case scenarios

Original fact

Mr. A want to invest an property in Hong Kong at the cost of HKD4,000,000. And he would like to resell this property at HKD5,000,000. In the Tax Ordinance in Hong Kong, stamp duty is required for transferring property. And the tax rate is approximate 3% for Hong Kong Citizen and 6% for non Hong Kong Citizen. For the case of Mr. A, if he is HK citizen, he will required to pay HKD150,000 for stamp duty and HKD300,000 if he is not Hong Kong Citizen.

Our suggest arrangement

Mr. A can use a Hong Kong company to own the Hong Kong Property. And during he sold the property, he can just transfer the share of Hong Kong company. The cost of paying stamp duty is be much lower with only 0.1% required as per below:

HKD5,000,000 X 0.1% = HKD5,000

Benefit of our suggestion

A cost saving for stamp duty for a Hong Kong Citizen will be HKD145,000 and HKD295,000 for non Hong Kong citizen.

Original fact

Company A is doing trading business with sourcing products from Company C in China and sell to Company E in Europe.

Company С(SUPPLIER)
Company A(AGENT IN EUROPE)
Company E(END CUSTOMER)

The product is directly shipped from China to Europe. Then the bill of Lading will show up the Company C as shipper, and Consignee as Company E and notify parties as Company A. While the end customer and supplier information is found in the bill of lading and Company A may lost her end customer as Company E can directly communicate with Company C for the business.

Our suggest arrangement

Company A can set up a Company H in Hong Kong. Company H & Company A will be the middle agent to split the up the connection of Company C & Company E and the product will remain direct shipment from China to Europe. The only disadvantage will be more administration work to change the Bill of Lading.

When the products shipped out from China, the Bill of Lading will show up as:

Shipper: Company C

Consignee: Company A

Notify Party: Company H

Then the Bill of Lading will change before the cargo arrived Europe as below:

Shipper: Company H

Consignee: Company E

Notify Party: Company A

benefit

Supplier only have the information of Company C and Company E is totally separate and not easy for supplier direct deal with end customer.

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