Having a separate Hong Kong business account is necessary for most business structures and you cannot substitute your personal account for it.
But which bank is the best for opening a business account in Hong Kong? How do you distinguish between personal and business accounts? And can you open a corporate bank account elsewhere apart from a regular bank?
This guide tells you everything you need to know.
Difference between business accounts and personal accounts
The primary use of a business bank account is to help business owners hold and manage money that the business makes.
This includes paying various suppliers and employees, making tax payments, and receiving payments from customers.
There are various types of business accounts, such as:
Business checking account
Business savings account
Certificates of deposits account; and
Foreign currency accounts
On the other hand, personal accounts are meant for managing personal funds. You can use it for paying for any type of personal expense.
Why do you need a company bank account in Hong Kong?
Opting for a business account in Hong Kong has several advantages:
A business bank account lends credibility to your business. This is especially important when you are just starting in a new country. Having a separate account means your customers and clients can directly pay your business instead of routing the funds to your personal account. This makes your business appear more professional.
Business bank accounts offer tax benefits. The account holder doesn’t have to pay any tax on the earnings.
Most banks in Hong Kong allow you to open a multi-currency bank account that makes it convenient to hold, send and receive various currencies from one account.
Since there are no capital control laws in Hong Kong, you can freely transfer the deposits from your business account to accounts elsewhere in the world.
Having a distinct business bank account offers protection to your business assets. In case your business fails to repay its debts, the assets in your personal account remain untouched.
A separate bank account for your business makes it convenient to track expenses, keep an eye on your spending and avoid unnecessary expenditures.
Here’s a roundup of the top 5 options you can consider:
1. Standard Chartered
Headquartered in London, Standard Chartered is a key player in the business banking services sector of Hong Kong.
Type of account offered:
It offers two types of corporate bank accounts: business and priority banking.
Both accounts support 11 major currencies.
Who can open an account?
To open a business bank account with Standard Chartered in Hong Kong, you should be one of the following:
Limited company; or
You are ineligible to open an account if your business is incorporated in a sanctioned country or operates in a prohibited sector.
How long does it take to open an account?
Can take several weeks to months
Minimum deposit requirements:
Account opening fees:
Currency conversion fees:
For receiving payments via telegraphic transfer, the fee is HKD 55. For outward telegraphic transfers, the fee is HKD 200.
2. DBS Bank
Headquartered in Singapore and the recipient of Hong Kong’s best international bank in 2022, DBS Bank is a top choice for businesses in the region.
Type of account offered:
It offers three types of business accounts :
Business Edge; and
Business Edge Preferred
All accounts support 14 major currencies.
Who can open an account?
Any limited liability company, partnership, or sole proprietorship business that’s incorporated and registered in Hong Kong can open an account. However, the business shouldn’t have any corporate directors or partners.
How long does it take to open an account?
Within 2 to 3 working days
Minimum deposit requirements:
HKD 10,000 but no deposit fees for the first three months.
Account opening fees:
Currency conversion fees
No fees if you use DBS Remit, an online overseas transfer service from the bank.
Otherwise, you need to bear correspondent bank charges plus handling and cable charges of DBS Bank.
A virtual Hong Kong business account is an excellent alternative, especially if you are looking for more features and perks compared to what traditional banks offer.
And a fintech such as Statrys fits the bill perfectly. It also supports the remote application process and you can complete all formalities online.
Type of account offered:
Multi-currency business account
Who can open an account?
Any company registered in Hong Kong.
How long does it take to open an account?
Usually, less than 3 days
Minimum deposit requirements:
Account opening fees:
Currency conversion fees
For sending payments, the fee is HKD 75.
For receiving payments, the fee is HKD 55.
As the largest bank in Hong Kong, HSBC is a good option for opening a business bank account. The HSBC business banking division has offerings for businesses in various stages of growth.
Type of account offered:
You can choose from three types of business bank accounts, namely HSBC Sprint, HSBC Business Direct, and HSBC BusinessVantage.
HSBC Sprint account is perfect for newly set up startups whereas Business Direct is more appropriate for growing SMEs.
For SMEs that have been around for a while, HSBC Business Vantage is a better choice.
Who can open an account?
HSBC allows all limited companies, partnerships, or sole proprietorships registered in Hong Kong and carrying out business operations in Hong Kong to open an account.
However, the business should not have any corporate directors or shareholders. But they should have up to 2 individual directors or authorized signatories.
How long does it take to open an account?
Within 3 days
Minimum deposit requirements:
Average account balance of HKD 50,000 for HSBC Sprint and HSBC Business Direct account
Average account balance of HKD 100,000 for HSBC Business Vantage
Account opening fees:
The fees vary depending on the type of business account you wish to open.
Typically, applicants need to pay HKD1,300 as account application fees.
The bank also levies additional fees for inactivity or account closure.
Currency conversion fees
You need to pay additional fees for any currency conversion.
It is usually HKD 65 for receiving payments and HKD 120 for sending payments to any other bank across the globe excluding HSBC bank in Mainland China.
Hang Seng bank, partly owned by the HSBC group, is the second-largest retail bank in Hong Kong.
Type of account offered:
The bank offers two types of business accounts, depending on the type of business entity applying. These are:
Biz Virtual+ account for startups; and
Integrated Business Solutions account for established SMEs
Who can open an account?
The applicant can be an incorporated sole proprietorship, partnership, or limited company.
The applicant should not have any corporate shareholders and must meet the annual sales turnover requirement of the bank. The individual directors and authorized signers should hold HKID.
How long does it take to open an account?
Biz Virtual+ account: 3 business days
Integrated Business Solutions account: 5 business days
Minimum deposit requirements:
HKD 50,000 equivalent or above
Account opening fees:
The fees vary based on the type of business account you open.
Typically, for opening Biz Virtual+ account, applicants need to pay HKD 600 if they do it remotely and HKD 1200 if they do it in person.
For Integrated Business Solutions account, the fee is HKD 1200 for both remote and in-person applications.
Currency conversion fees
Charged based on the amount sent or received.
Having a business bank account is the mark of a real business.
Deciding on which business account is best for your business depends on what you are looking for. Get a thorough understanding of your requirements before you shortlist an option.
To get a complete picture, also calculate the fees you would be paying for every cross-border payment.
If you want to avoid the complicated account opening process of banks, consider a fintech that offers a virtual account.
Get in touch withAir Corporate to set up a remote Hong Kong business account.
What documents do I need for opening a business bank account in Hong Kong?
Every bank follows its unique account opening process and the relevant documents for account opening may vary. Typically, they request the following documents:
Documents that prove your business is legally registered in Hong Kong such as your Business Registration Certificate or a Certificate of Incorporation
Identity and address proof directors and signatories; and
Documents that show business activity, such as a business plan
Can I open a Hong Kong business account remotely from abroad?
Every Hong Kong bank follows a strict procedure for account opening.
While you may be able to submit the documents online, you may still need to go in person to a branch to complete the formalities.
Only a fintech providing virtual business accounts in Hong Kong allows you to complete the entire process online from a remote location.
What is common between opening a bank account, applying for a new mobile phone connection, and signing up for an insurance policy anywhere in the world? You can successfully complete these activities only when you furnish proof of address along with your application form.
