Setup an Hong Kong Offshore Company
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Overview of a Hong Kong Offshore Company
Honk Kong is one of the most popular formation jurisdictions due to the city being an international center of information exchange, finance and trade. It is the third largest financial center in the world and the largest in South East Asia. Since the inception of Hong Kong’s offshore sector, it has had over a million companies incorporate, thanks in part by its regulatory environment and competitive tax system.
The Hong Kong company formation is a private corporation limited by shares. This is the most popular form of incorporation in Hong Kong. This type of company is an appropriate vehicle for a business that desires to limit its liability, seek solely private funding, and produce financial returns for its shareholders.
Currently, Hong Kong is the absolute best option out there for a multi-currency corporate account (16 different currencies), with internet banking at one of the largest banks in the world, in one of the world’s premier and largest offshore banking jurisdictions.
Only Hong Kong Private Limited Companies are eligible. Hong Kong offshore companies benefit from the jurisdiction not being on the list of worldwide 'tax havens', thereby avoiding potential complications from authorities. Offshore companies also benefit from a politically stable environment, a free port, free flow of capital and a freely convertible HK dollar, in a jurisdiction being ranked the freest economy in world for the 20th consecutive year.
Since the British handover in 1997, Hong Kong has become the gateway into China and with the development of the Closer Economic Partnership Arrangement (CEPA) economic and trade relations will continue to tighten. The new CEPA arrangement offers preferential access to China’s markets, adding another reason why international businesses choose Hong Kong as a their base of operations.
For more information on the Advantages of Hong Kong as an Offshore Financial Center, click here.
Table of Contents:
- Overview of a Hong Kong Offshore Company
- Advantages of a Hong Kong Company Formation
- Top Uses
- Key Corporate Features
- Registration Packages
- Requirements for Incorporation
- Corporate Details
Advantages of a Hong Kong Company Formation
There are a number of advantages in forming an offshore company in Hong Kong, including but no limited to:
- Hong Kong is major trading entity in its own right and is one of the largest importer and exporter centers in the world.
- Hong Kong incorporates more companies per annum than any other jurisdiction (about 50,000 each year).
- The vast majority of Hong Kong companies are conducting real trade business in the region, and do not serve as asset protection companies or vehicles, making HK more credible than other tax havens.
- Hong Kong is a well-known and respected jurisdiction that is not blacklisted anywhere.
- Forming a Hong Kong company through our special service allows you to obtain an account in Hong Kong with one of the largest financial institutions in the world without the usual requirement of reference letters of any type.
- A Hong Kong company is an essential element of doing almost any type of business in Mainland China.
- Hong Kong is a PayPal-approved jurisdiction and one of very few no-tax jurisdictions where it is possible to have an unrestricted PayPal account. (The only other two jurisdictions where this is possible are Cyprus and Gibraltar).
- World-class multi-currency banking is available with some of the largest international banks in the world.
- Good banking secrecy. The company can be anonymous if you use our nominee director/shareholder services or set up a foundation to own all the shares in the company.
- English is the main business and banking language.
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There are many uses for a Honk Kong Offshore Company. One can be set up and used for any legal purpose and for any legal activity, including but not limited to:
- International trading
- Asset protection
- Yacht registration
- Tax avoidance
- Protection and ownership of intellectual property
- Estate planning
- Share ownership in other companies
- Financial management
- Investment holding
- Leasing of other assets
- Ownership of intellectual property
However, a Hong Kong-based Offshore Company cannot undertake any business in the banking or insurance sectors unless the relevant licenses are obtained.
For more: Setup a Business in HK as an Expat
Key Corporate Features
|Hong Kong Company||Corporate Details|
|Type of Entity||Limited by Shares|
|Type of Law||English Common Law with local ordinances|
|Governed by||Companies Ordinance (Cap 32)|
|Registered Office in Hong Kong||Yes|
|Shelf company availability||Yes|
|Our time to establish a new company||1 Day – Ready-made Company |
6-7 Days – New tailor-made Company
|Minimum government fees (excluding taxation)||USD$295|
|Corporate Taxation||No (16,5% tax for profits derived in HK, offshore transactions are not subject to tax)|
|Access to Double Taxation Treaties||Yes|
|Share capital or equivalent|
|Standard currency||HKD Hong Kong Dollar |
(pegged to the USD1.0 =H KD 7.74)
|Minimum paid up||HKD 1|
|Usual authorized||HKD 10,000|
|Bearer Shares allowed||No|
|No par value shares allowed||No|
|Publicly accessible records||Yes (for anonymity Nominee Shareholders allowed)|
|Location of meetings||Anywhere|
|Corporate directorship allowed||Yes|
|Publicly accessible records||Yes (For anonymity Nominee shareholders allowed)|
|Corporate shareholder allowed||Yes|
|Location of meetings||Anywhere|
|Local or qualified||Yes (Local individual or corporate body)|
|Requirements to prepare||Yes|
|Audit requirements||No (Only if a Company does business within HK)|
|Requirements to file accounts||Yes|
|Publicly accessible accounts||No|
|Recurring Government Costs|
|Minimum Annual Tax / License Fee||USD $1200|
|Annual Return Filing Fee||USD $700|
|Requirement to file annual return||Yes|
|Migration of domicile permitted||No|
- Government Registration Fee (First year)
- Registered Office Address (First year)
- Registered Agent Services (First year)
- Company Secretarial Maintenance
- Certificate of Incorporation
- Memo & Articles of Association
- Appointment of 1st Directors
- Consent Actions of the BOD
- Share Certificates
- Register of Directors
- Register of Officers
- Register of Shareholders
- FREE Phone and/or email consultations
Requirements for Incorporation
- A clear photocopy of passport of each director and shareholder of the proposed company. If shareholder/director is another corporation, please provide us its certificate of incorporation instead;
- A clear photocopy of the recent residential address with proof of each director and shareholder of the proposed company. If the shareholder/director is another corporation, please provide us any document showing its registered address instead;
- The authorized share capital and par value per share respectively. If not otherwise provided by the client, we will apply for our standard authorized share capital. That is HK$10,000 divided into 10,000 shares of HK$1 each;
- The issued and paid up share capital. If not otherwise provided by the client, we will apply for the minimum issued and paid up capital;
- The shareholding amongst each shareholder if there is more than one shareholder;
- The name and address of any third party of 18 years old or above who will witness the shareholders’ signatures in the Memorandum and Articles of Association (M&A). Please be advised that the third party witness is also needed to sign in the M&A;
- The business scope of the proposed company;
- Three proposed company names in order of priority. The proposed company name can be of English or Chinese only or both.
