Company Formation

Using Hong Kong Limited Corporate Structures in International Tax Planning holding Companies Introduction Choosing the location of holding company or regional holding company can be a daunting decision for many international structures. The minimization of tax, cost and risk are the main concerns. Hong Kong Limited with the robust economy of China, coupled with the accession of China and Taiwan into WTO, much interest has been seen in investing in the Greater China or even the Asia Markets.

Some Hong Kong Limited investors may prefer to set up appropriate holding structures within Asia. Criteria for Choosing a Suitable Jurisdiction for Holding Companies Low Cost and Risk Considering cost and risk, a favorable jurisdiction for setting up holding companies should have the following characteristics: There is no minimum capital requirements. Except in case of public companies, there is no requirement to file accounts with the company house, thus avoiding financial information being available to the public

Ease of setting up, relocation and dissolution when the company is no longer needed; when forming Hong Kong Limited to possess some forms of investor protection agreements with major trading nations. Favorable Tax Rates Considering tax, there should be. No tax on the income earned by its foreign subsidiaries, or the income of the holding company is exempted from any form of taxes.

Furthermore, withholding tax on distribution and non-resident shareholders can receive dividends without tax No or low Capital Gains tax on disposal of interest in the subsidiaries. Possess a wide network of Double Taxation Treaties to reduce the tax on dividends, interest and royalty received from treaty countries. Hong Kong Limited Other Factors Other factors include: Stable government and definite government policies. Free flow of capital and a stable currency. Image of an international financial centre. Ease of listing and raising of capital. Not all jurisdictions provide all of the above features. Those which come close to the list are, in Europe: United Kingdom, Portugal, Netherlands, Demarks, Luxembourg, Belgium, Cyprus; in Asia: Singapore and most notably Hong Kong Limited.