4 factors to help businesses choose Hong Kong or an Offshore country to establish a foreign company
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Updated on January 21 
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- 1. Overview of company formation in Hong Kong and offshore company formation
- 2. Comparing Hong Kong and Offshore corporate tax rates - which country has the optimal tax rate?
- 3. Comparing the incorporation process - Hong Kong or Offshore is the optimal country?
- 4. Does opening a bank account affect the choice of country of establishment?
- 5. How does GLA support businesses in establishing companies in Hong Kong, or opening offshore companies?
- 6. What are the frequently asked questions when businesses choose to open a company in Hong Kong or establish an offshore company?
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Establishing a foreign company is always a great investment choice for many businesses. Currently, the number one choice of many businesses is Established company in Hong Kong or open an offshore company in countries like BVI, Belize, Seychelles.
However, many businesses will encounter initial difficulties such as how to choose the most suitable country for the purpose of opening a company. This is a very important decision because it will affect the direction and development of the business of the business.
Therefore, let's find out with GLA in this article comparing establishing a company in Hong Kong and establishing an offshore company and see which option is most suitable for the business.
1. Overview of company formation in Hong Kong and offshore company formation
1.1 Overview and benefits of opening a company in Hong Kong
Hong Kong is one of the world's leading developed countries in Asia, reflected in many international rankings in many high rankings such as in “Legal Prosperity Index 2023” ranking Hong Kong ranked 1st in the world for business environment in 2023, 2nd in the world for business conditions.
Not only famous as an international financial center, Hong Kong is favored by investors worldwide thanks to benefits such as:
- Strategic business location.
- Business environment with many incentives and support from the government.
- Attractive tax incentives.
- Developed infrastructure and highly skilled workforce.
- Company establishment procedures are simple and quick.
- Stable currency and no exchange controls.
Hong Kong is truly an ideal place for foreign investors to choose to open a company to do business globally. In addition, Hong Kong also offers unlimited business opportunities, a gateway and a place for international trade with China. Tens of thousands of international businesses benefit from setting up a company in Hong Kong.
1.2 Overview of benefits of establishing an offshore company
Offshore company, also known as International Business Company (IBC), is a very famous type of company and is loved by many businesses. Businesses often choose to establish offshore companies in famous offshore countries such as BVI, Belize, Seychelles, UAE, etc. because of many benefits that businesses cannot ignore such as:
- Attractive tax incentives;
- Friendly legal system, protecting investors and companies, assets;
- High information security;
- Company establishment procedures are simple and quick;
- Low, minimal company formation and maintenance fees.
In addition, depending on the country chosen, countries that allow opening offshore companies also bring many benefits and other preferential policies to businesses such as no exchange control, allowing real estate purchases, or doing business in the country of establishment, etc.
Therefore, choosing to establish an offshore company is certainly an indispensable choice when businesses want to expand their business operations to the world while still optimizing operating and management costs.
2. Comparing Hong Kong and Offshore corporate tax rates - which country has the optimal tax rate?
| Element | Offshore (BVI, Belize, Seychelles, etc.) | Hong Kong |
| Corporate income tax | 0% corporate income tax. This is an important benefit that many businesses choose when opening a company. | The tax system in Hong Kong is quite special and clearly classified. In general, corporate tax in Hong Kong will be classified as follows:
|
| VAT/GST | 0% VAT | 0% VAT |
| FCT | 0% contractor tax | 0% contractor tax |
Businesses interested in many other types of taxes or want to compare tax policies between Hong Kong, Offshore and many other countries such as Singapore, USA, Australia, Canada, etc. Use the GLA All-in-One Tax Comparison tool, access: Complete tool to explore tax policy of every country.
3. Comparing the incorporation process - Hong Kong or Offshore is the optimal country?
| Factor | Offshore (BVI, Belize, Seychelles, etc.) | Hong Kong |
| Types of companies that can be established | Offshore company is also known as International Business Company (IBC). The company is allowed to do international business and all business activities take place outside the country of establishment. Among the countries that allow opening offshore companies, Individuals/Businesses often choose the following countries:
Contact GLA today for detailed advice. | Individuals/Businesses have many choices of company types when registering a company in Hong Kong, each type has its own advantages and disadvantages. Among them, the 4 most prominent types in Hong Kong include:
Among the above types, the limited liability company is the number one choice of many businesses because the benefits for foreigners are huge. Specifically, the type of limited liability company (Company Limited) stipulates that the responsibilities of foreign investors and the company are clearly separated, protecting the interests of business owners. |
| Time of company establishment | About 2-3 weeks and may take longer, depending on country selected, service requested, administrative service from government, etc. | Approximately 2-3 weeks and may take longer, depending on the type of option, service requested, administrative services from the government, etc. |
| Incorporation process |
|
|
| Corporate Tax Rate | 0% corporate income tax, contractor tax, value added tax when establishing an offshore company. This is an important benefit that many businesses choose when opening a company. | The tax system in Hong Kong is quite special and clearly classified. In general, corporate tax in Hong Kong will be classified as follows:
In particular: Hong Kong does not impose VAT, capital gains tax, or dividend tax on companies owned by foreign individuals/enterprises. |
| Regulations on financial reporting, tax, accounting, auditing | Depends on Offshore country
