It is really easy to do business in Hong Kong. The regulatory environment promotes free enterprise, as is evident from offshore company registration in Hong Kong.
Hong Kong is simply the best choice for entrepreneurs and investors when it comes to setting up an offshore company to run a business.
This article will tell you everything you should know about offshore company registration in Hong Kong.
There is no legal definition for offshore company in Hong Kong. Generally speaking, it can be described as a company:
Compared to most offshore jurisdictions, many investors prefer setting up an offshore company in Hong Kong because of several reasons:
1. Favourable tax regime
Hong Kong offers one of the world’s most attractive tax systems.
There are no sales taxes, VAT, GST, estate duty, or capital gains tax payable.
Offshore companies registered in Hong Kong are not subject to corporate income tax on their revenue generated outside of Hong Kong. Onshore companies in Hong Kong are subject to corporate income tax of maximum 16.5%.
Moreover, interests and dividends do not attract any withholding taxes.
Hong Kong follows global standards when it comes to tax and information transparency.
Hong Kong is not a tax haven. In fact, OECD recognizes Hong Kong as a low tax jurisdiction.
Operating a business via an offshore company registered in Hong Kong is better perceived than using a company in the BVI, the Seychelles or the likes.
3. Easy to set up a company in Hong Kong
Setting up a new company in Hong Kong is absolutely straightforward. One does not have to deal with any red-tape or bureaucratic set up.
A Hong Kong company does not require any domestic shareholder or director.
From a cost-perspective, it is cheaper to register and operate a company in Hong Kong than in the BVI or the Cayman Islands.
4. No Foreign exchange control
There is no foreign exchange control in Hong Kong. Money can be moved or converted very easily.
5. No economic substance test
There is no regulation on economic substance or economic substance test for offshore companies registered in Hong Kong.
On the contrary, companies in the BVI and other offshore jurisdictions are now subject to a yearly economic substance test. Regulations on economic substance are difficult to navigate, with risks of high penalties in case of failure to comply.
6. Market friendly economy
For the past several years, Hong Kong has been ranked as the world’s freest economy.The policies and legislations are based on the principles of free trade. As a result, it is a leading financial hub for entities across the world.
There are three critical steps to register an offshore company in Hong Kong:
1. Registering the company name
You must apply to the Companies Registry to obtain approval for the name of the company. Start by looking up the availability of the proposed name. For more information, check out our guide to selecting the right name for your company.
2. Preparing the relevant documents for incorporation
The following documents should be prepared for submission to the Companies Registry:
3. Undertaking the necessary compliances
Filing the incorporation documents with the Companies Registry
These documents should be submitted within 14 days of incorporating the offshore company:
Setting up a business account
Most banks require a standard set of documents for opening a business account. These include:
|Form of entity||Private company limited by shares|
|Minimum Capitalization Requirements||1 HK$|
|Minimum number of shareholders||1|
|Maximum number of shareholders||50|
|Nationality/residency of shareholders||● Natural person or corporates can be shareholders● Can be wholly foreign owned|
● Not mandatory to be a national or resident of Hong Kong
|Director requirements||● At least one director needed● Natural person or corporates can be appointed|
● Not mandatory to be a resident or a Hong Kong national
|Company Secretary Requirements||● Local company secretary needed● Natural person or corporate residents can be appointed|
|Taxation||● Legally exempted from taxes on income derived from business outside of Hong Kong|
|Annual and ongoing compliances||● Company accounts should be audited annually● Changes affecting the company, its shareholders or directors should be reported to the Hong Kong Companies Registry|
● Annual Returns to be filed with the Companies Registry
● Tax returns should be filed with the Inland Revenue Department’
● Business Registration Certificate to be renewed each year
● One Annual General Meeting to be held each year
Contact us for registering your Hong Kong offshore and open your business account.
Focus on your business, we take care of the rest.
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