Hong Kong is a popular location for businesses looking to establish an offshore presence due to its strategic location, favorable tax regime, and business-friendly environment. Obtaining offshore status in Hong Kong can offer numerous benefits for businesses, including tax savings, enhanced privacy, and access to international markets. In this blog, we will discuss how to obtain offshore status in Hong Kong and the benefits it can offer for your business.
What is offshore status in Hong Kong?
Offshore status in Hong Kong refers to the registration of a non-Hong Kong company in Hong Kong for the purpose of conducting business outside of Hong Kong. Offshore companies in Hong Kong are often referred to as “exempt private companies” and are not subject to Hong Kong’s profits tax on income derived outside of Hong Kong.
How to obtain offshore status in Hong Kong?
To obtain offshore status in Hong Kong, a company must register as an exempt private company with the Companies Registry of Hong Kong. The registration process involves the following steps:
- Incorporate a non-Hong Kong company: Before registering as an exempt private company in Hong Kong, a company must first incorporate a non-Hong Kong company in its country of origin. The company must then obtain a Certificate of Incorporation and a Business Registration Certificate.
2. Apply for registration as an exempt private company: After incorporating a non-Hong Kong company, the company can apply for registration as an exempt private company with the Companies Registry of Hong Kong. The application must include the company’s Articles of Association, Certificate of Incorporation, Business Registration Certificate, and a completed Form NAR1. - Meet the requirements for an exempt private company: To qualify as an exempt private company, a company must meet the following requirements:
- Have no more than 50 shareholders
- Prohibit the transfer of its shares to the general public
- Prohibit the invitation to the public to subscribe for any shares or debentures of the company
- Maintain compliance: Once registered as an exempt private company, the company must maintain compliance with Hong Kong’s laws and regulations, including filing annual returns and financial statements.
Benefits of obtaining offshore status in Hong Kong
Obtaining offshore status in Hong Kong can offer numerous benefits for businesses, including:
- Tax savings: Exempt private companies in Hong Kong are not subject to Hong Kong’s profits tax on income derived outside of Hong Kong, which can result in significant tax savings for businesses.
- Enhanced privacy: Exempt private companies in Hong Kong are not required to disclose their shareholders or directors in the public registry, which can offer enhanced privacy for businesses.
- Access to international markets: Hong Kong’s strategic location and business-friendly environment can offer businesses access to international markets and opportunities for growth.
- Reduced regulatory requirements: Exempt private companies in Hong Kong are subject to reduced regulatory requirements compared to non-exempt companies, which can result in lower compliance costs for businesses.
Conclusion
Obtaining offshore status in Hong Kong can offer numerous benefits for businesses, including tax savings, enhanced privacy, and access to international markets. To obtain offshore status in Hong Kong, a company must register as an exempt private company with the Companies Registry of Hong Kong and meet the requirements for an exempt private company. By obtaining offshore status in Hong Kong, businesses can take advantage of the benefits that Hong Kong has to offer and position themselves for success in the global marketplace.
