"Company accounts" and "private accounts", can they be mixed?
2024-9-5
Recently, there is a popular saying in the mainland business community: "If you don't go overseas, you will be out of business." When it comes to going to sea, Hong Kong is of course the port of choice. However, many business habits in the Mainland and Hong Kong are different. Many friends from the Mainland feel confused when it comes to business operations when they come to Hong Kong, a sea port. Recently, our company has also received many inquiries from mainland friends. The most popular question is about "Comapany accounts" and "private accounts".
The general situation in the Mainland is that bank accounts are separated into "company accounts" and "private accounts". Money can only be transferred from company to company accounts, or from private to private accounts. There is no mixture between the two. When the money is transferred into a bank account, there may also be tax issues.
The following are two questions frequently asked by mainland friends and our answers:
Question 1: Can Hong Kong company account be transferred to the private account of shareholders/directors? Answer: In terms of operation, there is no difference between the company accounts and private accounts of Hong Kong banks. Funds can be freely transferred from any account to any other account, and there is no distinction between "company account" and "private account".
Question 2: If you transfer or deposit money into a bank account, do you need to pay tax? According to Hong Kong tax laws, profits tax is calculated based on operating profits, not on income. Therefore, whether funds deposited into a bank account are subject to tax depends on the nature of the transaction (whether it is a business) and whether there is a profit in the end.
In fact, the business culture, customs and tax laws between the Mainland and Hong Kong are quite different. But this may be part of Hong Kong’s business advantages.
Our company has been operating in Hong Kong for many years and is familiar with Hong Kong's business practices and tax laws. Our company can provide customers with a full range of business services, including: accounting, auditing, tax consulting, tax planning, company establishment, applying for government funding, etc. If you have any inquiries about Hong Kong's business regulations and practices, or if you want to go overseas through Hong Kong, please feel free to contact us.
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