On June 18, TikTok Shop’s Southeast Asian cross-border stores underwent a round of systematic policy adjustments.

“One license for 25 stores” and "no security deposit for new stores for 90 days"—these two posts are going viral on WeChat Moments. But what the platform has unveiled this time isn’t just "barriers to entry" for opening stores; it’s a complete set of measures designed to “Ecological restructuring based on the principle of ”lenient entry, strict oversight.”

If you’re still debating whether to use a Hong Kong entity, whether a Hong Kong company can pass KYC verification, or how to repatriate profits in compliance with regulations, this article is for you.

💡 Not sure if your business is large enough to qualify for a Hong Kong entity? Here are three things to consider: ① Can you use your existing entity directly? ② The timeline for the entire registration and account opening process. ③ How to prepare compliant financial records and tax filings to pass KYC verification.

Cell phone: 18676749275 ｜ WeChat: qcygscszk

01 A Point-by-Point Breakdown of the Four Core Policies

This adjustment is not a single measure; only by considering the four policies together can one understand the platform’s true intentions.

Policy 1: Up to 25 stores per license

Rules: A single business entity may operate up to 25 stores in the Southeast Asia region.

Compared to the old rules: Previously, there was a strict cap on the number of single-entity stores, so sellers who wanted to operate a multi-store network had to set up multiple entities and obtain multiple licenses, which doubled their costs.

Direct impact on sellers: Operating costs for the store network have dropped significantly. However, behind each of the 25 stores lie 25 product listings, 25 advertising accounts, and 25 customer service channels—resulting in an exponential increase in management complexity.Having multiple stores isn't a benefit—it's about being able to manage them effectively.

Policy 2: No security deposit for new stores for 90 days

Rules: New stores are exempt from the security deposit for the first 90 days.

Compared to the old rules: Previously, sellers were required to pay a security deposit upon joining the platform, ranging from $400 to $900 per store, which placed a significant financial burden on new sellers in terms of startup capital.

Direct impact on sellers: Startup costs are significantly reduced. With 25 stores at $400–$900 each, you can save $10,000–$22,500 on security deposits alone. But these 90 days also serve as a window for you to validate your product and supply chain—the waiver of the security deposit isn’t meant to let you “open stores haphazardly,” but to help you “test your way toward the right direction at a low cost.”

Policy 3: Full Integration into the Official Logistics System

Rules: The platform has strengthened its requirements for linking to official logistics providers and has fully integrated with J&T’s official warehousing and distribution system across seven countries. Stores that ship orders independently without using official logistics will see their traffic continue to decline. Merchants who integrate with the local warehousing and distribution system will receive preferential traffic allocation.

Compared to the old rules: Previously, self-shipping and official logistics operated in parallel, giving sellers the flexibility to choose.

Direct impact on sellers: Logistics has gone from being an “optional” to a “must-have.” Cross-border direct shipping takes 7–15 business days, while local warehousing and distribution takes 1–3 days—when crunching the numbers, you need to factor in both shipping costs and traffic loss.

Policy 4: Hong Kong Entities Can Benefit from Tax Treaty Advantages

Rules: By establishing a presence in Hong Kong, entities can leverage bilateral tax treaties to reduce the tax rate on the repatriation of cross-border profits and are not subject to the $50,000 annual foreign exchange quota for individuals.

Compared to the old rules: In the past, there was no significant difference in the treatment of Hong Kong-based and mainland-based sellers on TikTok Shop.

When viewed in isolation, this policy has the greatest impact on profits among the entire set of adjustments.

02 Why Was Hong Kong “Singled Out” This Time?

When viewed together, these four policies make the platform’s logic very clear—

Step 1: Lower the entry barrier (25+ stores + no security deposit) to attract sellers.

Step 2: Integrate logistics (official warehousing and distribution) to unify the supply chain.

Step 3: Tiered operational entities. Why is the Hong Kong entity specifically highlighted? Because cross-border settlements for TikTok Shop in the six Southeast Asian countries involve multiple currencies, tax jurisdictions, and foreign exchange control systems. The payment settlement process for mainland entities is inherently constrained by the $50,000 foreign exchange quota, which creates a bottleneck right from the start. Hong Kong entities are not subject to this restriction—The larger your organization is, the more you need a Hong Kong entity.

Let Me Walk You Through the Tax Calculations

• Mainland China: Platform revenue → Domestic company → 25% corporate income tax → Dividends 20% individual income tax → Total tax burden of approximately 40%
• Hong Kong Entity: Platform Revenue → Hong Kong Company → Profits Tax 8.251 TP3T/16.51 TP3T → Apply for a tax credit under the Mainland-Hong Kong Bilateral Tax Treaty → Overall tax burden is significantly lower than the Mainland route

But more importantly:For stores with annual GMV exceeding $1 million, profit repatriation from their mainland entities has already hit the foreign exchange quota ceiling. Either split up the multi-person quota (compliance risk), go through the back channels (which could backfire at any moment), or upgrade to a Hong Kong entity (a one-step solution).

