Hong Kong is said to be the most liberal economy in the world. Its tax regulations allow foreigners to register a business in Hong Kong which can be legally exempt from corporate income tax.
Even though the country does not have any specific law that governs offshore business incorporation, it is one of the most prevalent jurisdictions for establishing an offshore company owing to its low tax regime, absence of foreign exchange controls, economic and political stability, ease of doing business as an offshore company etc.
Offshore business setup in Hong Kong is a perfect vehicle for conducting offshore banking activities, investment activities, international trade, and asset protection. This guide will help you in understanding the procedure to set up an offshore company in Hong Kong. But first, let us know the advantages that a company can derive from offshore business setup.
Advantages of Offshore Company Setup in Hong Kong
The most well-known reasons for setting up an offshore business in Hong Kong are-
- Hong Kong is an ideal gateway to enter the Chinese market as the city benefits from better access to the Renminbi than Singapore and other Asian trading hubs
- Hong Kong has signed double taxation treaties with six countries that makes Hong Kong offshore company a great holding vehicle
- Business setup in Hong Kong is an attractive vehicle to legally minimise international taxation. The company will be exempt from paying corporate income tax on foreign-sourced income. It will also get an advantage from the absence of capital gains tax and withholding tax on earnings remitted overseas
Characteristics of Hong Kong Offshore Company
- It offers a high level of anonymity and privacy
- Preparation of accounts is mandatory, but they are not publicly accessible
- No taxes on foreign profits
- Minimum one director and shareholder is required
- Bearer shares are not permitted
- Appointing an auditor is necessary
The process to Set Up an Offshore Company in Hong Kong
The process to register your business in Hong Kong involves two distinct steps. They are-
- Company name approval which can be completed by applying with the Companies Registry
- Submitting the documents required to register your business. It includes –
- Application form for incorporation
- Articles of Association
- Photocopy of passport
- Overseas residential address proof
- Bank reference letter for non-resident shareholders or directors
- Identity card of Hong Kong resident shareholders and directors
- Parent company registration documents of corporate shareholders
The registration procedure includes less paperwork. But remember that there are a few formalities to be completed after registration of your business. They are –
- Submit documents to company registry. It includes –
- Appointment notification of directors and secretary
- Consent to act as a director
- Registered address notification
- Open a corporate offshore bank account. Hong Kong provides several choices of banks with whom you can open a corporate bank account. Most of the banks have requirements of being physically present to open the account
- Register with the Inland Revenue Department. This must be accomplished within one month of business formation. Registering and obtaining the Business Registration Certificate
- Apply for a business license. If your business activity requires having a business license, then you must apply for a business license by providing documents required.
The most common way to incorporate an offshore company in Hong Kong is by hiring a consultant. We at Business Setup Worldwide can register an offshore company in Hong Kong for you.
Our consultants will collect the essential information and documents from you and ensure to obtain company name approval for your offshore company in Hong Kong. We will then proceed with filing the registration documents with the Companies Registry and also file for registration with the Inland Revenue Department for your Hong Kong Company.
You will obtain a company incorporation kit that includes a company seal, share certificates, rubber stamp, company profile, certificate of incorporation, etc. upon effective registration of the Hong Kong offshore company. We can also support you with opening a bank account, obtaining business licenses, procuring a relocation visa and handling ongoing company administration and compliance. Contact us today to know more.