Offshore company registration

Hong Kong does not have any specific laws governing offshore company registration. The advantages of registering an offshore company are low taxation, no foreign exchange controls, and political and economic stability in the place where the offshore company is registered. Therefore, setting up an offshore company in Hong Kong is the perfect tool for international trade, investment activities and asset protection.

What are the benefits of offshore company registration

Some countries and regions have formulated some particularly relaxed policies to attract investors from all over the world to set up offshore companies in that country or region ( such as British Virgin Islands (BVI) offshore companies, Seychelles offshore companies, Cayman Islands offshore company, Samoa offshore company, Labuan offshore company, United States Deva offshore company, etc.) . This type of offshore company basically does not levy any taxes, only annual license fees, and can be listed in other countries or regions. It is the first choice for most multinational companies to arrange corporate structure and reorganization.

Compared with ordinary limited companies, the main difference between offshore company registration and general limited companies is taxation. The offshore income of offshore companies does not need to be levied any tax, and no tax declaration is required, and the offshore company’s shareholder information, equity ratio, income status, etc. All enjoy high confidentiality rights.

Registering an Offshore Company

Tax planning

Tax payment is an expense. If you can make effective and legal tax planning and arrangements through the tax regulations and deductible items registered by offshore companies, you can minimize the tax payable.

As a holding company

Registering an offshore company is a special form of holding company. The purpose of its establishment is only to hold the shares of the subsidiary, control its equity, and use the control power over the subsidiary.

International trade

Registering an offshore company facilitates the trading of goods and services across national borders.

Business investment

If you want to make business investments overseas, you must register as an offshore company registered in Hong Kong, obtain a business registration certificate, and file tax returns on income generated in Hong Kong.

Overseas listing

Registering an offshore company is a special form of holding company. The purpose of its establishment is only to hold the shares of the subsidiary, control its equity, and use the control power over the subsidiary.

What are the advantages of registering an offshore company in Hong Kong? 

There are nine major advantages to registering an offshore company in Hong Kong

Offshore company incorporation procedures are simple: Hong Kong is rated as one of the easiest places in the world to do business. Setting up an offshore company is simple and easy, without unnecessary bureaucracy or red tape. In addition, Hong Kong adopts a favorable foreign ownership policy, granting 100% foreign ownership of company shares.

100% privacy protection, no need to disclose the identities of shareholders and directors

 

Tax benefits: No need to declare or pay any taxes: Hong Kong taxes are among the lowest in the world. The tax   system is simple and facilitates offshore company setups. Hong Kong's corporate income tax rate is 16.5%. There is no capital gains tax, no VAT/GST, no inheritance tax and no withholding tax on dividends or interest. In addition, foreign-source income is tax-free in Hong Kong. Therefore, Hong Kong offshore companies that derive income from overseas are tax-free in Hong Kong. This is one of the biggest advantages of Hong Kong companies. 

No exchange controls

Political Stability: There is a direct relationship between political stability and the investment climate. Hong Kong is a special administrative region of China and still retains its independence from the political, economic and judicial systems.

No registered capital requirement

The company name can be in Chinese

No need to submit annual report, financial report and audit report

Trustworthy image: Hong Kong is often called an offshore tax haven. In fact, it is not a tax haven, but simply a low-tax jurisdiction. This view has also been recognized by the Organization for Economic Co-operation and Development (OECD). Hong Kong is also one of the jurisdictions committed to the exchange of international standards and tax information . Therefore, offshore companies in Hong Kong will not be viewed negatively or viewed with suspicion.

Requirements for registering offshore companies in Hong Kong 

Requirements for directors of offshore companies:

1. At least one director is required.
2. There is no upper limit on the number of directors.
3. Directors can be individuals or companies.
4. Directors may be Hong Kong residents or non-Hong Kong residents.
5. Directors can be of any nationality.
6. Directors may be nominated.

Requirements for offshore company shareholders:

1. At least one shareholder is required.

2. A maximum of 50 shareholders are allowed.

3. Shareholders can be individuals or companies.

4. Shareholders can be Hong Kong residents or non-Hong Kong residents.

5. Shareholders can be of any nationality.

6. Shareholders can be nominated.

7. 100% local or foreign equity allowed.

8. A sole director may serve as a shareholder. 

Offshore company registered address:

The registered address of a Hong Kong company requires a local physical address other than a post office box.



Offshore company share capital:

Any amount of equity must be injected into the company's bank account. No holder equity is allowed


Offshore company taxation:

Only income "sourced or arising in Hong Kong" is subject to the 16.5% corporate tax rate. Overseas income or foreign income is exempt from Hong Kong tax.

After an offshore company is incorporated, it must comply with the following procedures:


  1. Submit documents to the Companies Registry: Within 14 days after registering an offshore company in Hong Kong, the following documents must be submitted to the Companies Registry:
  2. Notice of appointment of directors;
  3. Agree to serve as a director;


Notification of offshore company registration address;

Other documents required by the Registrar of Companies.

Register at the tax bureau: Within one month of registering an offshore company, you must register with the tax bureau and obtain a business registration certificate.

