Is dropshipping legal in Hong Kong, and do I need to register and pay tax?

In short: dropshipping from Hong Kong is legal, but you are the seller and must register and handle tax like any online business. In dropshipping, you sell goods you do not hold. When a customer orders, a supplier ships directly. Legally you are still selling goods to the customer and buying them from the supplier, with a margin in between.

Registration and tax:

• If you run the business from Hong Kong, register under the Business Registration Ordinance (or incorporate a company).
• Profits are your selling price less your supplier price and other expenses. Whether they are taxed in Hong Kong depends on where the profit-producing operations took place, applying DIPN 21 and DIPN 39. Goods never touching Hong Kong does not settle the question.
• Sales and purchases go through the books at gross amounts.

Responsibilities that do not move to the supplier:

• Accurate product descriptions under the Trade Descriptions Ordinance.
• Delivery times and refunds to the customer.
• Product safety and any licence needed for the goods.
• Customer data protection.

Customs duty and import taxes in the destination country depend on the shipment, so check how the supplier handles them.