring the money from your home country of Europe, Australia, etc, you can save money! Just doing a HSBC Hong Kong bank transfer to your supplier’s HSBC HK account. Free transfer, settles there in an instant.
Easier Legal Contracts
Like buying from Chinese factories, it is also easier to make business deals with them. Because they may have a HK company, a contract such as a sales contract, NDA, or even an invoice is easier to arbitrate if both companies are in the same country!
And even if the factory is only set up in Mainland China, there is a special relationship and understanding between HK and CN. It’s just closer, and the factory will respect you more. Plus they will see you are more serious and long term committed to Asia, China, and business on this side of the world.
As most buyers are still just using their home country’s business structure, you will stand out from the rest! Take this extra time and do it right – factory owners will take your business more serious!
Banks Are Fine With E-Commerce Business Models
We all worry these days about banks approving our accounts and keeping them in good standing. Don’t worry about the banks flagging you as a high risk business if you’re selling on Amazon USA. Banks in Hong Kong know this is a gold mine, because it is!
Come to your bank account interview and application day with your Amazon sales records. Show them the volume you have been generating and the revenue you have. Show the screenshots of the product listings and that you have your own brand.
I’ve helped a lot of Amazon seller clients who have set up their bank account with HSBC and not had a problem. Just be confident and transparent about your business model, Hong Kong is the right place for you to set up your global Amazon business.
It makes sense to do it here – buying from China, selling in USA. This is the trading business of the past, just now re-built for the new technology age.
What Do You Think? Will You Establish Your Amazon Empire in Hong Kong?
There you have it, brain dump of why Hong Kong is the right place for your Amazon USA sales business. As I meet these sellers on at least a weekly basis. I am confident to say that this is the right destination for your long term e-commerce business.
What are you thinking, do you have a company setup yet? A lot of clients started selling on Amazon through their personal accounts and it is getting bigger and bigger. Take that big step and make it formal. It will feel a lot better and REAL.
Or you already have a company setup in your home country for this Amazon business? Restructuring is a bit of a hassle, but you can get through it. Start the HK company and re-work everything around Hong Kong, step by step. The Amazon sales, the supplier orders, a new Paypal HK account.
Any questions or concerns, please leave a comment below! And if you like this article and want to setup in Hong Kong, I’d love to work with you.