Characteristics of offshore company registration

Offshore company registration – geographical factors

Offshore companies must be established in a specific offshore jurisdiction, which is the geographical element of an offshore company. There are many well-known offshore jurisdictions on all continents in the world. These jurisdictions are mainly island countries. In order to attract investment and improve local economic development, they have specially formulated offshore company laws to encourage capital from all over the world to register locally. For enterprises, Business income is exempted from or charged a small amount of tax, and only a certain management fee is charged every year.


Offshore company registration – legal elements

The legal basis for the establishment of an offshore company must be the specific offshore company law regulations in the offshore jurisdiction, which are the legal elements of the offshore company. For example, in the British Virgin Islands, the local law regulating offshore companies is the "Virgin International Business Companies Law" (amended and unified into the "Virgin Business Companies Law" in 2004), while in the Cayman Islands, it is the "Cayman Islands International Business Companies Law" Exemption from company norms under Chapter 7 of the Companies Act.


Offshore Company Registration – Capital Elements

Generally speaking, the registered capital of an offshore company comes from the investment of investors outside the offshore jurisdiction, or the investors or founders of the offshore company are non-local, which is the capital element of the offshore company. Judging from the purpose of creating offshore company laws in various countries, its essence is to facilitate the capital operation of foreign investors. From a practical point of view, companies established by investors (including natural persons and legal persons and other economic organizations) and capital from offshore areas constitute the main part of offshore companies.


Offshore company registration – operational elements

Offshore companies are not allowed to operate in offshore jurisdictions, or in other words, offshore companies are companies that exclude their local operations. This is an operational element of an offshore company. Almost all offshore company laws stipulate that once an offshore company is found to have entered into business contracts with other companies in the offshore jurisdiction, the authorities will revoke the company's offshore status. The registration place of an offshore company is within the offshore jurisdiction, and its main business and management activities are conducted outside the registered offshore jurisdiction. Therefore, the offshore company has the characteristics of separation of the place of registration and the place of business. This separation is sometimes reflected not only in the fact that the company's investors do not have the status of natural persons or legal persons in offshore jurisdictions, but also in the fact that its directors, managers and other senior management personnel of the company are generally not residents of the place of registration.

Frequently Asked Questions about Offshore Company Registration

How to draft an offshore company name?

Generally speaking, the name of an offshore company must include "Limited", "Corporation", or the abbreviation "Ltd.", "Corp." or "Inc.". If the proposed offshore company name is the same as the registered company name, it cannot be registered. Furthermore, the name of an offshore company generally cannot contain the words "bank" or "insurance".

Can offshore company names be available in Chinese?

It is possible for some countries. For example, in the British Virgin Islands (BVI), Cayman Islands (CAYMAN ISLANDS), Samoa (SAMOA) and other countries, Chinese names can be used for offshore company registration.

What is the minimum registered capital requirement for an offshore company ?

The amount of registered capital of an offshore company depends on the customer's business scale and purpose. Different countries have different registered capital requirements for offshore companies.

How many shareholders and directors must an offshore company have?

At least one shareholder and director, and shareholders can concurrently serve as directors.

Will the information of offshore company directors and offshore company shareholders be accessed by other parties ?

The laws of most places where offshore companies are registered do not require disclosure of the identities of offshore company shareholders and offshore company directors. Therefore, it will not be looked up.

What are the advantages of setting up an offshore company?

The advantages of registering an offshore company are as follows:

  • Offshore company registration procedures are simple, low-cost, and no capital verification is required
  • Free circulation of foreign exchange
  • legal tax avoidance
  • Simple way to maintain your company
  • Offshore company registration information and documents can be highly confidential
  • No restrictions on business scope or regional scope

Once an offshore company is registered, can it be used for operations in Hong Kong without reporting to the Hong Kong government ?

Can't. If a company from any country or region conducts business in Hong Kong, it must obtain a business registration certificate and file a tax return. According to Hong Kong company laws, the company must be registered as an offshore company registered in Hong Kong.

Does the information of shareholders and directors of offshore companies need to be filed with the local government?

No, most offshore companies only need to store the information of offshore company directors and offshore company shareholders with the local agent.

What are the requirements for opening a bank account ?

To open an offshore company bank account, you need to provide the following notarized copies signed by an accountant or lawyer:

  • Register of Shareholders and Directors
  • Company registration certificate
  • Board meeting minutes
  • company policy
  • Consent letter to serve as director
  • Proof of personal address of director (such as water, electricity, gas bill, etc.)
  • Company Good Record Certificate (issued by local government)
  • Original copy of the director’s personal bank credit certificate

How to prove the existence and legitimacy of a company?

After the company is registered, we will forward the company's registration certificate, company seal, company articles of association and other documents to the client. In addition, we can also assist customers to apply for "Certificate of Company Existence" from the local government.

After an offshore company is established, can the company's articles of association and other documents be changed?

Can. Offshore companies can legally amend and supplement their articles of association and other documents.

If an offshore company wants to invest in China , how can it obtain the "Credit Certificate" required by the Chinese government?

Offshore companies need to open an account in a bank and have a certain amount of funds. The bank will issue a credit certificate only after passing the assessment.