International Incorporations

What is offshore company?

Offshore company is the same as any other company registered legally in an jurisdiction. An offshore company is a company incorporated outside the jurisdiction of its primary operations. An offshore company usually has a low and simple tax regime and is specifically used for international wealth management purposes.

Most of these offshore jurisdiction does not permitted those offshore companies to engage in business within the jurisdiction which it is incorporated.

Why business owners should consider to setting up an offshore company?

Some offshore jurisdictions offer a variety of benefits to attach inbound investments by setting up companies in their jurisdictions. Typically, business owners should enjoys the advantages as follows:

• Simplified accounting and audit requirements
• Robust and simpler legal frameworks in business maintenance
• Freedom of access to capital
• Solid legal system
• Faster establishment

What are the common uses of offshore companies?

Offshore companies are being widely used for trading, investment, property & asset holding, estate & succession planning, financing, listing on international stock exchanges and acquisition transactions.

HKEx, the stock exchange market in Hong Kong, accepts the companies incorporated outside Hong Kong to be listed. For the latest list of approved jurisdictions, please visit here.

What is shelf company?

Shelf company, or commonly known as ready-made company, is a legally established company which has been incorporated in the jurisdiction involved, this company has already set up at an earlier date but which has neither carried out any business activity nor bank account opening. The incorporation process involves standard authorized capital/shares and Memorandum & Articles of Association (M&A) which guarantees that every shelf company is completely clean and identical for re-sale.

The company is set up with intention for somebody buy it at some point. The legislation and thus the incorporation documents, ongoing compliance and renewal fee do not differ from those of a new incorporated company.

To business owners, the only drawback of acquiring a shelf company is that it is not possible to erase the record of the original company name but it can only be modified after the purchase.

What is Registered Agent during incorporation in offshore jurisdictions?

By the companies law in some offshore jurisdictions, the directors of a company may appoint any person to be an agent of the company.

Subject to the Memorandum and Articles of Association, such agent may have powers and authority as the directors. However, such agent shall have no authority to amend the Memorandum or Articles; to appoint directors or agents; to approve a plan of merger, consolidation or arrangement; or to make a declaration of solvency or approve a liquidation plan.

Registered Agent is usually required that it must be acted by the local person residing in the company of such company incorporated.

In those offshore jurisdictions where confidentiality of incorporation is one of the key features, mostly the details of the offshore companies beneficial owners, directors and shareholders are not part of public record due to not filing to governments. Registered Agent is the only company’s member to know the Register of Members, Register of Directors and all Minutes and Resolutions by the company, and these documents and information are kept only at the offices of the company Registered Agent, the office is located in the country of company incorporation.

What are the most popular offshore jurisdictions?

• Hong Kong
• British Virgin Islands (BVI)
• Seychelles Islands
• Samoa Islands
• Mauritius
• Cayman Islands
• Anguilla
• Nevis
• Bahamas Islands
• Bermuda Islands
• Belize

Background:

Hong Kong has been rated “the world’s freest economy” for over 20 consecutive years by the Heritage Foundation’s Index of Economic Freedom among over 150 countries/regions. Renovated as an international financial hub, Hong Kong is the favored by worldwide investors thanks to the established legal system, simple and low taxation regime, and well-equipped infrastructure, and high quality professionals. Since a BVI company offers high degree of privacy protection to its owners, BVI government require minimal information for submission and filing. BVI company is also not required to pay tax, nor bound to foreign exchange controls. many multinational enterpries and high net worth individuals are attracted to BVI company registry and making BVI as one of the most popular places globally for offshore registration.

Stock exchange market in Hong Kong is well-developed. Hong Kong Stock Exchange (HKEx) is the 2nd largest stock exchange in Asia and the 6th largest one worldwide in terms of market capitalization.

Hong Kong is the platform for worldwide investors to do business around the globe. The city offers unlimited business opportunities, closely connects with the fastest economy in Greater China and supports worldwide commerce. Tens of thousands of international enterprises are benefited from establishment of a local limited company in Hong Kong.

Hong Kong is located in eastern Asia, on the southeast coast of the People’s Republic of China.

Start your global business, invest in Hong Kong.

Why incorporate in Hong Kong?