A Honk Kong based Offshore Company benefits from many tax breaks including:
- No tax on capital gains
- No tax on earned interest on income
- No tax on dividend income
- No withholding tax
If a Hong Kong company’s trading or business activities are based outside Hong Kong, no income taxation will be levied in Hong Kong. Hong Kong companies with Hong Kong-sourced income currently pay a rate of taxation on profits of 16.5%. Panama has a similar territorial taxation system.
Type of Company
Private company limited by shares
Restrictions on Trading
A HK based offshore business cannot undertake any business in the banking, insurance or financial sectors unless the relevant licenses are obtained
Powers of Company
A Hong Kong limited liability company has all the powers of a natural person
Language of Legislation and Corporate Documents
Both Chinese and English are used in business and either one of the two languages can be used.
The official languages are English and Chinese, with English being used in the commercial and political sectors.
A company must maintain a registered office in Hong Kong
Shelf Companies Available
Yes, shelf companies are commonly used
Time to Incorporate
A new, tailor-made company can be formed in 6-7 working days; whereas a ready-made company can be completed within (1) one business day
A name that:
Is similar to or identical to an existing company
Is deemed contrary to the public interest
Implies government patronage
Names Requiring Consent or License
Building society, Chamber of Commerce, chartered, co-operative, mass transit, municipal, savings, tourist association, trust, trustee, underground railway, bank, insurance, assurance, reinsurance, department.
Disclosure of Beneficiary Ownership to Authorities
The particulars of the shareholder(s) are available to the general public. Using a nominee service or a foundation to hold the share(s) can preserve anonymity.
Compliance Authorized and Issued Share Capital
The standard authorized share capital is HKD10,000. The minimum issued capital is one share of HKD1 each.
Classes of Shares Permitted
Ordinary shares, preference shares, redeemable shares and shares with or without voting rights.
Company incorporated in Hong Kong is not allowed to issue bearer shares. However, utilizing nominee services, setting up an offshore IBC or foundation to hold the share(s) can achieve privacy.
Financial Statement Requirements
Hong Kong companies are required to prepare full audited accounts under the company laws. Also, a copy of the audited financial statements is to be furnished with Inland Revenue Department together with Profits Tax Return. The audited financial statements are not available to the public or to the foreign authorities except those of a listed company.
A minimum number of one (1) director is required and full details of these must be filed with the Companies Registry and are available for public inspection. The director(s) can be of any nationality and be resident anywhere. Corporate nominee directors are permitted.
Every private Hong Kong limited company must appoint a company secretary, who may be an individual or a corporate entity, but the company secretary must reside in Hong Kong; if a corporate entity acts as company secretary, it must have a place of establishment in Hong Kong.
A minimum number of (1) one shareholder is required whose details are filed on the Companies Registry and are available for public inspection. Corporate shareholders are permitted and anonymity can be achieved by the use of nominee shareholders or offshore IBC holding company or foundation. The shareholder(s) can be of any nationality and be resident anywhere in the world.
Type of Law
English Common Law
Principal Corporate Legislation
Companies Ordinance (Cap 32)
Annual Maintenance Fees
Annual maintenance fee is estimated is at US $1,200, which covers annual filing fee, annual company secretary fee, annual business registration fee and annual registered office fee.
In addition to the above there is the statutory audit fee, which for most situations will be US$700. An exact quote can be provided if operations are extensive, complex or if there are local operations to consider.
Once a bank account is pre-approved, our client must physically be present to sign the documents at the bank in Hong Kong.
Double Taxation Avoidance Agreements
Hong Kong has Double Taxation Avoidance Agreements (DTC’s) with: Austria, Belgium, Brunei Darussalam, Canada, China, Czech Republic, France, Guernsey, Hungary, Indonesia, Ireland, Italy, Japan, Jersey, Kuwait, Liechtenstein, Luxembourg, Malaysia, Malta, Mexico, Netherlands, New Zealand, Portugal, Qatar, Spain, Switzerland, Thailand, United Kingdom, and Vietnam.
Hong Kong Company Formation Procedure with Offshore Protection
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