As one of the most open economies in the world, Hong Kong is the ideal location for business set-up and company formation. In Hong Kong, there are no restrictions on inbound or outbound investment, even there are no restrictions on ownership. Opening a company in Hong Kong is easy and cost-effective. In this blog, we will discuss the procedure, other things necessary to start a Hong Kong offshore company. If you are planning to start a Hong Kong offshore company then this blog will help you. Let's explore the ideas and knowledge about Hong Kong offshore company.
What is an Offshore Company?
Offshore means located or situated beyond one's national boundaries. The term Offshore company has two definitions depending on its perspective. From the standpoint of the principals of the company, Offshore company is a company that has been registered outside of the country where its principals such as officers, directors, shareholders, members, partners reside. From viewpoint of within its country formation, Offshore company means a company that has been formed for purpose of operating outside of the Jurisdiction where it was originally registered.
Reasons for opting an Offshore Company
The reason for opting Offshore company is to take advantage of laws that are not available in one's country of residence. An Offshore company gets benefits of tax savings, asset protection from lawsuits. An Offshore company also takes advantage of foreign business opportunities.
What is Hong Kong Offshore company?
Hong Kong offshore company is an attractive vehicle which helps to legally minimize international taxation. Hong Kong tax regulations allow foreigners to register companies in Hong Kong which can be legally exempt from Hong Kong corporate income tax. Such companies can be registered with a paid up capital of only one US dollar and the businesses without any staffing in Hong Kong.
Benefits of Hong Kong Offshore company
List of benefits of Hong Kong Offshore company is given below:
1) Easy setup - Setting up a Hong Kong company is very simple and it avoids unnecessary bureaucracy. Prior to Hong Kong company set up, there are no requirements of special authorizations from government authorities.
2) Tax Benefits - Taxes in Hong Kong are very low. The tax system is simple and favors offshore company setup. In Hong Kong, foreign sourced income is exempt from tax.
3) Trusted Image - Hong Kong is always criticized as being an offshore tax haven but in reality, it is simply a low tax jurisdiction. Hong Kong is also one of the cities that has committed itself to the international standard on tax information and exchange, as a result, an offshore company in Hong Kong is not viewed negatively. An offshore company in Hong Kong has a trusted image.
Procedure for offshore Hong Kong company registration
1) Check for name Availability - Before filing an application for company incorporation, the first step is to check the availability of the proposed name. One can apply for maximum of three names. After finalization of the name, incorporation application is required to be filed.
2) Apply for company incorporation - The company incorporation application needs to be filed online at the registry portal or it can also be filed via the "CR e-filing mobile application.
3) Company Incorporation application will consist of the following documents
• Company incorporation Form (Form NNC1 for a company limited by shares)
• One copy of the company's Articles of Association
• A notice to the Business Registration Office (IRBR1)
4) The opening of Bank Account - Applicant will open a bank account. Hong Kong authority will provide all the useful information related to the same.
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