The situation is no different in Singapore — whether you want to live in Singapore for work or to study, you need local address proof for opening a bank account or applying for a utility. Even if you intend to carry on business in Singapore, a Singapore business address is a must to comply with the regulatory requirements.
So how do you go about gathering acceptable forms of address proof? Here’s a guide explaining what is an address proof document and what documents can you furnish in Singapore as proof of residence.
What is proof of address and why do you need it?
Proof of address is exactly what it sounds like — it refers to documentary evidence that shows you reside in a particular country.
Both public and private organizations, including government agencies, require this information when you fill up any official forms and use it as a safeguard against any fraudulent activity.
Moreover, it also helps to identify whether the applicant resides in a country with extensive sanctions. For example, the Office of Foreign Assets Control (OFAC) of the US Treasury Department maintains a list of sanctioned countries and prohibits any financial transactions with such counties without prior permission.
While it is impossible to create a comprehensive list of acceptable documents one can use to provide proof of residence, as a thumb rule, most organizations request documents that cannot be falsified easily or obtained dishonestly.
Why do banks need proof of residence?
In the case of banks across the globe, proof of address forms part of the ‘know your customer’ (KYC) documents.
Over the years, the incidents of applicants submitting fake documents to open accounts have shot through the roof. Typically, account holders carry out illegal activities through them. So when you open a bank account, banks have a legal obligation to ask for all KYC documents to verify that you don’t intend to open an account for carrying out any illegal activity such as money laundering or financing terrorism.
In other words, banks need to verify that you are really who you say you are. Documents such as address proof and ID proof make it easier to conduct this check.
Depending on the jurisdiction they operate in, each bank has a list of documents that are acceptable as proof of address. But what may work as proof of address in one country may not work in another. Even the KYC processes followed by different banks in the same country vary.
That’s why it is important to understand what qualifies as proof of residence in a particular country where you need to furnish it.
How to obtain proof of address in Singapore?
Proof of address in Singapore is your residential address within Singapore.
The document for residence proof in Singapore should have your full name and the address where you are currently residing. To get proof of address, you can contact the relevant organization, depending on the type of document you want.
For instance, if you want to furnish your utility bill as proof of address, you can apply for a physical copy of the bill from the relevant utility company. But ensure it is a recent bill, preferably issued within the past 3 to 6 months.
Usually, the organization you are applying to provides detailed instructions on how to go about the process. So if you live where you claim to live, it is relatively painless to obtain proof of residence.
What are acceptable documents for proof of address in Singapore?
Here are a few documents that are usually acceptable as address-proof documents by most organizations in Singapore:
NRIC card of Singapore residents or Permanent Residents
Utility bills, no older than 3 months (some organizations may accept utility bills that are no older than 6 months)
Credit card statement or bank statement
Letter issued by your employer or the institution where you are studying
Letters issued by the Central Provident Fund Board & Inland Revenue Authority of Singapore, preferably within the last 1 year
Letter from a public authority such as a court
A valid passport with an address verified by the Immigration Authority
Letters or bills from other government agencies such as Land Transport Authority or Town Council, if issued within a certain time frame
Tenancy agreement bearing signatures of both landlord and tenant and no older than 1 year
A mortgage agreement that’s no older than 1 year
Make sure to confirm with the relevant organization whether a particular document will work as proof of address. Also, keep in mind that acceptable documents may also vary depending on whether you are filing a form or applying for something online or in-person.
Do businesses need a separate proof of a Singapore business address?
The business address refers to the place from where you carry out your business. If your business is a sole proprietorship or if you have business partners, your home address can serve as your Singapore business address.
This is different from a registered office address which refers to the place where a company’s registers and records are available and communications and notices to the company can be sent/received.
As per the Accounting and Corporate Regulatory Authority of Singapore, at the time of registration of a new business in Singapore, it is mandatory to provide the home address of all business owners and company officers by furnishing any of the acceptable documents for proof of address.
What documents are not acceptable as proof of address in Singapore?
Typically, most organizations are reluctant to accept the following as proof of address, especially if they are furnished alone without any supporting document:
Any identity card issued by any organization without any supporting document
A commercial address
A proof of address that is past its validity period, as indicated by the organization providing it
Invoices for purchasing any goods
Any document that indicates your residence at a different address
A library card issued by your university or college
Photocopies or printouts of certain documents
What documents can a foreigner provide to prove residency in Singapore for opening a bank account?
Banks in Singapore require every applicant to mandatorily furnish documents that include their current residential address to process their account opening application.
If you are not a Singapore national or a Permanent Resident, here are a few documents you can furnish to satisfy the bank’s requirements:
Letter from your employer or the institution where you study
Ministry of Manpower’s In-Principle Approval issued to migrant workers
Certificate of stamp duty
Local utility bills
If you are a foreign business that wants to set up a subsidiary in Singapore, any document that is acceptable as address proof of your local director can help you to open a corporate business account with a local bank.
What happens once you submit the address proof document?
The verification process starts once you furnish an acceptable document. The exact procedure varies depending on the entity to which you submit a document.
Most banks may initiate an automatic check to verify whether you reside at the address provided. It includes confirming the name on the document and determining whether the address in the document actually exists.
If you provide a document that is only valid for a specific time frame, the bank may also confirm whether the document furnished complies with the timeline prescribed.
In case any information doesn’t match up, you may not be able to prove residency. So double-check all the details before you proceed. In the event of any address change, promptly inform the relevant entity so they can update the record to reflect your new address.
Our experts can provide you with all the information you need and help register your business in Singapore in a hassle-free manner. We also take care of the business account opening procedure and guide you about the documents you need to furnish.
So leave your worries aside and sign up with Air Corporate before you take the plunge.
1. I am a foreign company. Can I use my virtual office address as proof of business address in Singapore?
Your virtual office address is insufficient as address proof of your business.
Even though Singapore laws allow you to open a virtual office, a valid registered office address is mandatory, which doubles up as proof of business address. This is a physical location where company records are available for inspection.
2. Can geolocation data work as address proof?
Currently, most regulators in Singapore and elsewhere are reluctant to admit GPS data as address proof, even though it is a faster and more efficient way of gathering information.
Most people associate the term ‘offshore bank accounts with multinational corporations or ultra-rich millionaires carrying out illegal activities such as evading taxes.
In reality, though, offshore bank accounts are a completely legal and valuable way to take care of financial commitments spread across jurisdictions.
So what are the benefits of having a bank account offshore? Do you need to set up an offshore company before you can open an offshore account? And most importantly — which is the best destination for opening such an account?
This guide answers all your questions and also rounds up the 6 hottest destinations for opening offshore accounts in 2023.
What is an offshore bank account?
When you open an account in a country where you don’t live, it is known as an offshore bank account.
For instance, if you live in the UK but open a bank account in the US, it counts as an offshore account.
An offshore company also needs such accounts when carrying out business activities in different countries.
Say, your company wants to do business in Singapore but the company’s principal investors reside in Malaysia. In that case, opening an offshore account in Singapore can help to send and receive payments in Singapore Dollars.
What is the use of an offshore bank account?
Offshore accounts are used for a variety of reasons, including:
Holding and receiving payments in multiple currencies;
Reducing your business tax liability;
Protecting your investments and assets in a foreign jurisdiction; and
Enjoying privacy and security
Is Offshore Company Incorporation Mandatory to Open an Offshore Account?
