Hongda Review

Hongda is a corporate services provider located in China and targeted towards foreign investors and business owners. Since 2007, it’s supported entry into the Chinese market and compliance efforts from its headquarters in Shenzhen. Alongside its base in Shenzhen, it has regional hubs in Hong Kong, Shanghai, and Guangzhou.

Primarily, Hongda focuses on supporting market entry and compliance, with services like company establishment, bank account opening, tax optimization, HR, and payroll management services. Some of its listed clients include Daniel Wellington and Lenovo.

In this Hongda review, we’ll cover its core services, how it supports its clients, and the pros and cons of working with this company to facilitate your business efforts in China.

Hongda’s Key Services

Hongda’s website states that it’s a business services firm focused primarily on the Chinese market. It promotes itself as a partner in helping investors and businesspeople negotiate the unique challenges presented by the tightly controlled Chinese corporate ecosystem. Hongda’s core services include:

Company Formation

Hongda’s biggest service is support for entry into mainland China through an array of end-to-end company registration packages. These include filling out all the necessary paperwork, multi-agency filings, and hands-on guidance for managing every step. The goal is for clients to receive a legal entity that’s ready to trade with all the necessary compliance procedures in place. According to its “Complete China Company Registration Package”, it’s a service designed to take the bureaucracy out of your hands when creating entities like the Wholly-Owned Foreign Enterprise (WFOE).

Although its Chinese entity formation services are its flagship service, it does serve some other jurisdictions targeted at popular tax optimization jurisdictions. Some of the locations listed include the British Virgin Islands, the Cayman Islands, Hong Kong, and Singapore. Note that not all its jurisdictions include the same level of support.

It seems most of these other jurisdictions are designed for groups looking to create a global holding or regional structure in conjunction with their Chinese operations. 

Human Resources Outsourcing

Taking advantage of a local Chinese workforce is often a priority for companies to tap into the country’s infrastructure. Hongda offers a fully outsourced HR service, enabling firms to meet all the necessary compliance requirements involved in managing local workers. Additionally, it even provides headhunting support, allowing companies to source talented candidates at every level in the corporate hierarchy.

Hongda also acts as an Employer of Record (EOR), allowing firms to hire and manage staff without hiring a local entity at all. This fuels companies looking to achieve faster market entry and compliance without the same barriers of creating a company on the mainland first.

Accounting and Tax Services

Hongda pairs its HR outsourcing services with support for finance and tax compliance while operating in mainland China. These include the standard monthly tax and bookkeeping declarations companies are required to make, as well as payroll administration and targeted support for annual audits.

In particular, Hongda orients itself as a China-specific compliance partner, with support for systems like the Fapiao invoice system that’s native to China. This service can help you reduce the risk of doing business here, as costly missteps can result in trouble with the authorities. With a fully bilingual team, you’ll receive all the necessary information both in Chinese and English, allowing you to make the best decisions for your company.

Alongside traditional accountancy services, Hongda offers a series of add-on services, including broad yearly maintenance and risk-management services.

Other Services

Hongda allows companies to create bespoke packages that go beyond their core offerings. Some of the other services foreign-owned entities can take advantage of when partnering with this company include:

• Visa Processing: Hongda acts as your partner for applying for work permits, Z-visa invitation letters, residence permits, and work authorizations. They’ll help you fill out the required documents and guide you through managing each step in the process to streamline your timeline.
• Trademark/IP Registration: China’s first-to-file system differs from the West’s system of dealing with trademarks and intellectual property. Hongda helps safeguard your brands by conducting trademark searches and filing the necessary applications to protect your brand, as foreign trademarks aren’t automatically protected under Chinese law.
• Special Industry Licenses: Companies engaging in protected activities will need to acquire the relevant special industry licenses to do business legally. Hongda maps out your requirements and then handles filings to help you operate with peace of mind.
• Bank Account Opening: Hongda supports businesses in opening corporate bank accounts post-incorporation in both mainland China and Hong Kong. Some of the functions they support include preparing documents and negotiating Know Your Customer (KYC) checks. They’ll also make targeted recommendations for getting approved for different types of accounts.
• Registered Address Services: If you don’t have a physical location in China, Hongda can provide you with a registered address service. This also comes with company secretary support. Note that both are typically required for incorporation in Hong Kong.
• Company Dissolution: Dissolving an existing entity and leaving the market is as important as what you do to incorporate your company. Hongda performs the deregistration and formal closure processes on your behalf to avoid penalties, including tax clearance.
• Document Management: Following China’s accession to the Apostille Convention, the rules have changed on dealing with official documents. Hongda is familiar with the apostille legalization process and can connect you with authorities on the mainland, Hong Kong, and in Macao to help you translate and legalize any official documents, when necessary. 

