Best offshore structure saves you millions of tax dollars

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Author: Stephen Lai

Hong Kong is an international city overall the global world. It has the features that make Hong Kong a well known international city and so many investors from the world would prefer choosing Hong Kong as an offshore company for their international business. There are indeed some benefits: 1. The economic system is market oriented, with a little involvement of government interventions. Many investors can choose what businesses they do, the government are more encourage them to make investments and do businesses. 2. The capital flows of money between Hong Kong and other countries are free and without control and restrictions. All currencies such as US$, etc ... can be used in Hong Kong, with free wire between Hong Kong and other countries, only exception that no money laundering is involved nor criminal activities. 3. Offshore business activities are 100% tax free. The Hong Kong tax law has ruled out that only local business is subject to profits tax, overseas business registered in Hong Kong is offshore business and is not subject to profits tax. 4. Low tax rate. Even the business is done in Hong Kong; the tax rate is only 16.5% of net profits. The tax rate is absolutely low, with no VAT, business tax, no capital gains tax, etc. 5. Formation requirement is very simple. As an international city, a person, overseas person or local person, can be appointed as the shareholder and director of a Hong Kong company, with the requirement that there must have an appointed local secretary and registered office address for corresponding. The shareholder and the director can be the same person. In fact, it is the common way that the overseas businessman can act as a shareholder and director for Hong Kong company, and even he does not require visiting Hong Kong and signing documents. He doesn't require to get working visa. He only appoints local secretary to do the paper works for him, and even arrange to open an offshore bank account. 6. No capital investment is required. The shareholder is only required to sign up the agreement to declare that he will contribute capital to the company, and no actual capital investment is required. 7. Free use of company name. In other countries, some names are not free to use such as holdings, group,international ...., etc. However, in Hong Kong, the name is freely used, provided that they are not registered in Hong Kong, subject to other restrictive rules such as defensive words are not allowed to use. 8. It is easy to open an offshore bank account with using Hong Kong company. Hong Kong as an international city, offshore bank account is rather easy to open with using Hong Kong company, the investor is required to provide his address proof documents, and passport copy, Hong Kong company formation documents and a general description of his business. HSBC, as in international bank, can accept the above documents and open an offshore bank account with multi-currencies and internet banking facilities. If the investor needs to open an offshore bank account in other countries, overseas banks accept to open offshore bank accounts with Hong Kong company. 9. According to global statistics, Hong Kong is still No. 1 economy freedom. 10. Legal system remains using common law systems and equity rules as that applied in UK and Commonwealth countries. 11. The company is private in nature and is limited in liability. That means the shareholders who subscribe the shares are only liable up to the shares they pick up. For example, if the shareholder who pick up only US$1.00, his liability is only limited up to US$1.00. 12. Corporate shareholders and directors are allowed. In corporate structuring, for business reasons, the director(s) and/or shareholder(s) of Hong Kong company will be appointed by corporate company, even an offshore company. Hong Kong Company Law allows doing it. 13. Trust law is applicable in Hong Kong. For some reasons, if the businessman doesn't want his name be found in the Public Search, through trust arrangement, the trustee holds the shares for him (as a trustee), and the businessman (as a beneficiary). Trustee will sign up the Power of Attorney to the businessman so that the businessman can sign up the contracts, agreements for his business. It is valid, enforceable and effective in Hong Kong. Remember, in other countries, such as China, there is no such trust arrangement, even it is bettered done and structured, it is invalid.

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