Setting up an offshore company is only not the only way to start your offshore account.
If you hold investments in a foreign country in an individual capacity or spend a part of the year living in a different country or even provide financial support to someone who lives overseas, you are eligible to open such bank accounts.
Why Choose an Offshore Bank Account?
These accounts make it incredibly easy for their holders to manage financial obligations across countries. One can also benefit from attractive tax incentives that come with maintaining accounts in a different country where the tax system is relaxed.
Offshore account holders earn higher interest rates on deposits when compared to deposits in domestic accounts.
What to consider when choosing a destination for your offshore account?
There are a few things to keep in mind before you decide on your destination.
The economic and political conditions of the country
Ease of setting up the bank account remotely
Availability of internet banking facilities
State of banking infrastructure and privacy laws
Flexibility to sign up for a multi-currency account
The reputation of the financial institution
Requirement of making a minimum initial deposit
Fees payable for making international transfers
Which Countries are Ideal for Setting Up an Offshore Bank Account?
There are several countries that allow you to set up an offshore bank account. Most are known for their business-friendly laws and economic stability.
Here is a list of the top 6 countries to consider, if you are on the lookout:
Switzerland is a popular choice for opening offshore accounts for several reasons.
Swiss banks and financial institutions are bound by strict confidentiality and privacy laws that forbid them from sharing any information regarding someone’s account without consent.
A Swiss bank is not at liberty to share whether a person even has a bank account unless the account holder consents. Illegally disclosing information attracts heavy penalties and a six-month jail term for Swiss bankers.
Swiss markets are tightly regulated which means investors face a low financial risk and better wealth protection.
Switzerland also has a very strong economy and is the most politically stable country in the world, which are added incentive for an offshore company.
2. Hong Kong
If you are looking at the Asia Pacific region for opening offshore bank accounts, Hong Kong is an excellent choice.
Regarded as a leading financial center in the world, Hong Kong offers several advantages to its foreign banking customers.
75 out of the 100 largest banks in the world have a presence in Hong Kong. These banks offer a wide array of financial services to suit the needs of foreign companies.
Even though the banking sector is strictly regulated by Hong Kong laws, there are no restrictions imposed on the outflow or inflow of funds out of Hong Kong bank accounts.
Foreign entrepreneurs can open a corporate bank account in Hong Kong without being present in person — the entire procedure can be completed online. All you need is a local registered address of your company and relevant documents.
Lastly, Hong Kong has an efficient legal system and offers various tax relief measures that attract foreign entrepreneurs to set up offshore companies. And thanks to Hong Kong’s strategic location, an offshore company also enjoys direct access to the Chinese market.
Apart from being a popular tropical destination, the Cayman Islands is also a preferred choice when it comes to offshore banking.
Cayman is a politically stable country with excellent offshore banking facilities which include investment and estate management services.
It is also a tax haven where account holders have no liability to pay any taxes including capital gains tax, dividend tax, income tax, property tax, or company tax. Foreign investments are not subject to any exchange control laws allowing the free movement of funds in any currency.
Germany is a popular foreign banking destination if you are looking at Europe.
As one of the stronger economies in the European Union, Germany is strict about regulating their banking system. German banks occupy the fourth position in the list of the top ten safest banks across the globe, thanks to the safety protocols in place.
The economic stability in the country also makes it a secure destination for parking your funds. Plus, most German banks follow a remote banking system that enables you to open your offshore account without being physically present in Germany.
Belize is considered a premier destination for opening offshore bank accounts.
Banks in Belize are known to offer the highest interest rate compared to what is offered by international banks elsewhere. The account of an offshore company is exempt from any exchange control laws.
The country also has a politically stable environment which is a critical factor for anyone transacting in offshore jurisdictions.
Exemption from the local tax system used to be a major pull for setting up an offshore company and its account in Belize. But due to pressure from Organization for Economic Co-operation and Development, several favorable tax practices have been discontinued.
Regarded as one of the best places in the world to do business, Singapore is a hot favorite when it comes to offshore banking.
Singapore’s government closely regulates the banking system, which makes it extremely secure and stable. Banks provide an array of services to choose from, including financial advice, tax planning, and investment management.
It also offers a stable economic and political environment, which makes it easy for a Singapore offshore company to carry out its business activities.
But Singapore offshore companies may find it challenging to set up an account completely remotely as several banks need the account holder to be present in person.
A newly incorporated company also needs to provide a business plan and demonstrate business interests as part of the account opening procedure.
Setting up a bank account in a foreign jurisdiction can ease the operations of your offshore company and help it thrive.
But choosing the best destination for account opening depends on what works for your business as there is no one-size-fits-all solution.
Want to set up an offshore bank account in Hong Kong? Register with Air-Corporate today. We can set up your offshore company in Hong Kong which includes access to a remote business account.
Is it legal to set up an offshore company?
Incorporating an offshore company is completely legal, as long as it doesn’t engage in any illegal activity.
Offshore companies are business entities created outside of the jurisdiction of the United States. They can be used as an effective tool for avoiding taxes and regulations. They are also used by criminals to launder money and avoid prosecution.
Offshore Companies Pros
1) Tax-Free Income
An offshore company is a legal entity that does not have any physical presence in the U.S. This means it cannot pay taxes or file tax returns, so all its profits are passed on to shareholders without being taxed. The only income that may be subject to taxation is dividends from foreign subsidiaries.
2) Low Cost
Setting up an offshore company is cheaper than opening a traditional bank account. You do not need to open a checking account with a $10,000 minimum balance for example. Most of the time, the tax-free income alone makes it worthwhile to register in another country.
You own your company’s records; they are stored off-site, out of reach of the IRS. There is no way to link you to the company if there is ever a problem.
4) Asset Protection
You own everything about your company – its name, address, bank accounts, employees, etc. No one has access to them except you. If something happens to your company, you lose nothing but time.
5) Ownership Flexibility
You can change the ownership structure whenever you want. For example, you might decide to sell your shares to another person after two years, when their credit score improves.
6) Limited Liability
If you set up an offshore company in Panama, you won’t face personal liability for debts incurred by the company.
7) Business Opportunities
An offshore company is an excellent way to start your own business because you don’t need to worry about complying with complicated local laws. It doesn’t matter where you live, since the company will operate legally anywhere in the world. However, speaking outside of just taxation, why not utilize the benefit of the offshore
However, keep in mind that offshore companies come with some disadvantages too. Generally speaking, the Cons will differ in a case-by-case situation.
Offshore Company Cons
1) Double Taxation
The country where the company is registered will impose corporate income tax on its worldwide income. In addition, the company will be required to report its worldwide income on its home country’s tax return.
The process of setting up an offshore company is more complex than establishing a regular corporation. It requires registering the company with the local government, finding a lawyer, and filling out numerous forms.
3) Compliance Costs
In order to comply with various rules and regulations, offshore companies incur extra costs. These include filing fees, annual accounting fees, and other administrative expenses.
4) Reporting Requirements
Companies must file reports with local governments and financial institutions such as banks. Failure to comply could result in fines or even imprisonment.
5) Lack of Control
Once the company is established, you have little control over how it operates. Any decision made by the board of directors becomes final.