• Common legal system
• Clean government
• Gain credit to your business from Hong Kong’s financial reputation
• Versatile financing channels
• Absence of foreign exchange controls
• Stable currency
  • solid currency peg USD7.75~7.85 to HKD1
• Minimal restriction to enter market
• Low taxation rate
  • only 3 direct income tax on profits, salaries and real estate’s income
  • No VAT/GST, capital gain tax
  • only income sourced in / derived from territory of Hong Kong is tax chargeable
  • 2 -tier Profits Tax rate: 8.25% on the first HK$2,00,000 of the chargeable profits of business, 16.5% on the remaining
• Simple tax declaration
  • Annual tax return, annual audit of accounts
• Low cost company registration and maintenance
  • Registered capital of a “private company” is “on-paper”

The type of company for general business in Hong Kong:

• Private Company Limited by Shares

General Requirement:

• At least one shareholder and at least one natural person director who aged 18 years old or above, regardless of their residency and nationals.
• At least one statutory company secretary taken by a Hong Kong company.
• One physical address in Hong Kong as registered office address

Formation methods (Government lead time):

• incorporation of a new company via electronic submission (1 day)
• incorporation of a new company via hard copy submission (5 days)
• purchasing of a shelf company (2 days)

Required Information:

• Company Name: a pair of Traditional Chinese and English names, or single Chinese or single English name
• Copies of ID cards or passports of shareholders and directors
• Registered office address of the company

Background:

British Virgin Islands (BVI) is a member of the British Commonwealth, the jurisdiction applies a legal system based on English Common Law (its Business Company Law includes some terms in Delaware Law), which operates in concert with local acts.

Since a BVI company offers high degree of privacy protection to its owners, BVI government require minimal information for submission and filing. BVI company is also not required to pay tax, nor bound to foreign exchange controls. many multinational enterpries and high net worth individuals are attracted to BVI company registry and making BVI as one of the most popular places globally for offshore registration.

BVI is a group of about 40 islands situated the Atlantic and the Caribbean.25 minutes flight time will reach east of Puerto Rico.

Why incorporate in BVI?

• High degree of privacy protection to business owners and their wealth
• without disclosing shareholders and directors to the government
• Submission of audited accounts is not required
• No tax shall be declarable and payable
• Registered capital of a BVI company is not required

General Requirements:

• There shall be at least one shareholder and director over 18 years old
• There shall be a local person or company to act as agent

Standard Registered Capital:

• 50,000 shares

Required Information:

• Chinese and English names of company
• Copies of ID cards or passports of shareholders and directors

Method of Incorporation (Government and processing lead time):

• Registration of a new company (12 days)
• Purchasing a Shelf Company (3 days)

Background:

Seychelles, the Republic of Seychelles, is an member of the British Commonwealth. Seychelles is composed of 115 islands in the Indian Ocean. Its official currency is the Seychelles Rupee, a free float currency.

The Seychelles Company is mainly divided into two categories: International Business Company (IBC) and Company Special License (CSL). In general, IBC is more commonly registered and it is a more popular and versatile type of offshore corporation to attract international businesses.

Seychelles applies the IBC Act as its main companies’ act which offers favorable company incorporation, operation, taxation and privacy protection to oversea businesses.

Why incorporate a Seychelles IBC?

• Provide privacy protection, without disclosing shareholders and directors
• No tax shall be declarable and payable for offshore business activities or transactions
• Chinese company name is allowed.
• Absent of exchange control to promote capital raising

General Requirements:

• At least one shareholder and director, without nationality restrictions
• Local registered address

Standard Registered Capital:

USD 1,000,000

Required Information:

• Chinese and English/French names of company
• Copies of ID cards or passports of shareholders and directors
• Local registered office address

Method of incorporation (lead time)

• Registration of company (16 days)
• Purchasing a Shelf Company (7 days)

Background:

Samoa, independent from New Zealand since 1962, has well-developed offshore corporate service, many well-known accounting firms and law firms set up their offices in this country. At present, there are 3 retail banks in Samoa.

The China Embassy in Samoa favors Chinese nationals to invest in this country, it is helpful to apostolic and certify the documents needed to operate in China.

Samoa is a group of 9 islands in the South Pacific Ocean, east of the International Date Line.

Why incorporate in Samoa?

