KAW PING Co., CPAs (BWKP)'s LOGO' KAW PING Co., CPAs (BWKP)KAW PING Co., CPAs (BWKP)

Offshore Company Hong KongHong Kong Hong Kong

1.Introduction

(1) Geographic Location

Geographic Location of Hong Kong

Hong Kong is located in the southeast of mainland China by the South China Sea. It is also in the center of East Asia, a quickly developed region, providing it with an extraordinary geographical location. Hong Kong is sized around 1,100 km2 and consists of three parts: Hong Kong Island, Kowloon Peninsula, and the New Territories.

(2) Economy

Hong Kong Island was ceded to Britain in 1842 and returned to China in 1997. At the moment, it is the world’s 11th largest trading entity and has an very good financial environment with no restrictions on cash flow. The Hong Kong Special Administrative Region is an administrative jurisdiction of the Government of the People’s Republic of China, but with sovereignty remained.

(3) Tax System

Regarding corporate income tax, as Hong Kong has adopted a territorial tax system, only income generated in Hong Kong will be taxed. In other words, income generated from regions outside Hong Kong are exempt from tax. It includes income from triangular trade (or even multangular trade), where Hong Kong is only a transit port and offices in Hong Kong earn money from switch bill keeping products outside Hong Kong. The said income and derived capital gains, dividend income, dividend remittance, interests and royalties are truly a great profit for companies that make reinvestment to mainland China through Hong Kong and those who work in Hong Kong. Hong Kong is also an important sales and marketing channel agent for Taiwanese companies that wish to have a business development in mainland China. Furthermore, after the launch of China's new tax law in 2008, mainland Chinese companies deduct only 5% (was 10%) from the amount when distributing stock dividend to Hong Kong shareholders, providing them with a great tax advantage.

2. Conditions and Advantages of Establishment

  • Scope of Applications Triangular trade and investment companies.INVESTMENT IN MAINLAND CHINA
  • Registered Capital GenerallyHKD 10,000
  • Shareholders 1
  • Directors One secretary of local company is required.
  • Secretaries One secretary of local company is required.
  • Stock Issues Registered
  • Company Information Information of directors and shareholders shall be provided to the government’s registration unit for reference. As all information shall be disclosed publicly, there is no privacy.
  • Annual declaration Required
  • Annual Report and Income tax Declaration Companies of Hong Kong shall declare tax and submit annual report to the registration unit every year. Where the declared information is mistaken or delayed, a penalty may be imposed. Besides, all companies’ financial statements must be audited by local CPAs.
  • Tax Burden Income tax is 16.5%; no tax for income generated outside of Hong Kong.
  • Whether to mark its Chinese name. Yes
  • Business registration certificate Shall receive a business registration certificate from Inland Revenue Department (IRD) of Hong Kong and the certificate must be renewed every year.
  • Working days required to set up the company. (1) Listed company: 20 to 25 working days.
    (2) Self-named company: 30 working days.