HONG KONG OFFSHORE
Hong Kong’s corporate law is strongly based on the British common law and it is the Government’s policy to maintain a simple and low tax system. Only profits derived in Hong Kong are assessable for taxation and genuine offshore transactions are not subject to HK tax.
Current tax rates are:
Offshore income: 0%
Capital gains tax: 0%
VAT or GST: 0%
Onshore income: 16.5%
Individual tax rate: 15%
Hong Kong has entered into two important agreements with China:
The Closer Economic Partnership Arrangement (“CEPA”) – Briefly, products of HK origin are exempt from tariffs when imported into China.
The Arrangement of Avoidance of Double Tax – Briefly, the Double Tax Agreement with China provides certain incentives and should be thoroughly reviewed when structuring and planning investments into China to achieve tax efficiency. In practice, this means that foreign investors can use a HK company to minimize their tax exposure in China.
Each Hong Kong company must have:
At least one director who is a natural person, can be resident or non-resident. The second director can be a corporate director and this is permitted for companies that are not subsidiaries of public listed companies;
A local secretary and a local registered office which must be a physical address and not just a Post Office box
At least one shareholder, can be resident or non-resident. Details of the company’s directors, secretary and shareholders must be filed at the Companies Registry and are on public record
Minimum initial paid-up share capital is HK$1.00
Each year, the company must submit an annual return and penalties apply for late filings
All companies must obtain a Business Registration Certificate from the Inland Revenue Department (“IRD”) and are required to file a set of audited accounts and tax return with the IRD annually when the company has commenced business
English names and Chinese characters are permitted and can be included on the Certificate of Incorporation.
Hong Kong banks are renowned for their well-established systems and are monitored by the Monetary Authority. We have good working relationships with many local banks and as a qualified intermediary, dependent on the choice of bank; our clients can be waived of the requirement to meet the banker.
To summarize, we provide a one-stop shop service commencing with but not limited to the formation of the company, providing virtual office services, accounting & tax compliance, company secretarial and administration, bank account signatory and management, trade documentation and payroll services. We can also assist in establishing a physical office in Hong Kong.