Offshore incorporation is beneficial if you aim to conduct business with a Chinese company partner without any difficulty. Besides, Hong Kong is an important international financial centre and one of the major global business centres. Thus, offshore incorporation is indeed one of the significant benefits of company formation in Hong Kong. In this article, we discuss the benefits of offshore incorporation.
There are several reasons why people prefer the offshore incorporation Hong Kong. First of all, it allows you to become a company owner without any legal hassle. A Hong Kong business is ideal for offshore incorporation, mainly to conduct transactions with a Chinese firm partner.
However, there are several other benefits of company formation in Hong Kong. There are numerous advantages of establishing a foreign company in the local territory. These advantages include the following. The advantages of offshore incorporation in Hong Kong are as follows:
If you aim to open a foreign company in Hong Kong, you can use the “One Company” scheme. Under this scheme, you will pay a nominal fee to the Office of the Secretary of State, and you will be able to set up an offshore company that will function under the name of your original foreign company. Thus, the main benefits of an offshore incorporation scheme in Hong Kong include:
Also, you can open an offshore company in Hong Kong that will operate as a foreign company in any country in the world. If you are interested in establishing an offshore company in Hong Kong, you may use the “Building and Settlement Services (BDS) Registration” scheme. The main benefits of offshore incorporation schemes include:
This scheme is usually advantageous for people who own companies with no active management. Unlike in most tax jurisdictions, a company formation in Hong Kong does not have any tax requirements. You can register the company at the Companies Registry under the abbreviation “CC”. The Companies Registry provides the public with information on its registered officers’ names and addresses, its present address (if different from that of the listed company), its permanent business address, and its tax payments. It also includes details on its shareholdings, authorized shareholders, and income and dividends.
The only disadvantage of incorporating a foreign company in Hong Kong is that its statutory corporate tax rate is higher than in other parts of Asia. It is due to the lower value of the ‘share’ in the company. Nevertheless, the company will still enjoy all the benefits of being a company by the law – it will be able to issue shares or free stock (through a board meeting). It will continue to be protected by the Companies Act until it becomes a public company under the Companies Act. Finally, before incorporating a company in Hong Kong, you should seek professional advice.
However, there are certain disadvantages that you need to consider when incorporating a company in Hong Kong through an offshore incorporation scheme. The first one is that it requires a considerable investment, which could be as high as several million US dollars. The second is that you will only be able to open a bank account in Hong Kong to hold your offshore company. You will also be limited in the choice of the domain name and other domain name options.
These restrictions notwithstanding, offshore incorporation is quite popular in the world today. There are many reasons why a lot of businesspeople prefer it. The most important one is that it saves them both time and money. By incorporating a company offshore, you will be able to include all your company’s business operations in a foreign country without paying the taxes on them at home. Also, since you are not required to pay income taxes on your offshore company, you will be able to keep more cash available for other expenditures. Thus, offshore incorporation allows you to maximize your profits.
However, before incorporating a company offshore, there are some things you should keep in mind. First, you should decide on the name of your offshore company carefully. It would help if you chose a name that will reflect your business well so that clients will easily remember you and will visit your website. Choose a name wisely that is not difficult to spell or hard to pronounce. Besides, the registration process of offshore incorporation in Hong Kong might take several months, and you should be patient with it because offshore incorporation is a very time-consuming process.
It is also essential to set up the offshore company properly. You should make sure that all the offshore company documents are in place and good order. Besides, you have to ensure that the business is conducted according to the country’s rules where you incorporated the offshore company. The next thing you need to do is register the offshore company and ensure that the offshore company’s main office is situated in a tax haven. Then you can start earning unlimited profits as soon as possible!