Hongda Support

Hongda is primarily based in Shenzhen, which borders Hong Kong. Its contact page lists a full address and a phone line. You can also fill out a web form and schedule a formal consultation with one of their representatives. Additionally, they also have listed office locations in regional cities like Beijing, Guangzhou, and Haikou.

One of the standout support options is that some of their regional offices even have the option of setting up in-person meetings. Moreover, you’ll find their WeChat contact on the site under “HongdaBusinessServices”, which allows for instant messaging.

Resources

Hongda provides advice for free to current and prospective clients via its blog. The company positions itself as the expert on setting up and running a company in mainland China. Some of the topics it covers include setting up a WFOE, tax updates, accounting requirements, common bank account issues, and working with an EOR.

The website also contains a Resource Library that includes downloadable checklists and step-by-step guides, including its “China Work Visa Checklist.” With so few global companies aimed at Western companies looking to break into China, Hongda is one of the few to demonstrate this level of expertise.

Hongda Pricing

Hongda follows the same pricing structure as other corporate services companies in that quotes are bespoke. You won’t find a standardized rate card on its website, as costs will depend on a range of factors, including: 

• The services you use
• Size of your business
• Business structure
• Scope of engagement

Instead, potential clients are asked to set up a free consultation with one of their representatives. These can take place online and, in some regional offices, in person. This allows quotes to be tailored to your specific needs, ensuring you’re only paying for what you actually need. The downside is that this makes direct price comparisons difficult.

Hongda seems to understand this issue, which is why some of their blogs have provided some representative examples. For example, one of its blogs mentions a comprehensive WFOE formation package, which it prices at $5,600. This particular package also came with a time-limited offer of one free year of bookkeeping. In contrast, it quoted a Hong Kong registration and international payment account setup at just HK$980.

Hongda Pros and Cons

Due to the company’s range of services, there’s a lot to offer, but not every company is suited to your goals. That’s why it’s crucial to assess both the upsides and the downsides before working with any provider. Here’s a breakdown of the main pros and cons of working with Hongda:

Pros 

• China-Focused: China’s market is enormous, but it’s highly regulated and challenging to break into as a foreign company, with compliance requirements that can often be incredibly confusing. Teaming up with a specialist like Hongda simplifies this process and helps you enter this market and maintain your compliance with minimal hassle.
• Comprehensive Services: Hongda does so much more than just help you set up your company. It also offers a plethora of other services, including annual audits, trademark registration, bank account opening, HR outsourcing, and special industry license acquisitions.
• In-Person Meetings: Although this company primarily deals with its clients online, some of its regional hubs claim to provide the chance to set up in-person meetings. For investors and businessowners physically located in the country, this is one of Hongda’s unique selling points.
• Local Authority Interactions: China’s business culture involves frequent interactions with local authorities. Hongda acts as your front, handling every interaction with China’s various government departments, which eliminates both the language and procedural barriers.

Cons 

• No Comprehensive Pricing: Sometimes, Hongda posts examples of its prices, but these are nearly always tied to special promotions. Quick pricing comparisons are impossible, since Hongda forces you to schedule a consultation with them first to receive a quote.

Unique Selling Point

The main selling point of Hongda is the fact that it’s one of the few reliable providers that concentrates entirely on mastering entry and compliance within the Chinese market. Foreign businesses wanting to get into this market, whether as a WFOE, Representative Office, or Joint Venture, will find a reliable China-specific partner in Hongda.

 Furthermore, Hongda manages practically every service you’ll ever need to run your company under one roof, with entity formation, HR and payroll outsourcing, license acquisition, visa applications, and work permit processing. This gives you peace of mind that you’re in full compliance without worrying about the language, cultural, and procedural pitfalls presented by mainland China. 

Overall Assessment: Hongda

Hongda’s singular focus on the Chinese market is its strength, and its corporate services catalogue helps you deal with one of the most complex regulatory environments in the world. China has so much to offer economically, but trying to enter the market alone is basically impossible.

Hongda’s services mitigate the operational burden and support your activities for the long haul. Despite this, Hongda’s expertise typically stops at China’s borders, meaning multi-jurisdiction operations will need to fragment their corporate services partners to support their worldwide operations. 

In any case, Hongda’s limited publicly available pricing is relatively fair, and the long-term value they offer far exceeds the initial investment, making it a strong choice for those looking to make their mark in mainland China.

To compare against another global expansion partner, get in touch with MSA for a quote on our Asia expansion options. 

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