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Hong Kong Offshore Company Tax Process

Investing in the offshore segment helps a business investor fetch numerous benefits and have a stronghold on the financial aspects.

Numerous individuals feel better to put resources into the Asian areas. However, where? If you are stressed over the location for your offshore company, at that point, why not look at Hong Kong?

Hong Kong is one of the highly preferred platforms that paves out numerous ways for the business investor to come forward and invest.

With a wide range of lucrative options like tax exemptions and a business-friendly environment, the zone has captured the eyes of international investors.

It is to be noted that while dealing with the offshore company setup process, one of the major concerns is the tax proceedings.

This article gives a complete picture of the essential framework to set up an offshore company in Hong Kong and the relevant tax proceedings.

Corporate Taxation in Hong Kong

From 1 April 2018, Hong Kong has presented a two-tier profit tax regime, i.e., two tax rates: one for benefits till HK$ 2 million, and the other past that.

  • For a typical company functioning in Hong Kong, the corporate tax is 8.25% for benefits to HK$ 2 million and 16.5% over that
  • For an unincorporated company type (sole ownership or association), the comparing tax rates are 7.5% and 15%, respectively

It's to be noticed that this tax is collected on a company doing business in Hong Kong – on benefits derived from within the nation.

It doesn't fall inside the regional extent of Hong Kong's taxation framework, including those received by locally consolidated companies.

Tax Exemptions in Hong Kong

When it comes to the offshore company set up in Hong Kong, there are certain exemptions that one can gain, which includes:

  • Sales or VAT tax
  • Real estate tax
  • Tax on dividends
  • Capital gains tax
  • Withholding tax
  • Any tax received from abroad

An offshore company in Hong Kong can complete its tasks only outside the nation. Since there are no taxes on the salary received outside Hong Kong (attributable to the regional tax framework here), there is no corporate tax for an offshore company in Hong Kong.

How to File a Corporate Tax in Hong Kong?

All qualified companies are needed to present the accompanying records to the Inland Revenue ent (IRD) in Hong Kong for the evaluation time frame 1 April to 31 March each year:

  • Profits tax return form
  • Certified duplicate of auditor's report, balance sheet, and P&L statement
  • A supplementary form for financial information, tax data, and so forth.
  • Tax calculation indicating how the assessable benefit (or balanced loss) has been determined

Companies whose gross total profit doesn't surpass HK$ 0.5 million for the tax evaluation term need to submit just the benefits tax return structure and the beneficial structure.

Besides being one of the top nations in Asia to set up your business, Hong Kong highlights a mild tax system, making it one of the most favoured areas for outsiders to put resources into and store their cash. In case you intend to begin your business in Hong Kong, various tax benefits anticipate you!

How to Set Up An Offshore Company in Hong Kong?

Incorporating an offshore company in Hong Kong involves few steps that one has to follow:

  • Decide certified business consultant who can assist you in the legal moves
  • Finalize a trading name for your business
  • Understand the complete proceedings that are to be followed
  • Make sure to present the stated documents

For the Overview Process:

  • Bank statements for the last three months
  • Skype ID, CV (LinkedIn)
  • Professional background (Professional qualification certificate)
  • Proof of existing employment​

For the How to Setup Process:

  • Certified copy of passport
  • Certified proof of address (Utility Bill of Gas, Electricity or Water)- the issue date must be less than three months ago
  • Bank reference letter
  • Bank statements for the last three months
  • Skype ID, CV (LinkedIn)
  • Professional Background (Professional Qualification Certificate)
  • Proof of existing employment
  • Make sure to open an offshore bank account

The above-stated are just the highlights of the specific steps that are to be followed. To know the complete process in a much better way, follow our latest guide on Offshore Company Registration in Hong Kong.

Setting up an offshore company for the process of getting relevant tax exemptions is one of the safest ways to take your business to an international level.

While proceeding ahead, it is to be taken care that the business proceedings are to be cleared in an error-free way, which means that the legal compliances should be met correctly.

One of the easiest ways to proceed is to get in touch with a certified business expert who can help you clear the legal moves at ease.

At Business Setup Worldwide, we take care of the essentials to affordably provide the best business setup solutions.

Our advisors can assist you with your incorporation, opening an offshore bank account, and tax arrangement in Hong Kong, mainly since we comprehend the motivating forces another Hong Kong company can profit by. Do contact us – even if it is for friendly advice!