Many sellers who do cross-border e-commerce have heard this phrase before:

“You're definitely at a disadvantage tax-wise when you use a mainland company for everything.”

Then went to register a Hong Kong company, and after registering found -

How do the two companies work together? Where does the money come in, where does it go out, and how does it end? Where do the profits go? What about taxes?

All unknown.

Today's article, from the principle of the “two-major structure” this matter from the hands-on clear.

If you have registered a Hong Kong company but don't know how to work with a mainland company, or are preparing to put up a dual entity structure, you can contact us now - for a free diagnosis of your capital link and tax structure.

📞 Cell phone: 18676749275 ｜ 💬 WeChat: qcygscszk

01 Why do cross-border sellers need dual subjects?

Let's look at a typical problem scenario first:

You use a mainland company for Amazon, and all payments go back to the mainland company's public account. That's when you find out:

• The platform is paid back in dollars, and there is an exchange loss when you settle the money back.
• Mainland companies have to pay25%corporate income tax
• Profits want to stay overseas to continue to stock up, but have to go back to the country before going out, a back and forth loss of two times
• Lack of a compliance path for cross-border movement of funds, with banks asking “What is the nature of your money?”

The dual-principle structure addresses the core problem: keeping money in the right place and taking the compliant path back.

02 What does a standard two-body architecture look like?

The most commonly used two-body structure for cross-border sellers:

Mainland companies (procurement + export customs clearance)   

↓ Exports of goods 

Overseas platforms (Amazon/TikTok/NOON, etc.)

↓ Sales returns (USD/EUR/HKD) 

Hong Kong company (taking on overseas income + multi-currency collection) 

↓ Compliance settlement/profit repatriation

Mainland companies (repatriation of funds + domestic tax returns)

Mainland companies are responsible:

• Procurement of goods
• Export customs clearance (9610/9710/9810)
• Domestic tax returns
• Employee social security, office costs

Hong Kong companies are responsible:

• Revenue from sales on overseas platforms
• Multi-currency receipts (USD/EUR/GBP, etc.)
• Signing of international trade contracts externally
• Compliance to apply for offshore exemption (reduced tax liability)

The logic of the two sides is that goods are exported from the Mainland and money is collected from overseas, and each side does what it does best.

📞 If you're still not sure which architecture is right for your business, contact us - a professional consultant will help you design a solution 1-to-1.

📞 Cell phone: 18676749275 ｜ 💬 WeChat: qcygscszk

03 How do profits get from Hong Kong compliance back to the Mainland?

This is the most asked and most common question that sellers get wrong.

There are three main legal routes for Hong Kong companies to return their profits to the Mainland:

⚠️ Three common mistakes:

1. Direct transfer of money without trade background - Banks will question the nature of the funds and, in serious cases, freeze the accounts.
2. No contracts and vouchers for service charges - Mainland tax authorities do not recognize it and cannot do cost deduction
3. No ODI filing for profit sharing - Funds cannot be brought into the country in a compliant manner, and individuals receiving dividends may be recognized as tax evaders

04 3 Pitfall Avoidance Points for Dual Body Architecture

Pit 1: Mixed business of the two companies and no separation of accounts

Some sellers think that “it's my company anyway”, and the mainland company directly collects the payment from the Hong Kong company, or the Hong Kong company pays the suppliers for the mainland company.

This is called “mixed personality” in the law, once the dispute, the legal responsibility of the two companies can not be divided, but also be recognized by the tax bureau as anomalous related transactions.

The right approach: Each of the two companies keeps separate accounts, and money transactions must be contracted, documented and reasonably priced.

Pit 2: Unreasonable pricing, recognized as profit shifting

What is the purchase price for goods purchased by a Hong Kong company from a Mainland company?

• Setting too high → Hong Kong company has no profit → Inland Revenue Department questioned that you are transferring profits to low tax areas
• Setting too low → Inflated profits of mainland companies → Overpayment of 25% EIT

The right approach: Transfer pricing needs to comply with the “independent transaction principle”, i.e. the transaction price between the two companies should be close to the market price. We can help you analyze the transfer pricing and find a reasonable range.

