On July 1, 2026, the “Regulations of the State Council on Foreign Investment” (State Council Decree No. 837) officially took effect.

Many cross-border sellers think this regulation doesn’t apply to them—”I’m not a big company, and my investment isn’t that large—so what does this have to do with me?”

Article 2 of Order No. 837 states clearly: ”Domestic enterprises, other organizations, and domestic residents may, through capital, assets, equity, guarantees, or other means, directly or indirectly acquire control, management rights, or ownership of assets in overseas companies… This provision shall apply mutatis mutandis to investments in the Hong Kong, Macao, and Taiwan regions.”

These six words—”Hong Kong, Macao, and Taiwan shall follow the same guidelines”—mean that mainland sellers with companies in Hong Kong are also included in this round of regulatory measures.

Many sellers take the wrong first step when entering the Southeast Asian TikTok market—it’s not that they choose the wrong products, but that they choose the wrong business model.

In 2026, TikTok Shop’s Southeast Asia policy underwent a major adjustment: a single business license can now be used to open up to 25 stores across multiple countries, and new stores are exempt from the security deposit requirement for up to 90 days. As soon as the news broke, a large number of sellers preparing to enter the market began gathering materials and submitting applications for review.

But many people don't realize that, among these 25 stores, the versions available to mainland companies and Hong Kong companies are not the same.

Many business owners initially register a Hong Kong company simply for convenience: to receive overseas payments, settle foreign exchange for international trade, receive payments from cross-border e-commerce platforms, or establish a red chip, holding, or overseas business structure.

Don't be so quick to swipe away—I'm not trying to scare you, but it doesn't mean what you think it does.

Decree No. 837 took effect on July 1, and social media feeds have been flooded with posts about it. Some people are claiming, ”We can’t set up Hong Kong companies anymore,” while others are confidently asserting, ”It won’t have any impact.” Neither of these statements is entirely correct.

The real change doesn't happen during registration—it happens when you open an account.

Almost every business owner involved in foreign trade, cross-border e-commerce, or who owns a Hong Kong company has heard of Hong Kong’s 0% tax exemption on offshore income. Many people mistakenly believe that as long as they register a Hong Kong company and engage in […]