6) High Fees
Fees charged by lawyers and accountants can add up quickly. However, these services are necessary for running a successful offshore company. There are some exceptions where governance aspects of your offshore company can be handled by legal entities such as Hong Kong’s company secretaries which handle all your corporate reporting to the government even if the company is not in Hong Kong.
7) Lack of Transparency
As mentioned earlier, offshore companies don’t have to disclose anything about their owners or operations. They also don’t have much information available online.
8) Non-Resident Status
Non-residents aren’t eligible to serve on the boards of directors of offshore companies. This means that non-resident shareholders may find themselves excluded from important decisions affecting the company.
9) Poor Reputation
Some people believe that offshore companies are used by criminals to hide money or avoid paying taxes. Others think they’re only useful for hiding assets.
10) Lack of Support
Many countries offer limited support for offshore companies. For instance, there are no reciprocal agreements between most countries and offshore jurisdictions like Bermuda, British Virgin Islands, Cayman Islands, Curacao, Isle of Man, Jersey, Malta, Netherlands Antilles, Panama, Seychelles, Singapore, Switzerland, USA, etc.
11) Limited Liability Protection
If you run into any problems while operating your offshore company, you won’t be able to sue anyone but yourself. You’ll lose everything including your personal possessions.
12) You’re Liable for Money Taken Out
Setting up an offshore company doesn’t provide any savings since you still pay tax on your worldwide income. If you want to reduce your global tax burden, you should consider establishing multiple companies instead of one offshore entity. Once you move money out of an offshore location, you will be liable for that income in your home country.
13) Difficult to Operate
The process of setting up an offshore company involves many steps so it might take months before you see results. It requires a lot of time and energy especially if you decide to do it yourself.
14) More Complexity
Offshore companies come with more complexity than domestic corporations. In addition to complying with foreign law, you must comply with foreign tax authorities. Even if the offshore location offers great or even no tax incentives, you still need to report to this country’s tax regime annually.
An offshore company allows you to receive benefits like privacy, confidentiality, asset protection, and ownership diversification without being subject to taxation or financial disclosure. The trade-off is that offshore companies incur fees, costs, and other cons.
However, if you plan to incorporate offshore, then you should know about the pros and cons of incorporating offshore. Every location and jurisdiction is different, and it’s difficult to really know the true efficacy of an offshore company for your business.
Hong Kong is one of the most popular offshore jurisdictions for a lot of companies. If you’re interested in weighing Hong Kong as an option, contact us for more information and one of our experts will walk you through Hong Kong as an offshore incorporation option.
The global e-Commerce market is experiencing rapid growth as global sales are expected to hit $4.891 trillion, marking a 14.3% increase in the previous year.
Many countries have been significantly contributing towards this market growth.
The e-Commerce explosion is largely attributed to the rising use of mobile devices worldwide.
Without the use of mobile applications, consumers and businesses would not be able to buy and sell over the internet so easily.
Now is the best time ever to take your e-Commerce business to the next level as you can now benefit from more advanced technology, streamlined cross-border shipping, and logistics.
A study conducted by eMarketer has estimated that the Asia-Pacific religion will produce over $4 trillion in e-commerce sales by 2024, which will make up nearly 65.9% of the global market e-Commerce sales.
China is currently the world’s largest e-commerce market, contributing to nearly 52.1% of all e-commerce sales worldwide.
China has the biggest portion of global e-Commerce size and sales, but it also has quite a dominant leader as the largest e-commerce market in the world, outranking e-Commerce transactions in the United States, Germany, France, Japan the United Kingdom combined.
One of the main reasons why the e-Commerce market is thriving in China is due to the country’s leading manufacturing industry, logistic infrastructure, and government support.
Internet usage has also dramatically increased amongst the Chinese population as the country currently has more than 800 million users.
Moreover, these 800 million internet users prefer online shopping as more than 70% of China’s internet users had made an online purchase in 2018.
China is also home to the e-commerce giant Alibaba, which has developed efficient systems and networks to process online orders and delivery.
Alibaba has a huge network of delivery which allows the company to process up to 30 million items each day.
Japan is one of the largest and fast-growing e-Commerce markets globally, contributing to the global growth rate of the e-Commerce market by 29%.
The Japanese e-commerce market generated total revenue of US$114 billion in 2020, putting the country right behind the United States.
The e-Commerce market in Japan has been traditionally dominated by business-to-business transactions.
However, there has been increasing growth in online sales of physical goods within the business to the consumer market.
The consumer-to-consumer market is also expected to grow as demand for digitally distributed services such as travel tickets continuously increases.
JP Morgan has also estimated that e-Commerce sales in Japan will continue to expand at an annual growth rate of 6.2%, and the total market revenue is expected to reach $143.297 billion by 2025.
Japan has constantly been ranked as one of the top 5 largest e-commerce markets in the world due to its rapidly growing developed economy, urbanized population, and high internet penetration rate, which applies to both the younger and older population.
Singapore has a high tax rate and a requirement for a resident director for a company that can serve as a disincentive to start an e-Commerce business.
However, many other aspects make Singapore a rapidly growing financial hub in South East Asia where the e-Commerce gross merchandise value is expected to double to US$ 254 billion, according to the Sync Southeast Asia Report.
There are many opportunities to gain investment from venture capitals in Singapore which incentivize setting up an e-commerce business in the country and has contributed to the boost in the e-Commerce market value.
Another way business owners are benefiting is through the exemptions that may apply to their company depending on its size and revenue, which can lower the corporate tax rate down to 0%.
4. South Korea
South Korea is among the largest e-commerce markets in the world, powered by a population with a 92% internet usage rate.
During the Covid-19 pandemic, GlobalData’s E-Commerce Analytics reported that over lockdown, the number of e-commerce transactions increased by 22.2% in 2020 and are expected to grow in the following year by 25.4% in 2021.
The largest e-Commerce market segments are fashion, sporting goods, toys, cosmetics, and DIY products.
South Korea is also considered one of the top 10 business-friendly and technologically advanced economics globally, which makes starting an e-commerce business in the country an extremely easy and profitable business venture.
5. Hong Kong
Hong Kong has a thriving online market where the market volume for an e-Commerce business is expected to stand at approximately US 11 million by 2025.
You can benefit from many opportunities by opening an e-Commerce business in Hong Kong as you also have access to Mainland China.
Hong Kong is one of the world’s leading digital cities makes it a great place for e-Commerce as the population is heavily dependant on technology and online shopping.
The country also offers a favorable tax system to relieve a huge financial burden in terms of taxes as Hong Kong is a highly popular low-tax jurisdiction
Moreover, the country also has a strong logistic infrastructure to meet the increasing demand for online transactions.
This includes highly developed transportation systems, supply chains, and warehousing, ensuring secure storage and easy order shipments.
Lastly, Hong Kong has an extremely easy company incorporation process which is a huge convenience compared to other jurisdictions.
All you need to do is upload the correct documents and fill in the necessary information on the online application to start your e-commerce business.
6. United States
The United States has been a strong contender in the leading countries for e-Commerce and currently stands as the second largest e-commerce market in the world powered by online giants like Amazon and eBay.
As the most developed market for online shopping, engaging in online commercial transactions to purchase goods and services is a norm for American consumers.
The US is known for its business-friendly environment due to lower-income and corporate taxes, which act as a huge financial incentive for those looking to start an eCommerce business.