• Provide privacy protection, without disclosing shareholders and directors
• High degree privacy protection shareholders and directors
• No direct tax shall be declarable and payable
• Low annual license fee from government
• Considerable discount will be given for 5 to 20 years license
• Chinese company’s name can be shown on the certificate of incorporation
• Company can provide its documents in any language
• Convenient and effective entrepreneur relocation

General Requirements:

• at least one shareholder, director and company secretary
• the registers of directors, secretary and shareholders and the registered office address

Standard Registered Capital

• USD 1,000,000

Required Information:

• Chinese and English names of company
• Copies of ID cards or passports of shareholders and directors

Method of incorporation:

• Registration of company (15 days)
• Purchasing a Shelf Company (3 days)

Background:

Mauritius, an island country situated in the Indian Ocean and approximately 1,200 miles from the southeast coast of Africa, is a democratic republic with a population in excess of 1 million. Stable political environment, complete communication facilities and well-devloped financial services committed by Mauritius government, Mauritius has been the major offshore business and financial hub for multinational firms to setup their offices in the African and Indian regions.

Mauritius legal system is a hybrid of both English and French law system due to its history of British and French coloniztion, people are multiethnic, they are manly of Indian, African, French and Chinese. and they are multilingual: English, French, and Asian languages are used.

Mauritius-based international business company (GBL2) has similar feature to a BVI international business company (IBC) where no tax is declarable or payable except for an annual license fee, this is a popular choice of business operation for oversea investors.

Why incorporate in Mauritius (GBL2)?

• No tax shall be declarable and payable by an international business company
• No requirement to submit annual return
• High degree of privacy protection to shareholders and directors no disclosure of their information

General Requirements:

• At least one shareholder and director
• Local registered address

Required Information:

• Chinese and English names of company are acceptable
• Copies of ID cards or passports of shareholders and directors

Method of incorporation (lead time):

• Registration of a new company (6 weeks)

Background:

Cayman Islands, located in the West Caribbean Sea and south to Miami, is a member of British Overseas Territory. Cayman Islands is one of the two traditional offshore jurisdictions (another is Bermuda) accepted by Hong Kong Stock Exchange for listing of oversea companies in Hong Kong during the era of British Hong Kong.

Cayman Islands is the leading financial centre in the Caribbean with the presence of over 500 licensed banks and trust companies.

Companies laws in Cayman Islands is based on British Common Law system, by which two categories of companies are available, Exempted Company and Non-Resident Company. Exempted Company is a more popular business form for oversea investors, the its tax advantages thanks to its tax advantages.

Why incorporate in Cayman Islands?

• Provide privacy protection, without disclosing shareholders and directors
• Honorable reputation since Hong Kong Stock Exchange allows Cayman Islands companies listed in Hong Kong.
• No direct tax shall be declarable and payable
• Chinese company name can be shown in the Certificate of Incorporation
• Absent of foreign exchange control, easy to raise capital

General Requirements:

• at least one shareholder and director
• either corporate or individuals can act as shareholders and directors without restriction on their nationals and residency

Standard Registered Capital:

• USD50,000

Required Information:

• Chinese and English names of company
• Copies of ID cards or passports of shareholders and directors

Method of incorporation

• Registration of company (30 days)

Background:

Anguilla, a British Overseas Territory, is a tax neutral jurisdiction where all registered companies are entitled to zero direct tax preference. Anguilla government does not distinguish between local and overseas offshore companies, it attracts many worldwide investors to register their companies here.

Anguilla is a Caribbean island country situated 100 miles east of Puerto Rico and the neighbor of British Virgin Islands (BVI). This Island is politically and economically stable, with a government-controlled system over its financial services industry.

Why incorporate in Anguilla?

• No direct tax shall be declarable or payable
• Company name can be Chinese name
• No requirement to submit annual returns
• High degree of privacy protection to shareholders and directors and their wealth

General Requirements:

• At least one shareholder and director
• A local person or company to act as agent
• Local registered office address

Standard Registered Capital:

• USD 1,000,000

Required Information:

• Chinese and English names of company
• Copies of ID cards or passports of shareholders and directors

Method of company formation (lead time):

• Registration of company (14 days)
• Purchasing a Shelf Company (3 days)

Background:

Marshall Islands, The Republic of the Marshall Islands (RMI) officially, is a Micronesian nation of over 1200 islands in the middle of the Pacific Ocean situated nearly between Hawaii and the Philippines. The official language is the Marshallese and the second spoken language in English. Official currency is the US Dollar.

The Marshall Islands are a popular offshore financial center that provides corporate and commercial services to non-resident individual and companies thanks to the protection of financial assets, confidentiality and tax advantages provided by the government.

Why incorporate in Marshall Islands?

