Recently, Amazon has comprehensively strengthened the audit of the authenticity of the registered address of Hong Kong companies, and virtual addresses, dependent addresses and "one address, multiple companies" have triggered a large number of store audit rejections and even closures. Behind this compliance storm, is the global tax transparency and platform responsibility to strengthen the dual drive, and "real independent address" has become a Hong Kong company operating Amazon's core threshold, this article for sellers to dismantle the risk and compliance program.

Amazon Address Audit Upgrades, Virtual Addresses Become Minefield

Amazon has upgraded its address auditing system to accurately identify the associated characteristics of "multiple companies at one address", and more than 70% of the "shell Hong Kong company" seals originate from the sharing of virtual addresses;

The previous industry practice of using a virtual address to register a Hong Kong company to open an Amazon store is no longer valid. It has been verified that a large number of sellers were rejected in the second trial stage due to address problems, and the platform clearly recognized that "multiple companies with one address" had "multiple account association risks". This change is not accidental, "Internet platform enterprise tax-related information reporting regulations" after the landing, Amazon needs to quarterly report to the tax authorities seller identity, income and other core information, seller identity authenticity and traceability has become a legal obligation of the platform.

Inaccurate address will trigger multiple operational crises

The use of non-real address not only leads to Amazon registration failure, but also triggers multiple risks such as account number, bank, tax, etc., forming a chain of hidden dangers in business:

• account levelThe same address used by more than one company will trigger the associated freeze, Amazon through a third-party database to compare the address, once a store violation of the "guilt by association";
• Bank levelHong Kong banks will directly refuse to approve the opening of accounts if they find "multiple certificates for one address" through the "Address Tracing System";
• Tax levelThe absence of a separate address will result in failure of the offshore exemption application, and the virtual address is prone to trigger tax verification due to "inaccurate information", and the platform's registered mail signature verification will also expose the address problem.

Amazon's recognized "Real Separate Address"

Amazon recognizes a "Real Separate Address" that also meets the following criteriaLegal Compliance, Proof of Operational Trace, Completeness of Supporting ServicesThree major criteria and multiple addresses need to be consistent:

• In terms of legal compliance, it is necessary to provide an independent lease contract certified by the Hong Kong Cenotaph, rather than a "one address, multiple certificates" agreement, to ensure the exclusive right to use the address;
• Proof of operating traces should provide documents such as utility bills on the landlord's letterhead for the last 3 months, and should show the full name and address of the company to form a chain of evidence;
• The ancillary services need to support physical mailbox receipt, receipt of correspondence slips, and the ability to customize exclusive water signs to respond to field verification.

It is worth noting that the registered address, the address on file with the Hong Kong Companies Registry, and the bank account address must be the same, and proof of change is required for discrepancies.

"Core Advantages of "Separate Address + Hong Kong Company

Hong Kong CompaniesTax optimization and flexible fundingThe advantages, such as the need to build on compliance, and the separate address is a key prerequisite for activating these advantages.

• At the funding level, a separate address is the knock on the door of opening a Hong Kong counterparty account to enjoy the convenience of no foreign exchange control, multi-currency receipts and payments, while a virtual address will be directly rejected by the bank;
• At the anti-risk level, when operating multiple platforms, different Hong Kong companies with independent addresses can realize "subject isolation" and avoid the risk of association with multiple accounts of the same subject, while on the contrary, sharing addresses will magnify the scope of involvement in violations.

How to solve the compliance puzzle

Solutions for sellers at different stages.

1. For short-term emergencies, sellers who have used virtual addresses should first isolate their accounts to transfer funds, then migrate to a compliant address that can provide "proof of the transition period" and prepare materials such as proof of NNC1 change;
2. In the medium term, it is necessary to build a "1+N" address configuration model, with one primary address for core account registration and account opening, and N secondary addresses to realize multi-site isolation;
3. In the long run, a separate address can support tax planning (applying for offshore exemption), brand filing and free flow of capital, laying the foundation for business upgrading.

The operationalization can be done in three steps.

1. Register a real Hong Kong company, choose a licensed organization, the core is to screen the "independent address", to eliminate low-priced virtual address, and give priority to choose a service provider that can provide materials such as CI tax lease, utility bills and so on;
2. Configure a separate registered address, choose a business address that can receive mail and contains a local tax registration number to ensure exclusive one-to-one use;
3. Synchronize and improve KYC information, unify company registration, bank account opening and platform information information, and ensure the consistency of certificates, address proof and other documents.

The upgrading of Amazon's address audit is essentially a signal of the transformation of the industry from barbaric growth to standardized operation. The "real independent address" is no longer optional, but the "life and death line" for Hong Kong companies operating Amazon. Only by taking the initiative to lay out a compliance system can you be stable in the wave of cross-border e-commerce. If you encounter any problems in address compliance, company registration or account audit, please feel free to contact us for professional support and customized solutions.