📌 Want to figure out exactly how much you can save on taxes by establishing a Hong Kong entity? Text “Tax Savings Estimate” to receive a personalized tax plan. Mobile: 18676749275 ｜ WeChat: qcygscszk

03 Decided to go with a Hong Kong entity? Three steps to take

If you’ve already decided to set up a Hong Kong-based business on TikTok Shop, the priority you give to the following three things will determine whether you can capitalize on this window of opportunity.

Step 1: First, assess whether your business is large enough to warrant setting up a Hong Kong entity.

• Annual GMV of over $1 million → Go to the main page for Hong Kong, Value
• Annual GMV between $500,000 and $1 million → It’s highly likely to surpass one million in the next 12 months—register now to get a head start.
• Annual GMV of less than $500,000 and no immediate plans to expand → Mainland China is sufficient for now; open a store there first, but be mindful of exchange rate costs and long-term price differences resulting from tax treaties.

Step 2: Register a Hong Kong Company—Don’t Just Settle for a Certificate

TikTok Shop’s KYC review for Hong Kong-based entities is not a matter of “just having the right documents.” There are three mandatory verification items:

Bank account. You must use a business account with a licensed Hong Kong bank; virtual IBANs from third-party payment providers are not accepted. Account opening takes 7–15 business days. Choose a bank with experience serving cross-border sellers, such as HSBC, Overseas-Chinese Banking Corporation (OCBC), Dah Sing Bank, or CBI.

Evidence of business operations. Registered address (either a physical location or a compliant registered address), business contracts, and basic compliance accounting records—the platform isn’t looking for a shell company, but rather a company that shows evidence of actual business operations.

Annual tax filing records. Newly registered companies are not required to undergo a mandatory audit in their first year, but if you want to complete KYC within the 90-day deposit exemption period, we recommend proactively undergoing an audit—the KYC approval rate is significantly higher than for “zero-reporting” cases.

💡 Hong Kong Company Registration + Bank Account Opening + Compliance Accounting,Cell phone: 18676749275 ｜ WeChat: qcygscszk

Step 3: Plan the Profit Recapture Strategy in Advance

After a Hong Kong account receives a payment from TikTok Shop, how can the funds be transferred back to the mainland in compliance with regulations?

• Profit Distribution: Apply for a tax credit under a bilateral tax treaty and remit funds in compliance with regulations after taxes have been paid
• Trade in Services: A Hong Kong Company Pays Service Fees to a Mainland Company
• Trade Reversal: A Hong Kong company purchases goods from mainland suppliers and makes payments as usual.

These three approaches are not mutually exclusive and can be used in parallel. The key isMake sure all the accounts are in order: Bank statements, contracts, invoices, and audit reports—the figures on these four documents all match up.

04 Three Risks That Are Easily Overlooked

Risk 1: Multiple Stores = Multiple Risks

With 25 stores, a violation at any one of them could result in the parent entity being investigated, which would affect all stores. Start by opening 3–5 stores to test the business model, and expand only after operations have stabilized.

Risk 2: Hong Kong Entities ≠ Zero Compliance Costs

Owning a Hong Kong company comes with obligations such as annual renewal, tax filing, and economic substance requirements. A Hong Kong company that does not maintain compliant financial records is a ticking time bomb during TikTok Shop’s KYC re-verification process.

Risk 3: The dividend window won't last forever

The platform’s “singling out” of Hong Kong-based entities is a sign of the current phase. Once a sufficient number of Hong Kong sellers have flooded in, it is highly likely that KYC verification requirements will be tightened.The ones that were processed first have lower KYC standards.

put at the end

“One License, 25 Stores” is TikTok Shop’s ticket to entry for sellers.

However, “lenient entry” must be followed by “strict oversight.” While it’s easy for a platform to let you in, staying on the platform doesn’t depend on how quickly you open a store—it depends on whether your core structure can support the scale of your business, whether your profit repatriation channels are compliant, and whether your Hong Kong company can provide complete operational evidence during the KYC re-review.

The window of opportunity won’t wait. Sellers who want to enter the market through a Hong Kong entity should take action now.

🔍 Assessment of Hong Kong-Based Entities Joining TikTok Shop

Cell phone: 18676749275 ｜ WeChat: qcygscszk

Here are three key points to help you get a clear picture: ① Whether your existing business entity can be used as-is; ② The timeline and costs for the entire registration and account opening process; ③ How to prepare your compliance records and tax filings to pass KYC verification.

Qicaiying: End-to-End Hong Kong Company Registration and Compliance Services

Qicaiying Group has specialized in Hong Kong corporate services and cross-border financial and tax compliance for 10 years, covering the entire process of establishing a Hong Kong entity for TikTok Shop sellers:

• ✅ One-Stop Hong Kong Company Registration — Complete package including company registration, business registration, articles of incorporation, and company seal; 7–15 business days
• ✅ Hong Kong Bank Account Opening Green Channel — Quick corporate account setup through partner channels such as HSBC, Overseas-Chinese Banking Corporation, Dah Sing, and CBI
• ✅ Compliance Accounting + Audit and Tax Filing — Revenue consolidation, expense vouchers, profit accounting, annual audits, and KYC reviews—every check is spot-on.
• ✅ Design of the TikTok Shop Compliance Framework — A closed-loop system comprising a Hong Kong entity, a bank account, and a profit repatriation channel