Saving up on taxes allows e-Commerce business owners a bigger budget to invest in new software programs and website development to take their online business to the next level.
This is attributable to 97% of the Swiss population using the internet in 2019, making Switzerland the only non-European economy amongst the countries with the highest internet usage.
The E-Commerce Report Switzerland 2020 further highlights that the country is experiencing a strong internet shopping trend as nearly 10 billion Swiss francs were spent online in 2019.
The study anticipates further growth in the years to come.
As the 21st largest e-Commerce market by size and a country quite well-known for its high internet penetration, the revenue generated from the e-commerce market is projected to reach nearly USS 11.6 million in 2021 and is experiencing an annual growth rate of 6.85%.
Germany is another top contender within the e-Commerce market, especially within Europe.
The country offers competitive shipping options that contribute towards business growth and development.
Annual online sales in Germany are estimated at $73 billion, making up 8.4% of the global e-commerce retail sales.
The country is also experiencing a 5.4% growth rate which is skyrocketing its projected revenue.
The leading products within the German e-Commerce market include fashion, electronics, and media.
The global e-Commerce market is a testament to the increase in business innovation, technological advancement, and increased dependence on technology to carry on our day-to-day activities.
This provides a major opportunity for those looking to start an online business as the potential for profit and growth is huge.
Remote businesses have become extremely popular. COVID-19 made it even necessary in some areas.
Not only are they a good option for employees but the business owners as well.
More and more people prioritize setting up their own remote businesses as it gives them more control and flexibility over their lives.
This article provides a complete guide to starting, growing, and managing a remote business.
What is a remote business?
A remote business is one where you work from here.
This working arrangement offers you flexibility as both you and your employees can work from home or anywhere else in the world.
While some businesses can work from home or come into the office, remote businesses have no corporate office and are run completely online.
To run and work for a remote business, all you need is your laptop and a good internet connection.
Why should you start a remote business?
There are many ways remote businesses save money compared to other businesses.
Remote businesses have lower startup costs as there is no rent to pay for office space, utilities, furniture, office supplies, cleaning services, food, and other workplace necessities.
It is also more cost-effective for the employees as they do not have to spend money and time commuting to the workplace.
Again, this aspect saves businesses more money as they no longer need to arrange their employees’ commute.
Improved Quality of Life
Remote working has now become extremely important for employees as they control their own work environment.
This increases their satisfaction and productivity levels as they work comfortably from their home and not from a busy office which can sometimes be distracting.
With absolutely no commute, employees get more sleep and are more energized when they get to work.
From a business perspective, if you have happier employees, you have a team that works well together and works more productively.
Remote businesses have access to a wider talent pool as they are not limited to hiring employees from a specific geographical location.
Therefore, remote businesses benefit from accessing a broader range of candidates who may better fit the company than local candidates.
Reduced Carbon Footprint
In today’s socio-political climate, organizations are under extreme pressure to reduce their carbon footprint and become more environmentally friendly.
It may be difficult for a traditional firm to switch to remote working and do so, so starting a remote business and avoiding that transition period is a huge advantage.
Since there is no office to commute to, a significantly lower amount of greenhouse gases is being produced as a remote business.
How to Start A Remote Business
Starting a remote business is a simple and easy process.
After looking at some of the benefits of starting a remote business, here is what you need to do to get started:
Generate a Business Plan
The first step is to outline a business plan. You need to understand what your business does clearly, the services or products it offers, how it makes money, and its goals.
You need to have a step-by-step plan in place on how you wish to achieve your goals.
Your business plan should also identify clear key performance indicators (KPIs) and any issues you think the business will potentially face.
A good business plan is crucial, as this is what potential investors see when they consider which businesses to invest in.
Get a Virtual Business Address
You will need a business address when you register your business.
This allows you to receive business emails and set up a business bank account.
Since you have a remote business and there is no office, you can use your home address.
Alternatively, suppose you wish to keep your personal information separate from your business.
In that case, you can use a virtual business address through a mailbox service.
Register the Remote Business
After getting a virtual business address, you will need to register your remote business.
Here is where you decide the business name, choose an appropriate business structure depending on how much tax you want to pay, and to what extent you want to be held personally liable.
If you want to learn more about registering a business in Hong Kong, you can look at our article here.
Funding & Managing Costs
Although remote businesses have lower startup costs than regular businesses, a few costs still need to be managed.
This includes website development, website management, marketing, legal fees, insurance, and technological tools.
Remote businesses also come with their own distinct expenses depending on their policies and employee benefits.
If you wish to provide your employees with work laptops and phones, this will be an extra expense.
Additionally, depending on how you want to manage your business, the type of software you use to manage your teams is also an expense.
You could also think about how you can get funding for your remote business through business loans, crowdfunding, or angel investors.
Develop a Marketing Plan
It is extremely important to have a strong marketing plan regardless of your remote business’s type of service or product.
Most remote businesses and startups become unsuccessful as they do not have an audience due to poor marketing.
Firstly, you will need to identify a target audience that will benefit from the product or service you are providing.
Secondly, you need to identify who your competitors are within the market so you can start focusing on setting yourself apart from them.
A good marketing plan outlines the target audience and the steps the business takes to connect with that audience to increase its sales.
Create a Remote Work Policy
The key to a successful remote business is a good remote work policy.
Any disorganization or lack of communication can lead to huge delays.
It would be best if you outlined your expectations from employees in terms of their communication, availability, timings, and responsiveness so every employee can be easily accessed when needed despite working from different locations.
Remote work policies also cover requirements and guidelines for data protection, minimum working hours, and set targets.
Other policies to consider when setting up a remote business include the employee code of conduct policy, employee disciplinary action policy, Bring Your Own Device policies, compensation and benefits policy, travel policies, work schedule policies, and employee complaint policies.
Such policies are important to keep employees and management accountable for their actions, ensure that the business is compliant with all legal requirements, and, most importantly, the expectations of the remote business.
Once Your Remote Business is Set Up
Hiring Remote Employees
Once you have successfully set up a business and created a remote work policy, you can start hiring and finding a team to run your business.
Based upon the nature of your business, you will need to list the roles that need to be filled for the business to operate smoothly.
Once you have identified the roles, you need to think about the skills, competencies, and qualities required from a candidate to perform each role’s duties successfully and responsibilities.
After identifying the type of candidate you are looking for, you will need to write the job descriptions for each role.
Therefore, a job description reflects the company and needs to be written extremely well to attract the right candidate.
You will also need to think of a recruitment process to consider and test each applicant carefully.
After doing so, you need to post your job description on your website or any other job board to advertise the opening.
Develop a Smooth Onboarding Process
When you’ve found the right candidates for your business, you should make sure to have a smooth virtual onboarding process.
Usually, employees find onboarding easier to build relationships in person, which is why you need to make even more of an effort virtually.
To do so, you will need to have all cameras on to create a more ‘face-to-face’ environment and communicate effectively.
This may also include having one-on-one meetings to ensure that each new employee is valued and understands company processes.
Additionally, you should also set up a remote working support group or helpline where the employer can address all concerns regarding onboarding.
Remote businesses have been thriving long before the start of working from home due to the pandemic.
The reason behind their popularity is that they allow business owners to have a better work-life balance, cut their operational costs, generate more profit, and most importantly, allow them to work comfortably in their own environment.
