There are a lot of reasons clients will choose Hong Kong company as their offshore company.
a) Legal Tax Free – Hong Kong is using local tax system that offshore profits are legal tax free.
b) Sample Tax System – Hong Kong has: no VAT, no Capital item tax, no Bank interest tax, and no Divident income tax.
c) Well Known Global Financial Systems and Legal Systems – Hong Kong is global well known financial centre, and fair and reliable legal system. Nowdays, Hong Kong still follows UK legal systems, based upon the Basic Law of Hong Kong.
d) More choice of bank accounts over the world – Because of Hong Kong being a global well known financial centre, it makes easier to open bank accounts in Hong Kong as well as ouside Hong Kong.
e) Tax Information Exchange Agreement – Hong Kong is an international city, and has never signed up and Tax Information Exchange Agreement between countires.
f) Hong Kong Law allows enforceability of Trust Law – Through legal trust arrangement, the beneficiary identity can be totally hidden, and the beneficiary can by Trust Law of Hong Kong control the company and the company bank accounts instead of by Company Law of Hong Kong.
g) The production of Source of Income Proof – Basically, IBC(s) are not required to keep proper book of accounts, and they are not required to file the tax returns, not need to pay tax. However, bcasue of this, it becomes no income proofs. Government bodies, the Banks or Police Forces may exercise forfeiture of the income or assets of the Clients due to the less of proofs records. Hong Kong company will not be classified as IBC instead they are all required to file tax returns no matter they are offshore or onshore. The differences are that onshore profits are required to pay tax in Hong Kong; offshore profits are not required to pay tax in Hong Kong. Using Hong Kong company to do offshore business, clients will have a notice of NonTax Paid in Hong Kong from Hong Kong Tax Department. They have reliable strong proof of income records.
h) The expansion of markets in China. China is regarded as second large economy. Most clients will go to China for their busineses. Either through looking for suppliers in Chinese factory and export and sell outside China or throgh direct sells in Chinese markets. Due to the historical reasons that Hong Kong was conlony of UK before 1997 and now is part of China, but still use UK legal systems and by One Country Two Systems, and with the CEPA arrangements with China. CEPA is a close partner agreements that Hong Kong will have priority rights to enter China markets for business. So using Hong Kong company to enter Chinese Market will less the barriers in China.