You are here

The Advantages in comparison with Off-Shore Companies

Despite of the options of taxation similar to those with off-shore jurisdictions, Hong Kong is not an off-shore in the classic meaning of this term.

Tax exemption is not automatic in Hong Kong. All Hong Kong companies, irrespectively of  whether conducting business on or off the territory of Hong Kong, are obliged to conduct accounting and reporting according to the GAAP fiscal code requirements, to perform auditor’s inspections and to present the fiscal reports to the Inland Revenue Department each year. Thus, for the company registered in Hong Kong and legally conducting business it is much easier to present the evidences of legality of the origin of its capital in process of investments in the developed states (due to the presence of the official documents evidencing legality and purity of the source of the income). This is an important advantage to compare with the off-shore companies. The income received by Hong Kong companies is subject to taxation with the tax on profit at the rate of 16,5%. Only the income received from the activities held on the territory of Hong Kong are subject to taxation (the so-called “principle taxation by the territory”)  so the income received by Hong Kong companies from the activities conducted by them out of the territory of Hong Kong is subject of the tax exemption.

Transparency is the other difference between  Hong Kong companies and the classic  off-shore companies. Information about shareholders and directors of  Hong Kong companies is public.

All this makes Hong Kong companies valuable corporate instruments recognized all over the world.