If you are thinking of starting a remote business, this article is for you!
What is a Remote Business?
Before delving into a remote business, we first need to understand what remote working is and how it works.
Remote working is working from home, away from the employer, and outside the office.
In situations where people remotely work, they don’t have to commute to their jobs or sit in an office building all day waiting for the clock to strike five and leave.
There is no central workplace where the employee is located.
Most of the time, remote working means working from home.
This style of working has developed and become more common since the advent of the internet.
Technological advancements throughout the years have also opened a much bigger network for remote businesses.
In today’s world, we conduct most of our meetings online, over the phone through calls and text messages or emails, allowing employees to work efficiently from their positions, even if it is from their couch.
With the pandemic’s last longing effects, remote businesses are increasingly popular and, in some cases, the best option.
Presently many individuals in society are getting on board with the idea of remote businesses.
This growing interest is because working from home allows people to live a much more comfortable life due to a personal and familiar work environment.
They tend to have a better work-life balance, and they do not have to spend their income on any travel costs.
Although you are working from home and might not have access to the resources an office environment provides, there are thousands of different types of remote businesses and remote business ideas doing extremely well.
These remote businesses include:
Social Media Management & Affiliate Marketing
Subscription Box Services
Website Design & App Development
One job that has proven very popular over the years is blogging. Social platforms such as Instagram, Facebook, TikTok have grown and developed substantially over the past few years.
The tools and skills for content creation are much easier to handle by groups of all ages.
The blogging world is providing opportunities for many creators to work from anywhere and anytime.
Whether you are on a trip to Greece or visiting your favorite restaurant in London, individuals can now explore videography, photography and create a blog that acts as an informational website on the internet.
Creators make videos from anywhere and post online, receiving views, likes, and followers, enabling their social media accounts to grow and reach a wider audience.
Therefore, blogging through social media can be a strong source of income when the website or account grows.
Sponsors reach out to social media bloggers and pay them for their content.
Some companies promote their products and services through popular social media bloggers, including skin care items, cooking utensils, travel packages, home decor, and clothing.
Through blogging, the general public is connected to big brands through social media blogs run by bloggers from either the comfort of their home or anywhere else in the world.
The bigger your following is and the more people you can reach through your content, the more brands and companies will want to work for you and the higher your income will be.
Content writing is a great idea for a remote business.
If you love to read, write, and research topics, this is an excellent way to make money while working from home.
Multiple companies hire remote writers to write for their company blogs so that the products and services they offer reach a wider audience and so they can generate more business.
Companies use such specialized content as promotional and informative material on their websites, social media platforms, and blogs.
You can apply directly for remote writing jobs on multiple job boards or create your own website, develop a writing portfolio and reach out to companies yourself!
This is a great remote business idea because there is absolutely no additional cost to run this business.
Of course, you can invest in training or certification to develop your skillset, but it costs absolutely nothing to write an article and send it off to a company.
Another benefit is that you can write and do all your research from home while you sit on your bed with a hot cup of coffee.
You do not have to commute to work at all.
Instead, you can hold meetings over a video conference and email your work once you are through.
Over the past two years, online teaching has taken over in light of Covid-19.
Online tutoring has become very popular as it allows one-on-one teaching and can be done over video conferencing apps such as zoom.
Many individuals find it easier to carry out the teaching online, especially when the student is living thousands of miles away.
For instance, giving online Spanish classes from Spain to someone in the United Kingdom eliminates geographical constraints and provides a larger client base.
It gets rid of commuting and transportation costs, provides a private learning environment and more flexible hours to work.
The resources as well that one would require as an online tutor are minimalistic.
Additionally, many people have started offering fitness and cooking classes online due to the social distancing requirements in their respective countries.
This has become extremely popular as your only cost will be camera equipment, and you do not need to worry about renting a studio or a gym to record your videos.
You can simply conduct a class from your home, garden, or park.
A passion for food is one that many share today.
Preparing food at home and selling it to customers is increasingly popular.
Cooking in your kitchen sounds less pressuring, and taking orders based on your timetable sounds amazing too.
The catering business has shifted from restaurants to homes.
Thousands of individuals who have a passion for food, cooking, baking, or are and out chefs can take advantage of working from home and catering for events or parties.
This creates a considerable financial avenue.
Again, you do not have to rent a kitchen and can easily work on your terms and create the perfect working environment for yourself.
You could also offer a pick-up service as well for small-scale events so that you reduce your transport/delivery costs.
Social Media Management & Affiliate Marketing
Social media is a key part of every business marketing and growth strategy.
Keeping up to date with trends and posting eye-catching content that racks up views, likes and followers is crucial to a company’s business as it contributes to branding and reaches a target audience.
Therefore, the role of Social Media Managers has become extremely important in recent times.
Companies are interested in employing Social Media Managers to oversee their public interactions, provide a positive brand image and analyze customer engagement data.
As the role is extremely social media-heavy, most Social Media Managers work remotely either as an employee of a company or as their own business, offering services to multiple clients.
Social media management can be done anywhere and anytime as long as you are a creative person with a good internet connection and a laptop.
If you are bilingual or fluent in two or more languages, you can easily start a business as a translator.
The world is becoming even more globally connected with companies opening offices in different countries and representing clients from completely different parts of the world.
Here is where translation services are extremely important.
Translators and interpreters are needed across various sectors, including professional services, foreign relations, education, to name a few.
All you need is your laptop and a good internet connection to attend meetings and translate in real-time or send back documents after translating them.
Your only cost there might be some training or certification as it sometimes helps in getting clients.
However, this is only a one-off payment and an investment in your business.
A personal shopper is someone who is paid to help another buy new products.
This assistance can be offered in person by accompanying them to shop or by shopping on their behalf.
Personal shoppers are responsible for recommending products to their clients and then purchasing the ones their clients like.
Therefore, personal shoppers need to understand their clients and recent trends, products, and services that their clients might be interested in.
While personal shoppers can be employed at department stores and boutiques, some work from home and work as independent contractors and have started their businesses.
Most personal shoppers charge hourly rates for their assistance to customers.
If you are affiliated with a business that sells certain products, you can earn a commission for any specific items you help sell.
Being a personal shopper does not require going to work at all, as you can simply carry out all your market research and communications with your client from the comfort of your home.
A subscription box service is a recurring delivery of niche products through product distribution and marketing.
Suppose you plan on offering a subscription box service.
In that case, you can build a stable financial model with a recurring monthly revenue depending on how many customers you have.
The subscription box can range from any theme, including stationery, crafts, toys, beauty products, books, and even funky socks!
All you have to do is create a website and develop a marketing strategy for your service, select and order what items you want to include, package them into a box, start taking orders and send them off.
There’s no need to have an office space, and depending on how many customers you have and how your business grows, you can easily use your room to pack or any other free space at home.
If you are looking to open an online store, dropshipping could be an extremely easy and efficient way for you to do so!
Dropshipping is a business model where you can sell products from third-party suppliers or wholesalers online.
The biggest advantage is that you do not need to worry about storage, warehousing, or managing any inventory or customer orders as it is all done by the supplier.
The main job of a drop shipper is to advertise and create an eye-catching and easy-to-use website that attracts customers.
You can start your dropshipping business by first picking a niche in line with your interests and consumer demands.
Next, try and calculate the potential margins you can earn based on your target audience.
