Reader Comments

Algo Signals

by ss Daniel Kamesh kamesh (2018-12-15)

According to Algo Signals Review an annual survey conducted by Invest Hong Kong and the Census and Statistics Department, the region situated on the southern coast of China is sought after by multinationals and inland companies looking to expand their business operations in East Asia. The survey identifies new investment trends wherein international firms have made Hong Kong a focal point for their, both regional and worldwide operations while inland companies from China have relocated here to benefit from numerous business opportunities.

A versatile work culture adept in both English and Mandarin languages makes for easier transactions saving companies time and translation costs in the process. Besides, the free floating currency of Hong Kong dollar, the absence of good and services tax, and a flat profit tax rate of 17.5 percent for company operations based in Hong Kong translate into hefty financial gains for multinational corporations. Also, the Hong Kong based companies gain from the provision of re-invoicing.

Re-invoicing involves international trading between the buyer and seller companies through an intermediary company based in regions that exempt tax on import and export processing. The companies that want to trade goods and services from abroad to China or vice versa set up an intermediary company in Hong Kong, which invoices the buying or selling price at higher than the original production costs. This way they are able to show reduced or zero profit margins while at the same time masking the original procurement costs. Reduced or zero profit margins as recorded by the intermediary company allow it to retain maximum profit margins while minimizing the profit tax. The financial gains are substantial especially for the foreign firms keen to trade in goods and services in Chinese markets.