Home / Offshore Business Entities / Hong Kong Entities
Hong Kong offshore business entities are increasingly becoming commercial vehicles by entrepreneurs throughout the world. Often time, Hong Kong is referred to as an offshore tax haven because of its investor friendly international business climate, favorable system of taxation and numerous tax incentives geared at stimulating private enterprise. Such an environment for Hong Kong offshore business entities encourages local entrepreneurship as well as foreign investors to consider Hong Kong as a domicile and potential market for business.
Some of the factors which work in the favor of Hong Kong offshore business entities and domestic companies include the level playing field which exists for both local and foreign businessmen in terms of taxation given that tax rates and incentives are neutral, the absence of restrictions of foreign ownership of Hong Kong offshore business entities and free trade benefits that are available to Hong offshore business entities under various free trade agreements and the CEPA (Closer Economic Partnership Arrangement).
Hong Kong companies are generally treated as resident or non-resident companies for tax purposes given that taxes in Hong Kong are applied based on the country in which a company is managed and controlled and source of income. As a result, Hong Kong companies are relieved from tax on offshore income, profits and on activities that would otherwise have been taxable if undertaken in Hong Kong as long as the beneficial owners do not reside in Hong Kong, income is sourced and management and control occur outside of Hong Kong’s jurisdiction.
Hong Kong companies which operate offshore are thus tax exempt entities, and as such can be considered Hong Kong offshore companies, similar to Seychelles company. However, since there is no ‘formal’ offshore regime established various corporate structures which can be incorporated and registered in Hong Kong can be used as offshore companies in order to conduct international trade. Currently, the corporate tax rate for Hong Kong companies is set at 16,5% after having been reduced from 17,5%. A further decrease to 15% is expected to be implemented as Hong Kong seeks to maximize competitiveness as an international business center and investment hub.
All Hong Kong offshore and onshore business entities are required to register with the Business Registration Office at the Inland Revenue Department and annual registration certificates must be obtained upon payment of renewal fees. Registration Certificates are obtainable at a special discounted rate if obtained for a three year period. Once a Hong Kong company begins to operate, registration must be done within one month.
Copyright © TaxHaven.org
|