Forming an offshore company in Hong Kong is the most common reason people choose a different type of business arrangement. Companies that establish an offshore entity in this part of China can enjoy many advantages. Aside from the fact that they do not have to share their property with their partners overseas, they also have more privacy when they do business in Hong Kong. They have the freedom to choose their partners and invest in different parts of the world without having to comply with each country’s rules and regulations.
Most importantly, establishing an offshore entity in Hong Kong provides its clients with the benefits of not paying corporate tax on income derived outside the country. You can typically get this type of service if you purchase shares or assets in your company that are not local. However, there are several other benefits of Hong Kong offshore company formation.
As previously mentioned, there are several benefits to company formation in Hong Kong. These include the lowest tax rate in the entire world. Companies that have local owners pay higher rates than those that are foreign-owned. For this reason, many choose to set up an offshore entity in Hong Kong. The low corporate tax rate alone is worth many thousands of dollars in savings annually.
There are two types of companies that can be set up offshore in Hong Kong. One is a Limited Liability Company or LLC, which only has one director. Two directors are allowed, but it is recommended that you have just one director if something happens to the sole director. A Limited Liability Company also does not need any legal documents to start-up; all one needs is a signed agreement between you and the company.
Once you have chosen the type of business you want to establish, you must decide where you will have your registered office. In Hong Kong, you will need to select a location for your registered office. If you wish, you can also have your office space located anywhere globally, if the company has a permanent address in that location.
After choosing your location and registered your company, you should prepare all the legal documentation required for the formation process. Among the documents, you will need the IRS application forms and the business capital or insurance registration. You will also need to obtain a copy of the Articles of Association of the company and its bylaws. You can purchase these online or from a bookshop. Once you have all the required documents, you are now ready to go forward and make a trip to the bank to complete the financial institution’s business setup. During this time frame, you will be asked to provide the original documents as well as a power of attorney that will be used by the company to sign business contracts.
At this point, it is essential to note that there are two types of businesses in Hong Kong: The Limited Liability Partnership (LLP) and the Sole proprietorship, also known as the SIP. With an LLP, a company has only one actual address, which is its office. Business transactions between the partners in an LLP are completed through a secretary, known as the secretary-general. A sole proprietorship has no physical address, and all business transactions are made through a director. Businesses with both LPs and a sole proprietorship must follow the rules regarding double taxation.
There are two options available for those wishing to engage in Hong Kong company incorporation in terms of the paperwork. If you choose to use an offshore company incorporation service, then all paperwork will be done at the location where the company is registered. Alternatively, the paperwork can be done at the client’s site. When using an offshore company incorporation service, ensure that you are using a reliable company incorporation service provider that follows up regularly, has accurate information, and provides straightforward answers and clarifications. An effective company incorporation solution will help your company gain increased visibility and online presence and increase your ability to accept and process payments.