• No tax shall be declarable and payable by Marshall Islands IBC
• It is not required to disclose information concerning shareholders and directors
• Company can issue bearer shares
• It is not required to submit annual returns, accounts or financial statements
• No exchange controls, and easy to pool capital
• There is a stable political, economic and trading environment

General Requirements:

• At least one shareholder and director
• Local registered office address

Standard Registered Capital:

• US 50,000

Required Information:

• English name of company
• Copies of ID cards or passports of shareholders and directors

Method of company formation (lead time):

• Registration of company (14 days)
• Purchasing a Shelf Company (4 days)

Background:

Nevis, an small island of 83 square kilometers in the Caribbean Sea, is situated 1,600 kilometers south of Miami. The jurisdiction applies English Common Law. The official language is English.

With no exchange control, business registered in Nevis enjoy easy assess to financial channels and raise capital.

Nevis provide a stable political, economic and trading environment for worldwide investors.

Why incorporate in Nevis?

• No direct tax shall be payable by offshore business activities
• No requirement to disclose information concerning shareholders and directors
• No requirement to submit annual returns, accounts or financial statements
• Nevis company can issue bearer shares
• No required to appoint local directors

General Requirements:

• At least one shareholder and director
• Local registered office address

Standard Registered Capital:

• USD 100,000

Required Information

• English name of company
• Copies of ID cards or passports of shareholders and directors

Methods of incorporation

• Registration of company (15 days)
• Purchasing a Shelf Company (4 days)

Background:

Bahamas, Commonwealth of The Bahamas officially, are a group of more than 700 islands located from Caribbean Sea to the South East of Florida, USA and have been an independent member of the British Commonwealth since 1973.

The Bahamas Companies Act is regulated by the IBC Act which in turn is based on the BVI IBC Act. The Bahamas IBC Act permits related persons to set up special purpose vehicles (SPV), i.e. finite companies.

Why incorporate in Bahamas?

• Provide privacy protection, without disclosing any information of shareholders and directors
• No direct tax shall be declarable and payable
• It is not required to declare the beneficial owner
• It is not required to declare financial conditions
• Company secretary is not required

General Requirements:

• At least one shareholder and At least one director (either individual or corporate are allowed.)
• Bearer shares cannot be issued

Standard Registered Capital:

• USD 50,000

Required Information:

• At least 1 shareholder and director (can be corporate or individual, with no nationality and residency limitation)

Method of incorporation:

• Registration of company (30 days)
• Purchasing a Shelf Company (7 days)

Background:

Bermuda, a member of British Overseas Territory, locates in North Atlantic Ocean and is less than 1000km from the coast of North Carolina.

Bermuda follows the British-based legal system, its offshore insurance and reinsurance industry is the major economic sector.

Bermuda company is an exempted company specially designed for foreign investors, under which capital gains tax, value added tax, sales tax and gift tax are exempted.

Alike Cayman Islands companies, Bermuda companies are one of the traditionally allowed overseas jurisdictions to be listed in HKEx since British Hong Kong era.

Bermuda is also referred to in legal documents as the Bermudas or Somers Isles.

Why incorporate in Bermuda?

• Provide privacy protection, without disclosing shareholders and directors
• No direct tax shall be declarable and payable
• No double taxation treaties with other countries
• Company is granted listing in Hong Kong Stock Exchange

General Requirements:

• At least one shareholder who can be either legal person or individual regardless of nationality.
• At least two directors who must must be nature persons regardless of nationality.

Standard Registered Capital:

• USD 12,000

Required Information:

• English company name
• Copies of ID cards or passports of shareholders and directors

Method of incorporation (Lead time):

• Registration of company (40 days)

Background:

Belize, once a British colony and became independent in 1981, is now a parliamentary democracy suited in Central America.

Contributed by the dedication on ongoing development of offshore financial services, government of Belize is committed to offer regular consultations with the private sector to ensures that its policies and legislation continue to meet the needs and interests of the international financial community in an environment which engenders trust and confidence.

Belize offshore companies are well-known for a variety of tax planning and international investment purposes.

Why incorporate in Belize?

• Offshore income is exempted from all and any taxes and duties.
• The beneficial owner of company does not need to be registered in Belize.

General Requirements:

• At least one shareholder & director (natural or legal entity are acceptable, regardless of their nationality and citizenship)
• One local registered office & local registered agent

Standard Registered Capital:

• USD 50,000

Required Information:

• Traditional Chinese or English company name
• Copies of ID cards or passports of shareholders and directors

Method of incorporation (Lead time):

• Registration of company (3 days)
• Purchase of shelf company (5 days)