Hong Kong is a fast-growing global financial centre attracting thousands of international entrepreneurs to establish their headquarters here. Providing high responsibility demanded by an independent business, this business’s requirements set the stage for intense personal interaction between the establishment and its partners. With the increasing exchange of information across borders, it has become easier to access foreign firms’ services and goods through offshore business centres. It has also made it easier to access the benefits of offshore company formation in Hong Kong. Offshore company formation in start up business Hong Kong offers the established entrepreneur an offshore haven with low taxation and no capital gains tax or stamp duty attached to it. Here are some of the benefits of an offshore company in Hong Kong to be considered:
There is no need to pay income tax on the company owner’s assets placed in startup business in Hong Kong. Providing high responsibility requires stringent protection and strict accountability because the opportunity exists that foreign entrepreneurs may abuse their position after they establish offshore company formation here, selecting personal gain and convenience over the need for the government’s welfare. However, an offshore company is not subjected to the same constraints as its local counterpart. Therefore, there is a need to protect the taxpayer’s assets if tax evasion is a serious issue.
A company formation process in Hong Kong is comparatively simple and relatively easy to be completed within a few hours, compared to the ten days it takes when filing taxes at home. It is a benefit as it means that small market players can expand their market base in Hong Kong without spending a considerable amount of time and money on getting established here. On the other hand, they can hire a professional offshore company formation service provider in Hong Kong to take care of the complicated issues of incorporating.
Many offshore company formation services offer different packages and schemes to local businesses to attract new and innovative entrepreneurs. They can tailor their offerings to meet each new business start-up’s needs and ensure that it can reach its business goals. One of these features is a simplified process of incorporating. The paperwork and administrative requirements are less than required in the UK, US, or Australia. It is an attractive offer for new business marketers who do not have any experience dealing with local laws and regulations.
Another reason why local marketer think they are being abused is that they are not aware that the UK government has implemented a tax break scheme for start-ups to reduce their taxes by 30% on the amount they pay as profits. This incentive program has been implemented to encourage local businesses to locate in Hong Kong. Local businesses need to promote themselves to consumers in other countries to increase their market share and eventually achieve success. However, many new business marketers feel that they are not being given an effective platform to compete with big names in their respective industries. Since the government has offered them such a huge financial benefit, why shouldn’t they take full advantage and become the next Mr Success in Hong Kong?
Many offshore company registration service providers are abusing the system. They fail to register all the companies properly and thus do not benefit from the UK government’s incentives. Some of these marketers register only a few legitimate companies’ names, while some go to the extent of reporting hundreds of companies in just a short time. Since the amount they charge is also relatively high, it makes little sense to choose this option.
The best way to prevent the abuse of the corporate assets by business Hong Kong institute directors is to enforce the provision of Memorandum and Articles of Association strictly. The following are the requirements that must be met by the director of a registered business: commitment to comply with the provisions of the Articles of Association; compliance with the code of discipline laid down by the Hong Kong SEDES and the Companies Act; and, finally, the maintenance of a profit account. The directors should ensure that the version is regularly and comprehensively audited for any apparent discrepancy. The audit should be conducted by a certified public accounting firm regularly, and the firms should ensure that they have appointed an accountant to check the account regularly. CPA firms are highly recommended by Hong Kong SEDES and the Companies Act for all companies wishing to register in Hong Kong.