Copyright © 2013 - 2020. International-Formations.com is a trading name of Tai Pan Management Services Ltd.
Company Service Provider Licence No. TC004077 Registered in Hong Kong. No 1942748
All rights reserved.
Please note that Tai Pan provides an execution only service in respect of the formation of companies, opening bank accounts and related services.
Therefore comments or suggestions made by us should not be considered as formal advice.
Should you require formal structuring advice, please visit our sister company TaiPan.
Clients wishing to trade internationally and looking for a ‘respectable’ jurisdiction with relatively low tax rates, we recommend Hong Kong, Singapore or the U.K. which can be used throughout the world.
Hong Kong is located in the South China Sea 100 miles (160km) south east of Canton. It’s name, from the Cantonese, means fragrant harbour.
A British colony between 1842 and 1997, Hong Kong became a Special Administrative region (HKSAR) of P.R. China on 1st July 1997 and is administratively it is entirely separate from the Chinese tax and company system.
Hong Kong is not an offshore jurisdiction as such, but has low tax rates which are levied only on Hong Kong-source income.
Territorial taxation. Income from outside Hong Kong is generally NOT taxable.
Corporation tax is 16.5 % for Hong Kong source income, but 0% for non-Hong Kong source income.
Under the guiding principle of "one country, two systems" which was established before the handover the Chinese Government agreed that Hong Kong's capitalist system would remain unchanged until the year 2047. Within this, the legal system remains English Common Law.
Hong Kong profits tax is only charged territorially on Hong Kong source income at a rate of 16.5%. There is no capital gains tax, no withholding tax, no sales taxes, no VAT, no annual net worth taxes and no accumulated earnings taxes on companies that retain earnings rather than distribute them.
The standard authorised capital of a Hong Kong company is HK $10.000 (c. US $1,275) although a larger authorised capital may be specified. The minimum issued capital can be one share of HK $1.
A Hong Kong company may have a sole director who need not be resident in Hong Kong. Corporate directors are no longer be allowed. A Hong Kong company may have one shareholder, which, if desired, may be corporate. The use of nominees can protect privacy although this complicate the opening of bank accounts.
Every Hong Kong company must have a local resident secretary, a registered office in Hong Kong and a Business Registration Certificate. A business registration fee (c. US$250) is payable within one month of the date of incorporation and then annually on the anniversary of incorporation.
Every Hong Kong company must produce annual audited accounts and appoint a Hong Kong registered auditor except: -
Dormant i.e. Non Trading Companies.
Small companies (Companies whose annual turnover does not exceed HK $500,000 c. US$60-65,000.
Companies which have obtained exemption from the HK inland revenue. Please contact us for more information.
Tax Returns are made up annually to 31st March unless the company has chosen a different accounting date. For newly registered companies, a longer period (a maximum of 18 months) applies before the first tax return need be submitted.
Singapore, in South-east Asia, was founded as a British trading colony in 1819. It became independent in 1965.
Singapore’s per capita GDP is equal to that of the leading nations of Western Europe. English is one of four official languages in Singapore but it is the language primarily used in commerce.
Singapore is a common law jurisdiction.
Formation of a Singapore company is very fast. We recommend allowing 2 working days for the confirmation of incorporation with the certificate being issued a few days later.
Singapore company law requires a local director and local company secretary. Our incorporation service provides for this.
A Singapore company may have one or more shareholders - corporate or natural persons. However, companies with a corporate shareholder automatically require an audit.
The minimum issued capital for a Singapore company can be one share of S$ 1.
The annual return, submitted to the Registrar of Companies, contains details of the shareholders and directors of the company and is available for public inspection.
The full rate of tax chargeable on company profits is 17%. There however various exemptions and part exemptions which reduce this rate.
For example, in the first three accounting years, the first S$ 100,000 (around US$ 75,000) of profit is not assessable for tax.
Income generated outside Singapore and not remitted to Singapore can be free of Singapore corporation tax (subject to certain provisos).
Singapore has a number of double tax treaties in force with major trading partners and therefore Singapore companies can be used as part of a tax efficient international structure.
All Singapore companies are required to submit accounts annually to the Singapore Inland Revenue and to the company registry. We assist our clients with the preparation and filing of accounts.
Companies with corporate shareholders and/or with substantial turnover over S$5 million (c. US $3.8 million) require an audit.
Opening a bank account in Singapore is very straightforward provided that a director/signatory can visit the bank.
We can offer four Singapore banks - OCBC, DBS, Maybank, and UOB. All of these offer the full range of banking services including Internet banking, debit cards and accounts in a variety of currencies.
For those requiring FX and other trading platforms, we can offer Saxo Bank a Capital Market Services provider.
Alternatively, Singapore companies may fairly easily open accounts in other jurisdictions including Mauritius (ABC Banking and Afrasia Bank), Bank of Cyprus, and CIM Banque in Switzerland.
Cyprus is an independent country in the Eastern Mediterranean south of Turkey with a population of some 875,000.
It is a full member of the EU and is also part of the Euro zone. The Governing law is the Cyprus Companies Law, Cap. 113 and is closely based on the 1948 UK Companies Act.
Cyprus is a common law jurisdiction.
Where a Cyprus company ensures that its management & control is outside Cyprus, it is deemed to be non-resident. By being designated as non-resident, no Cyprus corporate taxes are payable. It is important to note that the company may not do any business within Cyprus (other than the purchase of professional services), and should not trade within the E.U. VAT registration is not be possible for non-resident Cyprus companies. Although no corporate taxes are payable, an audit must still be carried out and accounts filed with the Inland Revenue in Cyprus.
It is important for a non-resident company to have a trading address (including a telephone number) outside Cyprus, and the E.U.
Corporate directors are not permitted in Cyprus, however corporate shareholders are allowed. Ideally, the director should ‘be based’ in the same country as the trading address. Please contact us for more information.
Cyprus maintains a public registry from which details concerning the company's officers and shareholders may be obtained by means of a personal search (online searches are also possible, but limited).
Accounts (locally referred to as Financial Statements) do need to be prepared, audited and filed with the Inland Revenue in Cyprus. We offer all the necessary services e.g. bookkeeping, VAT registration (where applicable) and maintenance, accounting etc. and can arrange for audit with a local firm of Chartered Accountants.
Cyprus has a public register of officers & shareholders. (Please see directors & shareholders)
Shelf companies are theoretically possible, but as they would automatically be established with a local director, we do not recommend this course of action whether the company is intended to be non-resident.
Dividends may be distributed to shareholders outside Cyprus without further taxation. In general terms, salaries (and related consultancy fees) may be paid to a non-resident of Cyprus free of all taxes and social insurance charges.
Non-resident companies are not liable to Cyprus taxation.
Hong Kong profit tax have been reduced with effect from the year of assessment 1 April 2018 to 31 March 2019.
The changes are as follows:
In both cases profits tax applies only to profits generated in Hong Kong.
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