After that, you will have to figure out your branding to stay competitive and set yourself apart from other drop shippers.
Lastly, you will have to name your store and set up the website.
Website Design & App Development
App development is becoming an extremely popular and profitable remote business to start for tech-savvy and innovative entrepreneurs.
If you are an experienced coder and can develop an innovative and unique app, you can start making money as an app developer.
The same goes for website designers and developers, especially in today’s social climate.
Most customers prefer online shopping instead of going over to the physical store, which is why it is crucial for you to have an attractive and easy-to-use website that has a strong online presence and can engage customers.
Registration of a Remote Business
Remote businesses are becoming the new normal with companies cutting back on their office space and focusing more on hybrid working.
Not only are remote business an attractive option for owners as save money in terms of operational costs but they also work for employees as it improves their work-life balance.
There’s no better time to start a business as technology has also made it much easier to communicate with teams and manage workflow.
But that now means that you should start considering which jurisdiction is best for a remote business.
Some jurisdictions are very friendly to remote businesses by also being a remote process of opening a business.
Hong Kong provides many benefits to companies even if they are not located in Hong Kong.
Seychelles is a cluster of islands northeast of Madagascar in the Indian Ocean that is rapidly becoming one of the financial hubs of Africa.
Its economy has grown by leaps and bounds in the last twenty years, and it seems well-positioned to continue to do so.
Part of that growth is a result of conscious and effective efforts by the government to encourage foreign investment.
In particular, Seychelle’s strong privacy laws, territorial tax system, logistically simple laws involving registration and incorporation, and a variety of other factors have resulted in Seychelles becoming an increasingly popular country for companies to incorporate in.
Today, we’ll review the advantages of starting a company in Seychelles.
Shhh – It’s a Secret
Seychelles takes its privacy laws very seriously.
Corporate privacy is protected by law; the public has virtually no right to know anything about your company other than its original director.
Obviously, if you were so inclined, the director could be a figurehead in place for a single day or even hours – just long enough to satisfy these legal requirements.
These privacy laws are not limited to sheltering companies from invasive citizens and the press, either.
Seychelles generally lacks the infrastructure to share corporate data with foreign companies because it doesn’t keep records of this information.
In essence, without a colossal effort, it couldn’t share additional information even if it wanted to.
While there are legitimate reasons to have such information in the public domain, there are also perfectly understandable reasons not to.
For example, if the owner of a company is publicly unpopular for reasons unrelated to his business, there is no particular reason that he should expose his company and minority shareholders to risk by informing the public of his affiliation.
A Territorial Tax System
This tax term sounds more complicated than it is.
In essence, a territorial tax system is one where the host country doesn’t tax you on profits that you make elsewhere.
For example, if you start or incorporate your company in Seychelles, you don’t have to worry about being taxed on profits that you make in the United States or Europe (by Seychelles; the U.S. and Europe have their own tax codes).
There are also virtually no capital gains or interest taxes which can make life simpler (and more profitable) in a variety of ways.
Anyone looking at starting a business should be aware that doing so can involve a lot of red tape.
In China, for example, the government has established so much red tape that foreign companies have little choice but to partner with a local Chinese company and share their technology, trade secrets, and profits.
While this makes sense for the Chinese economic growth model, Seychelles actually takes the opposite approach.
The amount of red tape and government requirements to start a company are very limited.
A single person can start a company and serve as both the director and shareholder.
In fact, the government of Seychelles created the Seychelles International Business Authority (SIBA) specifically to facilitate offshoring and other international business needs.
Additionally, English is one of the official languages which makes it easier for Americans and Europeans to operate.
A key aspect of logistics is infrastructure, and despite its size, Seychelles excels in this area.
It has fiber optic cables connecting it to Eastern Africa, and its public utilities are top-notch.
It’s also located in a logistically ideal time zone (GMT+4), and it has a variety of double-taxation avoidance treaties.
A common concern when looking to invest or operate within Africa are regarding the quality of its infrastructure and its political and economic stability.
None of these are particularly valid concerns when it comes to Seychelles.
Seychelles boast modern banking facilities, political and economic stability, internet banking, etcetera.
Although you’re required to have at least one Seychelles bank account, you don’t have to open this account in person.
This isn’t a temporary pandemic-related rule, either – this is the norm in Seychelle.
Additionally, the government provides a surprising amount of business support, and local legal, tax and logistics firms are relatively inexpensive to hire.
Although the population of Seychelles is small, Seychelles enjoys the highest per capita gross domestic product (GDP) in Africa at over$17,000 per capita.
For comparison, that’s slightly higher than the per capita GDP of Hungary and only slightly lower than that of Greece.
If you’re looking to break into the African market but are averse to political and economic risk, Seychelles is a great place to look into.
Location, Location, Location
Part of Seychelles’ success is due to its location; it’s ideally situated to have access to Europe, Africa, and Asia.
Of course, this means that it’s relatively far away from North and South America – but you can’t be everywhere at once.
On top of that, Seychelles is gorgeous.
It’s actually a popular tourist destination, and that popularity is growing.
Additionally, Seychelles is not considered to be in the threat zone for cyclones or other major natural disasters.
About half of the area of Seychelles has been designated as one form of a national park or another and it’s home to a variety of rare and unique species.
It’s worth noting that although the waters of Seychelles are beautiful, they can be extremely windy.
In conclusion, there are plenty of reasons to start your company in Seychelle.
Even if you’ve already started your company, it may make sense to consider incorporating it in Seychelle.
From favorable privacy laws to an ideal location to logistics, Seychelles is a great place to start, register, or incorporate a business.
Is Seychelles too far-flung for your business needs? Millions of businesses are instead registering in Hong Kong because of the exact same freedoms of Seychelles, but with a more digital-friendly approach.
Register your business in Hong Kong today with Air Corporate and you’ll get approved in under 48 hours for just $90.
Malta is a tiny island nation in the Mediterranean.
It’s got a small economy and, according toThe Tax Foundation, the highest statutory corporate tax rate in Europe.
So why is it becoming an increasingly popular spot for business registration?
There are actually quite a few reasons, but we’ll focus on the top five.
First, the statutory corporate tax rate is somewhat misleading; we’ll show you how it’s possible to pay between 0% and 10% taxes.
It is also cheap and easy to incorporate, inexpensive and profitable to incorporate in, part of the European Union, has low capital gains taxes, and has a variety of double-taxation prevention treaties.
1. The Real Tax Rate
The actual tax rate in Malta can be as low as 0% – but it’s complicated.
A shareholder can be reimbursed for 70%-100% of the corporate taxes paid depending on what type of company it is.
The result is that most businesses have an effective tax rate of 10% or less.
If you’re going to do business in the European Union, you’re going to have to set up shop somewhere.
Malta is part of the EU and has full access to the Eurozone.
Malta is a great choice for the aforementioned tax purposes – you’ll get your foot in the door of one of the biggest trading blocs in the world and save money on taxes at the same time.
Registering in Malta will help keep your Eurozone taxes low… but you’ll still have to pay taxes in your host country.
Just make Malta your home country by incorporating your business there along with registering it.
After all, it’s been a part of the European Union since 2004, so it gives full access to the Eurozone.
Incorporation allows companies to avoid the relatively high tax rates of their host countries while losing few if any benefits.
