[Cantab]

Morning everyone,

Not sure if I've already answered all of my own questions with the links below but of course would love some 'first hand experience' of non-Hongkongers opening/taking over a SME in Hong Kong.

I'm currently in Hong Kong on a UK passport / tourist visa. Wasn't looking to do anything other than have a 6 month holiday and chill out in Wanchai. However, opportunities do come up from time to time and a friend (long standing) has offed me the chance to take a 50% stake in their smal company here in HK. I've checked over the books and levels of business and am happy with what I see.

I've suggested that instead of transfering 50% of the current company to me, we set up a new company jointly and start again, transferring all current business to the new company while previous financial commitments are retained by the old company and the old owner. We are both happy with this set up.

I've had a look about for info on registering a business in HK and it all looks fairly simple.

** Do I need to go out and come back in on a business visa or will I bo ok on my tourist visa (doubt it)

** For those with experience in this field, can you offer anything that isn't included in the links below?

** Am I missing something?

** All advice gratefully appreciated

Linkage 1
Linkage 2
Linkage 3

Charlie

[KnowItAll]

>> ** Do I need to go out and come back in on a business visa or will I bo ok on my tourist visa (doubt it)

No. You can open a company here in HK without a problem.

We have a couple of articles on http://www.geofinance.com (the site is far from complete... the articles are online though)

[Cantab]

Very good KIA..thanks for that

[JAherbert]

a few comments:

1) don't go into business with friends

2) Dont accept 50%, with nobody in total control, conflict is likely and with only 50% share either party can't really take the biz forward without agreement of other party = more conflict.

you can construct separate earnings and ownership spilts that is fair and avoids 50/50 impass.

3) only sign up if clear exit plan is identified, e.g. if one party wants to quit, how is the 50% sold off? to a stranger?

4) Although everything might be rosy now, relationships change overtime. Agree exit valuation protocol before buying.

Okay you dont want to leave today, but later you might and will you get a fair price for your share?

could be simple 3 x average three year profit or other system. Include a system for review overtime in the deal.

Personally, I would never buy into 50%.....51% is many times more secure.

my 2 cents

[Lammarite]

Originally Posted by JAherbert

a few comments:

1) don't go into business with friends

2) Dont accept 50%, with nobody in total control, conflict is likely and with only 50% share either party can't really take the biz forward without agreement of other party = more conflict.

you can construct separate earnings and ownership spilts that is fair and avoids 50/50 impass.

3) only sign up if clear exit plan is identified, e.g. if one party wants to quit, how is the 50% sold off? to a stranger?

4) Although everything might be rosy now, relationships change overtime. Agree exit valuation protocol before buying.

Okay you dont want to leave today, but later you might and will you get a fair price for your share?

could be simple 3 x average three year profit or other system. Include a system for review overtime in the deal.

Personally, I would never buy into 50%.....51% is many times more secure.

my 2 cents

All very, very true. Point number 1 being the most important one.

[kostas]

Agreed.. I have seen friendships going up in smoke because of business..

[Cantab]

Thanks for the information guys.

Things have moved on since my last post and the new company has been just about registered, financial splits, shares and all have been sorted amicably.

My next issue, and this is one I have received mixed responses to is:

I am a British passport holder currently in HK at the start of my 180 days. I understand that an ID card granting permission to stay is a fairly easy formality however as I will also need to physically work in HK, rather than watching TV while the money flows in, getting an ID card with permission to work could be a little more difficult!! Is this true? Would I have to sponsor myself?

Possibly the biggest concern for me is that I do not possess a degree, only 21 years of almost uninterrupted employment.

Can I own a company in HK and not be permitted to work here? Full registration and such will not be complete for a few more working days so I don't really want to prostrate myself in front of immigration until this is all sorted.

Any advice?

[KnowItAll]

You do not need to be a resident here to own a company in Hong Kong. Hong Kong is a well known offshore location.

http://www.geofinance.com/business/c...any-formation/

Immigration permissions are easy if someone is sponsoring you. Not that easy if it is a self sponsored case.... never hurts to try.

[Cantab]

Cheers KIA,

As all of the business i shall be carrying out shall be in HK (it's an education centre), is offshore still an option for me?

I've just been through immigrations website for the 1,000 time and it still states that i am barred from 'joining in any business' unless on a relevant visa. This goes against everything people on here and others have told me before.

I'll have to call them again when they open at 8:45.

My partner (and company secretary) is a Hong Konger and he thinks that we can do it on my 180 days.

[babu]

Joining a business is not same as owning a business.
But owning a business does not confirm the right to work for the business. If you want to work, then you need to apply for work visa.
Depending on your experience and knowledge, you may get one. No guarantee.