5 Costly Mistakes Founders Make When Registering a Company in China, Hong Kong, or Singapore, and How to Avoid Them.
- Roman Verzin
- Jun 19
- 3 min read
Updated: Jul 9
If you’re from Central Asia, the Middle East, Africa, or anywhere labeled “high-risk”—going global isn’t just about having a great product. You must also prove legitimacy to banks, governments, and partners. Otherwise, those hidden traps can cost you thousands and wasted months.
Let’s walk through five expensive mistakes founders commonly make in China, Hong Kong, and Singapore—and how to avoid them.
1. Registering a Company Before Building the Structure
“Let’s open the company and figure the rest later.” That’s backwards.
You need a clear structure before paperwork:
Who are your clients and suppliers?
What is your business model?
Where will money flow?
Example: A founder registered a company in China to import from Southeast Asia and re-export to Kazakhstan, only to find out the Chinese entity couldn’t re-export without paying import taxes. Lesson: Know local trade rules before incorporating.
2. Choosing the Wrong Jurisdiction for Your Needs
It’s tempting to copy what others do—Hong Kong, Singapore, or China—but one size does NOT fit all.
For example, Hong Kong works well as a bridge to global markets. But many Russian founders have struggled since 2022—banks blocked accounts, taxes were unclear, and operations lacked clarity.
Ask yourself:
Does your company need a Hong Kong offshore account?
Is China company formation right?
Or is Singapore company registration more fitting for Southeast Asia?
Choose the jurisdiction that fits your industry, cash flow, and global footprint, not just what seems trendy.
3. Ignoring Local Tax and Compliance
“Hong Kong has zero income tax, right?” Wrong. Even offshore entities must file detailed financial statements—and only get approval about 50% of the time.
In China, importing requires VAT, ICP licenses, and tax audits. Both Singapore and Hong Kong demands annual reporting, corporate tax filings, and sometimes — real local substance. Screw this up and your business won’t survive.
Ensure you understand:
VAT/refund procedures in China
Hong Kong offshore compliance
Singapore corporate tax obligations
4. Hiring Cheap or Inexperienced Agents
A $1,000 agent might sound great—but they might not know the Chinese banks accepted by Amazon or Stripe. Or, worse, they might botch your documents and leave you blocked by banks.
🔍 Vet your agent:
Have they launched a business like yours?
Do they understand your passport’s challenges?
Can they answer compliance and operational questions—or do they just say “no worries”?
If they dodge your questions—that’s your red flag.
5. Assuming a Registered Company Equals a Working Business
Registering a company is just the start—it’s not the destination. Without a solid product, clients, banking relationships, and contracts, you're sitting on a shell company.
Think of it this way:
No clients = no revenue
No bank account = no cash flow
No substance = zero credibility
You need more than paperwork—you need a business engine that runs.
Summary of the 5 Mistakes
Mistake | How to Fix It |
1. Registering too early | Plan your structure and market first |
2. Picking the wrong country | Choose a jurisdiction that fits your business |
3. Ignoring taxes & compliance | Know regulations in China, HK, Singapore |
4. Using cheap agents | Work with experienced, culturally aware advisors |
5. Believing a company = business | Build substance—product, clients, banking |
Final Thought
Start with strategy, not registration.
If you’re considering company incorporation in Asia, take a moment: Are you building a real business, or just checking a box?
If this resonated, share it with another founder in the same position.
There’s always a door to global business—you just need the right key.
Read more about setup a company in Asia: Visit our blog for full guidance
Speak to someone who’s done it before: Book a 30-minute call with our advisors.