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5 Common Investment Mistakes in Hong Kong

5 Common Investment Mistakes in Hong Kong

1. The lack of a clearly defined investment plan

good investment plan, combined with a solid portfolio and a fail proof strategy is what would help most investors in Hong Kong. But not all start with clear investment goals in mind. One common mistake is to not plan ahead and set a time-frame for growth, possible risks and possibility to invest more assets in the future. Investors can rely on the help of a professional consultant who will help tailor a perfect business plan – but they will also need to commit to it. If you want to open a company in Hong Kong our agents can help you with this step.

2. Not knowing about the benefits of the double tax treaties in Hong Kong

As many other countries in the world, Hong Kong has signed numerous double tax treaties that strengthen its economic relations and bring benefits for foreign investors. These agreements offer preferential withholding tax rates and apply for tax residents of one or both countries. This way, investors who produce a type of income in Hong Kong will only need to worry about it being taxed in the Special Administrative Region.

More details on the most common investment mistakes in Hong Kong are available in the presentation below: 

3. Not using tax minimization strategies

Tax minimization is the legal practice of reducing the tax amount due to the state. It is not the same as tax evasion and with a little knowledge, investors can apply various strategies, like making prepayments or donations. Our Hong Kong company formation representatives can help you make use of these possibilities.

4. Not knowing the contractual law in Hong Kong

Contract law is important in cross-border transactions. Entrepreneurs who sign contracts in Hong Kong with other individuals or companies have to pay attention to the law governing that agreement or else the contract might not be binding in the city. Our partner law firm in Hong Kong can help you avoid such events when doing business here.

5. Omitting due diligence 

Company due diligence is important when entering into a business relation with another legal entity and even when signing contracts. The procedure is most useful when company mergers and/or acquisitions take place. Buyers can also perform a real estate due diligence before concluding the final agreement with the seller. This is a protective measure overlooked by many foreign investors in Hong Kong who are in a hurry to finalize a transaction. 

For more information about doing business in Hong Kong as well as professional assistance and advice you can contact our Hong Kong company formation specialists.