HK Bank Account May Get Closed If You Don’t Do This!

As we said a thousand times, it is important to operate your Hong Kong company according to proper regulations and procedures to maintain your HK bank account. 
HK Bank Account May Get Closed If You Don't Do This!
 
Many foreigners who do business in China will choose to set up a company in Hong Kong for various advantages. However, not many people realize the importance of accounting and auditing. 
 
In Hong Kong, an audit is an examination of the financial report of HK company by certified accountants. Once the auditing is done and all the reports and documents are completed, relevant documents need to be sent to the government department. 
 

HK Bank Account May Get Closed If You Don't Do This!

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All companies in Hong Kong must properly keep relevant business information and account books. The company’s books must be kept for more than 7 years so that they can be checked at any time. 
 
In other words, as long as your Hong Kong company has a business, even if you have canceled the company, the Hong Kong Taxation Office still can check your past 7-year bank account. 
 
In fact, many clients wouldn’t finish the audit report and submit Profit Tax Return on time, some even haven’t done accounting and audit since establishment. 
 
Failure to provide an audit report within the time required by the bank result in the closure of the bank account, which definitely impacts the cash flow of business, and the credit of shareholders. 
 

How to know whether your HK company should do zero declaration or do accounting and audit?

In Hong Kong, no matter an HK company has the operation or not, they all need to make accounting and audit before filling in Profit Tax Return
 
As long as you conduct a business transaction or activity in the name of the company, you are deemed to have started business, that is, you must do the audit. 
 
HK Bank Account May Get Closed If You Don't Do This!
 
It can be judged by the following aspects: 
  1. Transaction records in the bank account;

  2. Import and export records from government customs and logistics companies;

  3. Purchase and sales relationship with Hong Kong merchants;

  4. Hire an employee in Hong Kong;

  5. Allow or authorize the use of patents, trademark designs and other information in Hong Kong;

  6. Allow or authorize the use of movable property in Hong Kong to collect rent, rental fees, etc.;

  7. Entrust someone to do business in Hong Kong;

  8. Other profits derived from or arising in Hong Kong.

 

What are the serious consequences if the audit report is not supplemented?

Well, the tax bureau will self-assess the tax and multiply it by three, and the amount of the fine will be increased with time
As the fine is imposed, the Hong Kong court may be subpoenaed and the court will sue the company’s directors and shareholders in accordance with the relevant regulations of the Company Law. 
 
If the tax owed has not been paid, the company will be frozen by the tax bureau, blacklisted or forcibly canceled
 
HK Bank Account May Get Closed If You Don't Do This!
 
The credit of directors and shareholders will be affected simultaneously. There will be some impacts on managing Hong Kong business or exit in the future. For example, if you apply for HK bank account again, bad records shall affect the success rate of opening account. 
 
Tax evasion is a criminal offense. The Hong Kong Government has very strict tax and fines regulations. The maximum penalty is a fine of $50,000, plus a fine equal to three times the tax reduction and may be detained and sentenced to imprisonment after entry for 3 years
HK Bank Account May Get Closed If You Don't Do This!
The audit report is very important for maintaining the company’s Hong Kong bank account. But it is not difficult for Hong Kong companies to conduct an audit. 
 
HACOS has always been committed to providing customers with comprehensive and reliable financial planning, in-depth understanding of the customer’s operating model to provide the most appropriate methods for customers, successfully complete the accounting and auditing of Hong Kong companies, and enable customers to operate legally in Hong Kong. 
 
If you have any questions about HK company and offshore bank account, please feel free to contact HACOS

HK Bank Account May Get Closed If You Don't Do This!

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HK Bank Account May Get Closed If You Don't Do This!

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SOURCE | PBOC / China Daily / CNBC

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HK Bank Account May Get Closed If You Don't Do This!