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Hong Kong Offshore Company Formation

The low tax haven of Hong Kong is one of the world’s highly rated trading countries. The territory depends on experts, tourism and its financial center. The tax haven has created a very attracted environment which has led to the incorporation of many of the world’s business corporations have branches, headquarters and subsidiaries in the jurisdiction. What attracts some of the most powerful business companies to register in the tax haven of Hong Kong? Hong Kong has a very low tax rate for business companies incorporated there. Business companies which are incorporated in the tax haven and have business operations there only pay a low tax rate of 17.5% on profits derived from within the jurisdiction. Companies formed in the tax haven but has receives no income directly from the territory will be exempted from local taxes. Also interests and dividends gained are not subjected to capital gains tax in the tax haven.

An offshore company in the tax haven of Hong is regarded as a company which has been incorporated in the territory but has no business operations there. Such business corporations’ formation is regulated by the Hong Kong Companies Ordinance. Hong Kong offshore companies can be incorporated as Limited Partnerships, Private Limited Companies or Sole Proprietorship companies. The most common form of offshore companies formed in the tax haven of the Hong Kong Private Limited Company. Once incorporated a Hong Kong offshore company is a legal business entity and can be used for conducting business anywhere in the world. Hong Kong offshore companies are well recognized throughout the world.

Offshore company formation in Hong Kong is carried out by the offices of the Registrar of Companies. This process can be achieved by submitting to the Registrar of Companies a completer Memorandum of Association and Articles of Association. A declaration of Compliance must also be filed with the Registrar of Companies. The information which forms part of these documents is:

  • The proposed name of the company
  • The registered address of the company
  • The authorized share capital
  • The number of shares to be issued
  • The classes of shares to be issued
  • The rights, powers, limitations and privileges attached to each class of share
  • The business operations the company will undertake
  • The liability of each shareholder must be stated
  • The by- laws of the company are to be included in the Articles of Association

The persons wishing to incorporate the Hong Kong offshore company must submit to the Registrar of Companies a Notice of Situation of registered office within fourteen (14) days of incorporation. This must be done for offshore company registration to be complete. The Registrar of Companies will revise the documents submitted and will hand over to the offshore company a Certificate of Incorporation which then means the company is a legal entity and can undertake business operation in or out of the tax haven.

Before the process of offshore company incorporation can take place the name of the Hong Kong Company must be carefully chosen. The Registrar of Companies will not register offshore companies in the low tax haven of Hong Kong if the name chosen for the company has already been used by another company in the tax haven. The Hong Kong offshore company will not be registered if the name chosen is similar to an existing company so as to cause confusion between the two (2). Hong Kong private limited offshore companies must denote that the company is a limited liability company by including the words Limited Liability or its abbreviation as part of the company’s name.

The offshore companies registered in the tax haven of Hong Kong can only undertake the business operations that they were licensed to conduct. Hong Kong offshore business companies need to apply for a special license for the use of the following words as part of their company name or to carry out such business operations in the tax haven of Hong Kong: bank, assurance, insurance, savings, Trustee, Trust, royal, imperial, investment fund, fund management, Chamber of Commerce, reinsurance, Tourism association, Kaifong, Chartered among other words and phrases.

In order to complete offshore company formation in the low tax haven of Hong Kong directors, shareholders and a company secretary must be appointed for the offshore company. The minimum number of shareholders required for the formation of a Hong Kong offshore company is one (1). The shareholder of a Hong Kong company can be a natural person or a corporation. The Hong Kong offshore company needs a minimum of one (1) director who can be a corporation or an individual. For the registration fan offshore company in tax haven Hong Kong a Company Secretary must be appointed. The Company Secretary for the Hong Kong corporation must be a resident of the tax haven and can be an individual or corporation. The use of Nominee shareholders and directors is allowed for the formation of offshore companies in Hong Kong.

In order to incorporate an offshore company in the tax haven of Hong Kong there is no minimum authorized share capital. The normal authorized share capital for an offshore company in HK$10,000. Shares for an offshore company in tax haven Hong Kong can be issued as preference shares, ordinary shares, shares with and without voting rights and redeemable shares.

Offshore company formation in the tax haven of Hong can be completed within fifteen (15) working days if all the right documents are submitted. A Hong Kong offshore company has many benefits. Hong Kong companies which do no business in the jurisdiction operate tax free. Companies which do business in Hong Kong can do so with very low taxes applied. In the tax haven of Hong Kong the offshore company must appoint a registered auditor who will prepare the financial statements of the company. The offshore company’s annual financial audit must b filed with the tax authorities in Hong Kong. There is no obligation for offshore companies in Hong Kong to file its audits with the Registrar of companies.