International Business Companies (IBCs) are offshore corporations (companies that are incorporated outside the parent country of the owners/shareholders) established under the laws of a country as a tax neutral establishment.
There is still “real” privacy in Hong-Kong
Many Northern American and European countries have stringent privacy, financial, fiscal and regulatory laws that severely limit the ease of doing business. However, there are a few countries (for example, Hong Kong, Singapore, Gibraltar, Macau etc…) that have less restrictive regulatory environments that make doing business much easier. Savvy investors and businessmen (especially the ones engaging in international or offshore businesses) prefer to base their companies in these more business-friendly countries and operate out of them.
One way to identify International Business Ccompanies is that, even if their activities are taxable in other countries, they are generally not taxable in the country where they were incorporated. For example, the profits of IBCs in Hong Kong are not taxed except they earn up to 16.5% of their net profits from doing business in Hong Kong.
Another unique characteristic of an IBC is that the identity and confidentiality of the beneficial owners of the company can be protected. In many of the countries allowing incorporation of IBCs, a beneficial owner can appoint a nominee director and/or shareholder to act as the ‘figurehead’ of the company, while the beneficial owner retains the power to run the company and manage its day to day activities.
IBCs also have extensive corporate powers to carry out a wide range of business activities with minimal restrictions. In Hong Kong, IBCs are allowed to have wide object clauses which can include many unrelated businesses. However, there are some businesses that require a company to have permits or licenses. In Hong Kong, with the right permits and licenses, where necessary, IBCs are free to engage in most lawful businesses.
Another characteristic of IBCs is that there is no requirement to show corporate benefit before incorporating the company or doing business. It is also not mandatory for IBCs to issue shares (whether bearer or registered shares) to other persons or to the general public. IBCs are also not required to appoint local shareholders, directors or other officers to the company. Foreigners are free to wholly own an IBC without local input. However, it is noteworthy that IBCs in Hong Kong are mandated to have a local registered office address and appoint a company secretary who is resident in Hong Kong.
IBC is polymorphous
IBCs can be used for a lot of purposes. They can be operated as special purpose entities, assets protection tools and avenues to deliver professional services. You can use your IBC to buy and sell goods and services, open a bank account and carry out many different business transactions.
Your IBC can also be used to hold real property, shares, bonds and other investments. As a professional, you can register your intellectual property and franchises using an IBC. IBCs also allow you to carry out online businesses and deliver personal services to your clients while working offshore.
Again, having an IBC allows you to open an offshore corporate bank account in Hong Kong. Having a corporate offshore bank account easily allows you to carry out international trade and investment transactions. IBCs also help to avoid limitations (for example sanctions and embargoes) that make international business difficult.
Pros of establishing an International Business Company in Hong Kong (IBC)
IBCs in Hong Kong are not required to pay tax on income, provided they don’t earn up to 16.5% of their net profits from doing business in Hong Kong.
Minimal Business Restriction
Having an IBC in Hong Kong allows you to freely operate your business with minimal regulation from the government. You are free to engage in most business activities without having a license or permit. The ability to conduct your business with minimal regulation gives you the needed flexibility and freedom to grow your business.
Fast Incorporation Process
Incorporating an IBC in Hong Kong could be done within 7 days. You only need to provide relevant documents, pay necessary fees and take the appropriate steps to register your Hong Kong Company.
The KYC procedures required by the Company Registry in Hong Kong are not as stringent as that of many other countries. With a reliable and efficient business set up consultant, incorporating your Hong Kong IBC is a relatively easy process.
Top Notch Financial Services
Hong Kong is a major international financial center with some of the world’s biggest banks offering financial services. You have a wide range of options in opening an offshore bank account in Hong Kong and opening an offshore bank account in Hong Kong is relatively easier than in most countries. Having a Hong Kong based IBC allows you take better advantage of the top notch financial services rendered by Hong Kong banks. Your financial assets are also protected in Hong Kong and you are free to own high-end assets like yachts, real estate and gold without inquisition from the authorities.
In today’s business world, IBCs are becoming the safe and reliable option in doing international business
They are becoming increasingly popular with entrepreneurs and investors who are looking for the opportunity to maximize the potential of their businesses.
Setting up an IBC in Hong Kong can be a complex and intimidating process for a foreigner. However, using the services of a competent business set up consultant makes it much easier. Contact us if you need assistance in establishing an International Business Company in Hong Kong.