Starting from May 23rd, global companies can move their registration to Hong Kong! What are the advantages and disadvantages of the new policy for cross-border e-commerce?

At the beginning of 2025, the global economy is undergoing profound changes. Trade protectionism is on the rise and international market demand is weak. Although cross-border e-commerce experienced explosive growth at the beginning of the pandemic, it is now facing multiple challenges:

High barriers in traditional markets: The tariff policies of Europe and the United States have been fluctuating, and export costs have been rising.

Difficulties in expanding into emerging markets: Logistics, payment, and cultural differences hinder the release of potential.

Industry competition: Severe homogenization, price wars compress profits;

Compliance pressure has increased dramatically: Tax and intellectual property supervision are becoming stricter, and the cost of violations is high.

Against this backdrop, Hong Kong has introduced the Companies (Amendment) (No. 2) Bill 2024, allowing non-Hong Kong companies worldwide to relocate their registrations to Hong Kong starting from May 23, 2024, while retaining their original legal person status and ensuring seamless business transitions. This policy has also injected new impetus into domestic cross-border e-commerce.

I. Core Advantages of the New Policy on Hong Kong's Register Relocation

Reduce costs and increase efficiency, and optimize the global layout

Tax optimization: Hong Kong implements a "territorial principle" tax system, imposing only a 16.5% profits tax on local profits (lower than the 20%+ rate in most countries), and provides tax credits to reduce the burden on cross-border enterprises.

Financial convenience: Companies that relocate their registration can enjoy the advantages of low financing costs, diversified financing channels and no foreign exchange control in Hong Kong, enhancing the liquidity of their funds.

Brand upgrade: Hong Kong's international image enhances corporate credibility and helps expand into international markets.

2. Reshaping legal status and avoiding risks

After the relocation of the registration, the enterprise is no longer under the jurisdiction of its original registered location and is free from strict compliance requirements (such as annual reporting and director restrictions), focusing on business development. It should be noted that pending litigation in the original place of registration still needs to be handled in accordance with local laws.

3. An efficient and transparent application process

Application conditions: A legally established non-Hong Kong company that has been in operation for at least one fiscal year, with the original registered address allowed to be relocated, and with the consent of shareholders and the ability to repay.

List of materials: Articles of association, proof of original registered address, shareholders' resolutions, legal opinions, etc.

Review period: Approximately 20 to 30 working days, with high administrative efficiency.

Ii. How can cross-border e-commerce seize the benefits of the New Policies?

1. Evaluate applicability

Types of enterprises suitable for relocation:

The original place of registration has a high tax burden or high compliance costs;

To expand into the international market, it is necessary to rely on the platform of Hong Kong.

Medium and large-sized enterprises that need to optimize their tax structure.

Not applicable scenarios: Enterprises with complex legal disputes or high tax liabilities.

2. Make early plans for key links

Communicate with the original registered address: Ensure smooth cancellation and avoid any remaining responsibilities;

Adjust the governance structure: Revise the articles of association in accordance with the Companies Ordinance of Hong Kong;

Professional collaboration: Leverage financial and tax authorities as well as legal institutions to improve materials and reduce review risks.

3. Compliant operation and resource integration

After the relocation, it is necessary to abide by the obligations of auditing and tax filing in Hong Kong, and at the same time, utilize its financial and logistics resources to optimize the supply chain and enhance international competitiveness.

Iii. Weighing the Pros and Cons of the New Policy

Advantages

Low tax rates and tax credits;

International brand endorsement;

Financing and foreign exchange freedom;

Mature legal protection.

Disadvantage

Compliance costs such as auditing and secretarial services in Hong Kong are relatively high.

Market access in the Chinese mainland may be restricted;

Cross-border tax planning requires professional support.

One needs to adapt to the regulatory and cultural environment of Hong Kong.

Iv. Professional Advice: Plan carefully and take advantage of the situation to break through

The new policy of Hong Kong's register relocation offers strategic opportunities for cross-border e-commerce, but it involves multiple complex issues such as taxation, law and operation. Enterprises need to scientifically assess the cost and long-term benefits of moving their business records in light of their own business stages.

As a professional financial and tax service provider, Yishitong can offer comprehensive support for cross-border e-commerce

Register companies in Hong Kong and the United States.

Full-process service for book relocation: from application material preparation to compliant operation;

Tax planning: Optimize cross-border tax burden and avoid double taxation;

ODI Filing and auditing: Ensuring the legal and compliant flow of funds;

Company Secretary and Annual Report: Reducing Operational Risks in Hong Kong.

Whether it is relocating to Hong Kong, setting up a local company, or optimizing the existing structure, Yishitong can customize solutions to help enterprises efficiently connect with global resources and seize the new opportunities of cross-border e-commerce in 2025.