What Are the Benefits Of Offshore Company Formation?

November 30, 2020

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Benefits of Hong Kong Corporation Formation. There are so many advantages to foreigners wanting to open an offshore company in Hong Kong. These advantages include the following:
Limited Liability: It is not necessary to have residency in Hong Kong for Hong Kong company formation. The limited liability of the offshore company means that it cannot be held responsible for any debt or losses if a shareholder or officer is found guilty of any fraud or mismanagement of funds. You also do not need to provide a complete business history to your offshore company, and it can be challenging to get the company registered in Hong Kong.
Ease of Opening: The only tricky part of setting up an offshore company is opening a bank account or opening a branch and registering it in the country where your business is based. It can also be challenging to establish an offshore company in countries like India, Singapore, or Australia, where they have a different type of business law. Your company cannot operate in such countries unless you appoint an experienced local lawyer to help you set up the offshore company.
Offshore Accountancy: The Hong Kong Companies Act restricts foreign companies from owning more than a single share of a company within the territory. It is advisable to create a separate company within the jurisdiction where your business is based. The offshore company does not have the same obligations as your local company.
No Registration with HK SARFT: The Hong Kong Companies Act allows all companies to operate under the same name. However, you can use the initials of your company as a legal shield, and this can be used when it comes to establishing an offshore company in Hong Kong. It can help you avoid having your company registered under the Hong Kong SARFT.
No State Tax: The tax laws on company formation in Hong Kong allow any foreign individual or company to register their company without having to pay any income or corporate tax to the government. It helps you to save a lot of money on taxes. On the other hand, if you are planning to open a branch in Hong Kong, you will be required to pay state taxes.
No Capital Investment: Because the company is not registered with the government, you do not have to put up any capital for its start-up. It makes it very flexible and straightforward to start up your business. It is especially beneficial for people who want to start their own company and do not have the financial resources to invest in commercial properties.
No Licensing: The Hong Kong Companies Ordinance does not require foreign companies to obtain a license to operate in Hong Kong. It means that there are no formalities to be completed to be able to open an offshore company in Hong Kong.
No Compliance with Tax Laws: Under the Companies Ordinance, the offshore company will be considered a “non-registered” company. You can choose to run your business in Hong Kong without being registered in the office of the Secretary for Revenue. It enables you to be able to escape paying taxes and avoid paying penalty fines. In case you need to pay back taxes in the future.
No Compliance withLabour Law: The Labour Law prohibits the outsourcing of employees within the territory. It means that you do not have to pay any tax to the government for your overseas employees. It enables you to hire workers from other countries without paying any employment taxes.
No Compliance with Health and Safety Laws: Specific guidelines and laws are governing the foreign company’s compliance with the Hong Kong Safety and Health Ordinance.
The benefits, as mentioned above, are just some of the benefits that you can get when you decide to open an offshore company in Hong Kong. If you want to experience all of them, make sure that you work with a reliable offshore company that offers you all the benefits.


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