The 2019 Development Plan Outline for the Guangdong Hong Kong Macao Greater Bay  Area has been released. In the construction of the Guangdong Hong Kong Macao  Greater Bay Area, Hong Kong has the economic system advantages of "one  country, two systems" and international integration, providing important  support for the country's construction of a modern and open economic system  that is in line with international standards. I believe that under the guidance  of the Guangdong Hong Kong Macao Greater Bay Area strategy, the number of registered  companies in Hong Kong will further increase.

According to the Hong Kong Companies Ordinance, Hong Kong companies are required  to do accounting and tax reporting within the prescribed time. What are the  advantages of Hong Kong companies doing accounting and tax reporting?

Beneficial for the long-term operation of the company
 One of the necessary conditions for Hong Kong companies to operate in the long    term is to truthfully and accurately keep accounts and report taxes. According    to the Hong Kong Companies Ordinance, Hong Kong companies that do not meet    zero declaration requirements must promptly keep accounts and report taxes    upon receipt of tax returns from the Inland Revenue Department. After the    official implementation of the CRS system in Hong Kong, tax management has    become more stringent. More severe penalties will be imposed on Hong Kong    companies for failing to truthfully report and file taxes.

Beneficial for bank financing
 As one of the international financial centers, Hong Kong has a well-developed    financial services industry. In recent years, using Hong Kong to establish    companies as settlement and financing platforms has become a trend. If Hong    Kong companies operate well, taking advantage of the relatively relaxed credit    conditions of bank trade financing can play a huge role in alleviating the    pressure of tight cash flow for domestic enterprises and reducing financial    costs.

However, in the process of bank financing, it is very important for Hong Kong  companies to handle accounting and tax reporting normally and have a good reputation.  The Hong Kong company has three consecutive years of tax audit reports, and  it shows that the Hong Kong company is profitable, which is beneficial for  the credit review of Hong Kong banks.

Beneficial for Hong Kong immigrants
 In fact, immigrating to Hong Kong is not difficult. As long as one meets the    basic requirements for Hong Kong talent immigration, there is a chance to    successfully immigrate to Hong Kong: that is, the Hong Kong company has a    physical office address in Hong Kong and has Hong Kong employees. Of course,    maintaining a good operational status for Hong Kong companies is crucial,    so truthful accounting and tax reporting by Hong Kong companies is beneficial    for Hong Kong immigrants.

Beneficial for opening a letter of credit
 Hong Kong companies conduct annual accounting audits, which is beneficial for    opening letters of credit. Banks will provide audit reports to review the    customer's philosophy when issuing letters of credit, and based on this,    decide to issue credit limits to customers.

Beneficial for the company's listing
 The Hong Kong capital market has always been a bridge connecting mainland enterprises    with the international capital market, and an important window for mainland    enterprises to go overseas and face the world. Many mainland and listed companies    choose to complete their IPO through Hong Kong platforms. If a Hong Kong    company wants to go public in the later stage, it is very important to truthfully    do accounting and tax reporting.

In summary, compared to domestic companies that do accounting, Hong Kong companies  tend to be more lenient in accounting. However, it should be noted that in  the era of CRS, Hong Kong companies that do not do accounting will face certain  penalties. In severe cases, it may lead to the company's inability to operate  normally and bank accounts being frozen.