Additionally, incorporation in Malta is cheap and easy.
The Maltese government has ensured that it’s an attractive option for companies to incorporate.
After all, receiving low taxes is better than receiving no taxes, and even if there are virtually no corporate taxes, run-of-the-mill employees will still be taxed and in general, more business is good for business.
3. The People and Economic Infrastructure
Malta has a well-educated supply of English speakers; English is actually one of the national languages of Malta, and about88% of Maltese people can speak it.
The majority of Maltese people can also speak Italian.
These advantages are obvious; some are more subtle. Aside from solid education, the Maltese people share common western values.
Banking is easy and efficient, foreign cash flow is largely unrestricted compared to in the U.S., Malta is in the Central European Time Zone which is logistically convenient, and its banking and economic services are top-notch.
There are also very favorable logistical and legal frameworks for foreign investments; the Maltese government wants you there.
Many of these advantages are relatively intangible and they certainly aren’t the first things you look for when debating where to incorporate, but they really do add up.
One final note – these laws are all above-board, and Malta is a reputable destination.
There is little economic and political turmoil in Malta that could threaten the prosperity of a typical company, and their stability is backed by the economic and legal clout of the Eurozone.
4. Capital Gains Taxes
Malta technically doesn’t have any capital gains tax, per see.
Instead, there’s a 12% fee exacted from the sale of a given asset.
12% is very reasonable compared to many other countries, including a handful of global financial hubs like the United States, and there are a wide variety of tax breaks and loopholes that can be utilized as well.
5. Tax Treaties
Malta has a wide variety of treaties (over 40) with various governments and entities that help shield companies operating from within Malta from double taxation.
For example, in many cases, host companies tax profits that you make abroad.
If you make $100 million in global profits, that money could be taxed in your host country… and in the countries where you made the profit.
Needless to say, being taxed twice on the same profits isn’t good for a company’s bottom line, but Maltese treaties can help you avoid that scenario.
Companies incorporated in Malta for a reason.
Remember that registration is necessary for any company intending to operate in Malta.
As always, consult legal and tax professionals before making any decisions about the best way to meet your corporate needs
In this case, there are actually quite a few legal and tax professionals available for consultation in Malta that actually specialize in advising corporate clients on things like this.
This can make a relatively painless process even simpler.
Whether you’re looking to break into the European market, looking for tax breaks through incorporation, trying to dodge double-taxation, or just looking for a logistically sound headquarters, Malta has a lot to offer.
Business aside, Malta is also a gorgeous country and a wonderful place to live!
Looking for a more connected city with all the greatest aspects of a Maltese registered entity?
Consider registering in Hong Kong instead and plug in your business to the financial world
Congratulations, you’ve decided to start a company.
But have you thought about where you are going to register the company?
Choosing the jurisdiction for your company has a significant bearing on the overall operations, and this is a decision you cannot take lightly.
The Bahamas has always been on top of the list of founders as a preferred location to register an offshore company for several reasons.
So read on to find out what’s in store for you if you are headed to this island nation.
1. No minimum paid-up capital
The corporate laws of the Bahamas don’t require offshore companies (known as International Business Companies as per the Bahamian laws) to have any minimum paid-up share capital.
This means that you have complete control over how much you want to incorporate a company with, and that amount can be as little as you want.
2. Tax neutrality
Tax benefits are one of the major advantages of establishing a business in the Bahamian economic landscape.
You don’t have to pay any taxes — this includes corporate tax, capital gains tax, income tax, inheritance tax, or sales tax.
You are only liable for licensing fees, property and stamp taxes, and tariffs for imports.
3. Flexible immigration policy
The Economic Permanent Residency offered by the Bahamian Government makes it easy for individuals to work and live in the country.
Individuals who hold a permanent residence card can clear immigration freely and reside in the Bahamas for any length of time.
4. Absolute anonymity
As per the provisions of the International Business Companies Act, 1990, a foreign company can conduct its business in the Bahamas with complete privacy.
Even the names of the shareholders don’t have to be provided to the Corporate Registry.
The companies also don’t have to comply with any annual reporting requirements.
5. No exchange control laws
The offshore companies in the Bahamas are not subject to any exchange control laws.
They are allowed to transact freely in any currency.
However, any dealings in Bahamian Dollars should be approved by the Central Bank.
6. No filings are needed
Offshore companies don’t need to file any statements of accounts.
The only requirement is to maintain the records that set out all the transactions, and the records should be maintained for five years from the date of the transaction.
Companies also have the flexibility to maintain the records outside the Bahamas.
However, the registered agent in the Bahamas should be informed about the records.
7. Flexible rules for appointing a director
Offshore companies only need a single director.
Both corporate and individual directorships are allowed, and the director doesn’t have to be a resident of the Bahamas.
Appointment of nominee directors is also permitted.
The directors are also free to hold their meetings in any location and don’t have to remain confined to the registered office address.
The Bahamian Company Law doesn’t require you to appoint a company secretary either.
8. Bookkeeping is extremely simple
There are no obligations for filing the account or annual returns.
Offshore companies are also not subject to any audit requirements.
9. Shareholder requirements are straightforward
You need to have at least one shareholder.
The shares should be registered, but no bearer shares are permitted to be issued by offshore companies.
You can issue both voting and non-voting shares.
Nominees shareholders can be appointed.
No annual general meetings need to be conducted for the shareholders.
Downsides to incorporating in the Bahamas
Despite the advantages, there are certain challenges you may face when incorporating an offshore company in the Bahamas.
In 2018, the Bahamas passed the Commercial Entities (Substance Requirements) Act 2018 (the “Substance Act”) to prevent “shell” companies from being incorporated in the Bahamas to evade taxation in the home country.
As per the provisions of the Substance Act, requires entities, including International Business Companies, that carry out the following activities to prove a substantial economic presence and real economic presence within the Bahamas.
These activities include:
fund management business;
financing and leasing business;
distribution and service centers business;
commercial use of intellectual property;
This is also applicable to a holding company that has one or more subsidiaries engaged in such activities.
To fulfill the substance test, a company needs to demonstrate:
Full-time employees in the Bahamas
An adequate level of annual expenditure incurred in the Bahamas or expenditure incurred towards outsourcing to service providers
Adequate levels of board management and control in the Bahamas
Physical offices in the Bahamas or expenditure incurred towards outsourcing to service providers in proportion to the entity’s activities.
Offshore companies cannot outsource any core income-generating activities to anyone outside the Bahamas.
While outsourcing to a third party within the Bahamas is allowed, the offshore company must exercise sufficient supervision and management.
Secondly, even though British English is the official language, most of the population speaks English with a Creole dialect.
Some even have a pronounced African accent.
As a result, you may find it challenging to communicate with various service providers and get the paperwork organized.
Thirdly, court systems in the Bahamas are not very efficient.
So what are my options for registering an offshore company?
While registering a company in the Bahamas looks fantastic on paper due to financial privacy and tax benefits, there are significant challenges involved in navigating your business.
But that’s no reason to feel disheartened.
Why not head over to Hong Kong, which has emerged as the top choice for entrepreneurs in recent years for setting up an offshore company?
Hong Kong has been ranked 3rd by the World Bank for the ease of doing business and offers several advantages such as an attractive tax system, political stability, superior infrastructure, productive workforce, and access to Mainland China.