Pit 3: Only registered a Hong Kong company without building a complete link

Many sellers registered Hong Kong companies, opened an account, and then ...... there is no then. Mainland companies still collect money directly from the platform, the Hong Kong company has become a setup, and every year you have to pay the annual review fee.

The right approach: Registering a Hong Kong company is only the first step, but also need to complete: platform collection account switching → business contract re-signing → capital path re-planning → both sides of the accounts system construction.

📞 If you have registered a Hong Kong company but have not used it, or there are problems with the structure that need to be rectified, contact us - one-stop completion from registration to structuring, so that the double main body really run.

📞 Cell phone: 18676749275 ｜ 💬 WeChat: qcygscszk

05 What kind of seller is best suited to ride a double body?

06 What Enterprise Finance can do for you

The dual entity structure is not a matter of registering two companies and calling it a day, but at its coreAllow funds to flow between the two companies in a compliant manner while achieving tax optimizationEnterprise Cai Ying has over 10 years of experience in this area. Enterprise Caiying has more than 10 years of practical experience in this area:

① Architecture Diagnosis and Planning: Design the optimal dual-principal architecture solution based on the size of your business, the layout of your platform, and the flow of funds. Not everyone needs the same architecture - we diagnose first, then come up with a solution.

② Hong Kong company registration + account opening one-stop: 3-5 working days to complete the registration, bank account opening covering HSBC / BOC / Standard Chartered / Overseas Chinese / virtual bank multi-path, according to your capital size and platform needs to match the optimal program.

③ Financial linkage planning: From platform payback → Hong Kong company receipts → compliant settlement / profit remittance back to the mainland, helping you plan every step of the capital path to ensure compliance, high efficiency and optimal cost.

④ Transfer pricing analysis: Pricing of transactions between mainland companies and Hong Kong companies, helping you to find a compliant yet reasonable range to avoid being recognized as profit shifting.

⑤ Establishment of a dual-accounting system: Agency bookkeeping for mainland companies + Hong Kong company audit and tax return, both sides of the accounts are independent, clear transactions, and can withstand scrutiny.

⑥ ODI filing agencyIf you need to repatriate your Hong Kong company's profits to the mainland, ODI filing is a key step. Enterprise Caiying provides ODI filing full-process agency services. The following are some of the ODI filing cases.

Why choose Enterprise Finance?

🔹 1. Hong Kong domestic licensees
Enterprise Cai Ying in Hong Kong has3 TCSP Licensed Secretary Licenses,1 self-employed accounting firmup to4 business secretarial firmsAll registrations, annual reviews, audits and tax returns are completed in compliance with the licensing framework.

🔹 2. 400+ experts team with deep experience in the field
Gathering lawyers, certified public accountants, tax accountants and cross-border consultants, the core members are practicing in the field on average.8-15 yearsAnnual processing10K+ Hong Kong CompanyEstablishment and maintenance cases.

🔹 3. Green channel for bank account opening
With HSBC, Standard Chartered, BOC, etc.10+ mainstream banksDirect cooperation, account opening pre-assessment + face-to-face counseling + green channel, the pass rate is much higher than applying on your own.

🔹 4. Digitized system “E-Tron” for full visibility
Spending tens of millions of dollars on self-research, real-time progress tracking, AI risk warning, from registration to annual review of the whole process transparent and controllable.

🔹 5. 500,000+ enterprises trust, 10 years of industry precipitation
Founded in 2015, the cumulative serviceOver 500,000 businessesThe founder is the chairman of the executive committee of the Finance and Taxation Experts Committee.

🔹 6. Full-cycle accompaniment, one-stop hosting
Full life cycle services from architecture diagnosis to registration, account opening, annual review, audit, transfer pricing, ODI filing, offshore exemption application.

A two-body architecture is built once and benefits for years. But build it wrong, and it's more trouble to fix than to start from scratch.

If you are already using a Hong Kong company but are not sure if the structure is compliant, or are about to register but don't know how to get hitched, feel free to contact us to talk about your situation first:

📞 Cell phone: 18676749275 ｜ 💬 WeChat: qcygscszk