The Pros and Cons of Starting an Offshore Business in Hong Kong

Responsibilities to obey the rules and laws

There are a lot of tax breaks in Hong Kong, but running an offshore company means following a lot of rules:

• First filing is due in 18 months: The IRD sends a company its first Profits Tax Return about 18 months after it is set up. The business must now send in its first audited financial statements with its return.
• Then, every year, there are audits: Businesses have to send in audited financial statements and a Profits Tax Return every year after they file for the first time.
• Papers that back up: If authorities want to prove that profits come from outside the country, they may ask for letters, contracts, and bank statements.
• Getting ready on time: The first filing isn't due for 18 months after the company is formed, but it can take months to get the audits ready and get the bank confirmations. Businesses should get started as soon as possible.
  

Hong Kong is different from other offshore places because it has stricter rules. The trade-off is that banks, partners, and regulators around the world trust companies based in Hong Kong much more.

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The steps to start a Limited Company in Hong Kong

To start a limited company in Hong Kong, you need to do these things:

1. Document Submission: You need to send in copies of the directors' and shareholders' passports, proof of address from the last few months, and the name of the business you want to start.
2. Registered address and company secretary: You need to find a local registered address and hire a corporate secretary who is licensed. Hong Kong law says that both are needed.
3. Approval for incorporation—after the application is sent in, it usually takes two to five business days to finish.
4. Paperwork for businesses: The company gets the Articles of Association, the Certificate of Incorporation, and the Business Registration Certificate after the application is approved.
   

Business registration fees (HKD 2,150 a year or HKD 5,650 for three years) and audit fees, which depend on how much money the company makes, are costs that happen all the time. It can be hard to do banking because most banks need original documents and proof of identity in person. This means that it takes longer to open an account than it does in other places.

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