Hello,
After a week of emailing accountants - I'm even more super confused about what I REALLY NEED for an ecom company. I get the feeling they are adding on services we don't really need.
Heres the plan:
Like a million others on here - Buy products from China and sell (mostly) the EU and US! Scale this and start shipping and fulfilling in bulk eventually.
My company is registered in Hong Kong, but I have another in the UK which I could use. Obviously, HK has much better Tax rates. There's only 2 of us, both directors who both take dividends so I we don't need payroll.
I've already spoken to a few accountant/consulting firms in HK claiming to understand ecom companies, but it's plainly obvious they often have little knowledge about what we need and how to manage it.
Having given up on listening to accountants speaking in tongues, I've turned to STM for some clear, concise help!
My questions are as follows:
1) Why do we need to pay an accounting firm for bookkeeping if we are using XERO or Quickbooks to track and log everything? I mean what are they actually doing?
2) What services would we definitely require from accountants to keep this type of business in order, above board etc?
3) VAT - are there specialists who can submit VAT returns to each geo? If so, where the hell do you find them? OR should any accounting firm be doing this without outsourcing the work?
4) What quote range should we be expecting for an HK ecom company making over 1000 transactions/month and a couple of million USDs in rev a year?
5) Do we need accountants in HK, or could we use accountants anywhere, and do the audit with a HK registered accountant?
Apologies if my questions are both vague or basic - accounting just isn't something my 45sec attention span can handle...
REALLY appreciate anyone who is up and rolling on a similar business model in HK and can pass on some decent accountant contacts to us!
Cheers for your time
You know where the tax rate is 0 for offshore operations? USA baby! (Wyoming etc)
Ditch this HK company ASAP, plenty of snags that will destroy you down the line of your not careful.
- limited card processing if you loose stripe
- your supplier many ship through HK without you realising and you’ll be stuck with a huge tax bill
- drown in accounting nightmares, as you’ll get audited in the first year and a half, your books need to be perfect
- fines if you less stuff up
- bank accounts that don’t sync with xero etc so it’s a manual nightmare
With USA everything just works...
Sent from my iPhone using STM Forums mobile app
Hi Nick,
Haha I haven't been on STM for years, but remember you from way back on your very first follow along! I was a couple of weeks behind you starting! Still in the game it would appear!
Interesting to hear this. Sounds like you're speaking from experience. We're going through our 18month HK audit as we speak and I literally have no idea what the accounting bill or fines are gonna be at the end of it... either way we're pretty fed up with this neverending shitstorm.
I seem to remember you're British and were living in Thailand right? How the hell do you get a US bank account and a US company, if you're not a yank and not resident in the US? I've applied at half a dozen banks as a Brit, living in Cyprus for HK and UK companies and they're all giving me the same spiel about not opening accounts for both internet companies, and companies with directors not resident in the company's geo.
Banking has been our biggest headache by far the past 2 years - HSBC I've been waiting 11 months now! Banking is the main hurdle we have before expanding and doing other things.
Would really apprieciate if you could give me some pointers on the US thing?
@grasson78
We've outgrown our current accountants and going through similar issues, trying to comply with VAT laws.
If you can get the processing part done without too much manual interference, a realistic quote would be between 10 to 25K yearly. That all depends on the service level and where your accountants are based (London would be more expensive than in the country).
With the processing part, I mean that all your sales and purchase invoices get into the accounting system digitally (scanned or PDFS or API). Same goes for your banking transactions.
That part is the high volume work that can cost a lot if it has to be done manually ( volume x hours).
The most important thing is to get the basics right, so invest time in getting the right accounting package (sage and others would come to mind).
I'll give you an example. Our current system recognises 0%, 6% and 21% VAT rates, but we need to account for 19% VAT in Germany. So even if I can get the invoice right on the shop side, I can't get it right in the accounting system.
Annoying and creates extra work.
The tax might be low in some countries, but you easily forget about the tax on your time and other's time to accommodate these exotic structures into something workable for the markets where you are doing business.
So I agree with Nick to get rid of this HK business, but if you are British, I'd opt for an Ltd.