Starting a business in Hong Kong
Setting up a company in countries with an offshore jurisdiction offer certain advantages (tax, confidentiality, company structure, etc.) to be used by non-residents. Renowned tax havens around the world include Bermuda, British Virgin Islands and the Cayman Islands, with these countries enjoying a zero tax regime.
Offshore companies are classified by the jurisdiction that they fall under, and while Hong Kong doesn't have any specific law that governs offshore company formation, it is classified as a "mid-shore" jurisdiction and is by far one of the most popular jurisdictions for setting up an offshore company today!
The folks over at Healy Consultants created a great infographic detailing the classifications of jurisdictions, the characteristics of an offshore country, and the top three uses thereof. If you are looking at starting a Hong Kong company then read on to learn more about offshore companies and the advantages that Hong Kong company registry will hold for you...
Two types of offshore companies one can set up in Hong Kong
In Hong Kong it is possible for non-residents to set up one of two types of offshore companies, the first being registering a brand new Hong Kong company. We have written quite a few articles on Hong Kong company registry. Feel free to read up more on the subject below.
- Hong Kong company formation: Why bother
- Is Hong Kong company registry necessary for doing business in China
- Hong Kong company registration costs: No tricks
- Starting a business in Hong Kong vs in Singapore
The second option is by purchasing a shelf company. This is essentially a company that already exists on paper, but contains no liability or assets. Those looking to commence with business from the get-go may opt to purchase a shelf company, but they also tend to be more expensive than registering a new company.
Some advantages of setting up an offshore company in Hong Kong
- Easy to set up: Setting up a Hong Kong company is simple and only takes around 2 weeks to do.
- World class infrastructure: Hong Kong is home to one of the busiest ports in the world, boasting world class infrastructure that has positioned it as one of the easiest places to do business in the world.
- A Western legal system: One can always be safe in knowing that Hong Kong is governed by a Western legal system that is transparent for all citizens to be protected under.
- Trusted image for an offshore company: Hong Kong is a low tax jurisdiction that has been endorsed by the OECD (Organization for Economic Co-operation and Development). It is one of the jurisdictions that has committed itself to the international standard on tax information and exchange, and therefore setting up an offshore company in Hong Kong is not viewed as negatively as some traditional tax havens may be viewed.
- Various tax benefits: Hong Kong boasts some of the lowest tax rates in the world. Hong Kong’s corporate income tax rate is 16.5%. There is no capitals gains tax, no VAT/GST, no estate duty, and no withholding tax on dividends or interest. Foreign sourced income is exempt from tax in Hong Kong and there are no foreign exchange controls in Hong Kong.
All of these benefits make setting up a company in Hong Kong a very viable choice for anyone looking to take advantage of what offshore companies have to offer. As for the city itself, Hong Kong is a jewel in South East Asia that is ranked as one of the most popular tourist destinations worldwide, really making it one of the nicest places on Earth to mix a little bit of business with a whole lot of pleasure!
Is your business considering Hong Kong company formation? What are your largest concerns or questions? Have you already set up a Hong Kong company? How did it go?
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