Hong Kong Vs. Offshore Companies
Click here for an interactive map giving information about offshore companies.
As a low tax (17.50%) jurisdiction and an international financial centre, Hong Kong has been a popular jurisdiction for incorporating companies to be used as holding companies or investment vehicles. Hong Kong companies are cheap to set up and any 1 individual or corporate entity can act as directors and shareholders. There is no requirement for directors and shareholders to have Hong Kong passports or residency. However, in the last 10 years, with the influx of tax planning work for immigration or estate duty reasons, accounting, law firms and more importantly banks and brokerage houses have also come to accept offshore companies as credible and preferred structures for holding a portfolio of offshore assets. Amongst offshore companies, the fastest rising star in the last twelve years has been the British Virgin Islands company.
BVI companies have been so successful as they are cheap to set up and still provide confidentiality of shareholders and directors. BVI companies also operate under English law which make them easy to understand especially for Hong Kong professionals. However, recently with the OECD initiatives, in a couple of years' time, the confidentiality of directors and shareholders' details may be threatened. BVI Mutual Funds set-ups have grown exponentially in the last couple of years. Samoa and Belize companies have soared in popularity because they provide Memorandum & Articles of Association in Chinese. Mauritius GBL1 companies are now being used to take advantage of Double Tax Treaty Networks. Mauritius GBL2 are interesting alternatives to BVI, Samoa and Belize Companies. The only acceptable jurisdictions for floatation in Hong Kong are Bermuda, Cayman Islands and Hong Kong. Bermuda is a popular choice for listed companies but the incorporation and maintenance costs of a Bermuda company are extremely high. There is also the added requirement of having to appoint local directors.
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