An offshore company, otherwise known as non-resident company, is simply a company that does not carry out its business operations in its own country but in another country. Offshore company formation is considered a legal way to safeguard business assets. Since in most cases, offshore jurisdictions have corporate as well as banking secrecy laws, this allows companies to keep details regarding important clients, shareholders, and directors, confidential.
An offshore company also offers unlimited flow of capital as well as transfer of assets. Additionally, offshore company formation also provides such benefits as tax benefits, security, effective wealth management, personal security, enhanced profit, and tremendous savings via reduction of expenses in connection with payroll and travel expenses. In short, offshore company formation is a great way to conduct international businesses.
Offshore companies are of different types including Limited Liability Company, Limited Guarantee Company, Protected Shell Companies, International Business Company, Companies Issuing Shares, Trusts, and Partnerships. All of these are just few among the many of the different types of companies that can be set up abroad. However, the laws and regulations that govern these companies vary from country to country.
It would be even better if an offshore company is set up in jurisdictions such as Hong Kong and Singapore. Hong Kong is one of the most leading business, financial, and trading centers in the world. Regarded as the gateway to China, Hong Kong is a special administrative region of the country.
Due to its strategic location, world-class harbor, and factors such as sophisticated infrastructure, low tax rate, and attractive governmental policies, Hong Kong has now become a center for international trade. In deed, Hong Kong is regarded as an excellent jurisdiction for conducting onshore and offshore businesses. Al though Hong Kong is not considered a tax haven, it possesses a favorable tax regime, which in turn is effectively structured and managed.
According to a survey conducted by the World Bank, Hong Kong is the fourth easiest places to conduct businesses in the world. Likewise, as per the United Nations Conference on Trade and Development (UNCTAD,) Hong Kong is credited to be the second largest recipient of foreign direct investment in Asia.
In addition, setting up of a company in Hong Kong ensures safety, since it does not exchange any kind of information in relation to customer banking to other members of the Organization for Economic Cooperation and Development (OECD.) Hence, it is obvious that formation of offshore companies in Hong Kong would be effective as well as profitable.
Company formation renders a number of benefits. One of the key benefits is that it provides you access to well-structured as well as reputable trading jurisdiction. Another great benefit is that it is considered a legitimate means of housing exempted tax revenues sourced outside the destination. Above all, procedures in connection with the incorporation of a company are quite simple as well as liberal.
In practice, Hong Kong does not have any offshore legislation. In other words, all of the companies are set up under the same legislation, no matter they perform their businesses locally or offshore. One of the features that make companies akin to offshore businesses is the tax free status of such business set ups. For instance, if a company does not conduct any businesses in the place and as a result do not acquire any profit, then it is not taxable in the jurisdiction.
An offshore company can be incorporated via two prominent ways, and they are either by registering as a new brand company or according to the laws and regulations of the Companies' Ordinance. Both the methods have their own advantages.
A myriad of business consultancy firms are now in the scenario to provide superb services in connection with the incorporation of a company. In most cases, they offer personal service and professional advice to their clients, and undertake a continuum of activities in order to ensure successful Hong Kong company formation. Many of them even render services of expert lawyers, accountants and company administrators, in order to help in effectively carrying out the procedures in connection with the incorporation of offshore company.
Company formation is the legal process that deals with forming a company. In most international law and in UK law a company or corporation is separate to the people that operate or own the business. Companies can be set up by a wide range of different peoples or groups. They can be created by specialised agents on behalf of an individual or by the individual themselves.
They are also often arranged by accountants or solicitors but the majority of these companies are set up by specialised agents. In the UK the majority of the companies that are set up are done so on a package tend to cost between 100 pounds and 20 pounds. There are a number of requirements that need to be fulfilled to complete the registration process and a number of documents that need to be provided for the application to be completed.
Paper process
To form a company there must be a number of documents that are submitted alongside a fee that is submitted to the Registrar of Companies.
Memorandum of Association
The memorandum of association is the document that puts in writing some of the details of your company. It includes the company name, the registered office address of the company and the objects of the company that the people wish to create. These objects refer to the aims of the company and can be as basic as to wanting to continue trading as a general commercial company. This document must be signed by each of the subscribers that want to be recognised in the company and these signatures must be witnessed by someone that is not affiliated with the business.
Articles of Association
This is the document that deals with the rules and regulations by which the company will operate its internal affairs. This document must outline these rules and must be signed by a registrar and also must be signed by each subscriber and also as per the memorandum of association be signed by a witness.
Form 10
This form highlights the names and addresses of the key members of the company. This includes the details of the first directors the secretary and also the address that the company will reside. The information included in this form includes date of births, occupations and a list of other companies in which the members have been a director in the past five years. The form is also signed and dated by each of the subscribers.
Form 12
This document deals with the legal requirements of the company and states that the company will adhere to the legal requirements expected of it. This document is statutory and it must be signed by the solicitor that is helping to form the company or the one of the subscribers. It must be signed in front of a representative such as the justice of the peace, a solicitor or a notary public. This form usually carries an additional five pound fee.
Electronic Process
The electronic process of company formation is very similar to the paper format - the main difference being that it can be submitted electronically. It can mean that your company is set up in as little as 5 minutes. The main difference is that this process does not require filling out the form 12 which makes the process much quicker than conventional arrangements.
Both Wolfgang Jaegel & Ben Needles are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.