| Hong Kong companies are required to have annual audits. |
4. Does opening a bank account affect the choice of country of establishment?
| Factor | Offshore (BVI, Belize, Seychelles, etc.) | Hong Kong |
| Account Types |
GLA advises businesses to open a bank account for an offshore company at a Singapore bank because of more benefits than opening in an offshore country. Businesses can learn more in the following article: Open an offshore bank account in Singapore. |
Opening a traditional bank account in Hong Kong is quite complicated, depending on the policy of each bank, you may be required to be present in Hong Kong for an interview. For that reason, GLA advises the company Open a corporate bank account in Hong Kong with physical bank/digital bank in Singapore or digital bank in Hong Kong because of many advantages. |
| Processing time | Traditional bank account: 3-5 months, complicated and lengthy documents Digital bank account: 3-5 days. | Traditional bank account: 3-5 months, complicated and lengthy documents Digital bank account: 3-5 days. |
| Ability to open successfully | 99% of traditional or digital bank account openings are successful. Make sure to have at least 1 business bank account | 99% of traditional or digital bank account openings are successful. Make sure to have at least 1 business bank account |
Companies that want to research a list of banks in Singapore, Hong Kong or other countries, access the tool GLA's Comprehensive Bank Comparison to choose the right bank now.
Businesses are worried about the success rate of opening a bank account, check now with the GLA bank account opening appraisal tool and receive advice from GLA financial experts: click here.
5. How does GLA support businesses in establishing companies in Hong Kong, or opening offshore companies?
Depending on the goals and orientations, businesses will have many interpretations and the most suitable options when choosing to establish a company in the US or open an offshore company in countries such as BVI, Belize, Seychelles, etc. This choice will certainly take a lot of time for the Enterprise from making a detailed plan, comparing establishing a company in Hong Kong and an offshore company to calculating costs and accounting for the future.
Therefore, an ideal choice that a business can make is to look for a reliable service provider that can answer all questions, business problems and support the company on this path.
Therefore, GLA with its extensive experience and reputable, reliable service quality, consults set up company in usa, Canada, Hong Kong, Singapore, offshore, will support Enterprises:
- Consulting and supporting businesses to establish companies in Hong Kong.
- Consulting on establishing offshore companies in BVI, Belize, Seychelles, etc. suitable for Enterprise business models.
- Support local agent service (Registered agent).
- Support businesses to register business locations in offshore countries, Hong Kong.
- Support businesses to register, open and authenticate Paypal international payment account, Stripe etc;
- Support Business registration, open, authenticate physical bank account, online banking in financial centers Singapore, Hong Kong;
- Support businesses in fulfilling accounting tax obligations, offshore financial reporting services, Hong Kong.
6. What are the frequently asked questions when businesses choose to open a company in Hong Kong or establish an offshore company?
What are the benefits of setting up a company in Hong Kong?
The benefits of setting up a company in Hong Kong are numerous, the most prominent advantages include:
- 0% tax on income generated outside Hong Kong.
- Strategic business location;
- Business environment with many incentives and support from the government;
- Attractive tax incentives;
- Developed infrastructure and highly skilled workforce;
- Company establishment procedures are simple and quick;
- Stable currency and no exchange controls.
For more details, businesses can read the article: Benefits of establishing a company in Hong Kong.
Which offshore country is the best choice for Businesses to set up an offshore company?
The choice depends on key factors such as the reputation of the chosen country, business structure, cost of establishment and management, ease of incorporation, etc.
GLA finds that countries such as BVI, Belize, Seychelles are the most ideal countries to open an offshore company. Among them, BVI is the most famous country chosen by many businesses.
What are the benefits of opening an offshore company?
Establishing an offshore company brings many benefits to businesses, including:
- Attractive tax incentives.
- There are no regulations on preparing annual financial and tax reports.
- Friendly legal system, protecting investors and companies, assets.
- High information security.
- Company establishment procedures are simple and quick.
- Low, minimal company formation and maintenance fees.
How much does it cost to set up an offshore company or set up a company in Hong Kong?
Depending on the type of business and the service package for opening an offshore company or opening a company in Hong Kong, GLA will quote detailed fees (100% no hidden fees) for each service to the Business.
Contact GLA for detailed advice on establishing offshore companies and US companies and the total fee for company establishment services today.
What are the similarities between the requirements for setting up an offshore company and a company in Hong Kong?
It can be said that the requirements for opening an offshore company or a company in Hong Kong are similar as both require a minimum of 2 director, 1 shareholder (Director, shareholder can be of any nationality and can be assumed by the company), local agent and address in the selected countries, etc.
However, each selected country will have additional specific requirements that Businesses must comply with.
Contact GLA for detailed advice on establishing offshore companies and Hong Kong companies today.
Highlights- The following 4 criteria help businesses choose to establish a company in Hong Kong or an Offshore country correctly:
- Overview of the benefits of setting up a company between Hong Kong and Offshore countries.
- Hong Kong and Offshore Country Corporate Tax Rates.
- Procedures for establishing a company in Hong Kong and Offshore countries.
- Ability to successfully open a bank account when establishing a Hong Kong company and Offshore country.
- Tax comparison tool between Hong Kong, Offshore countries and optionally other countries such as: Singapore, Hong Kong, USA, etc. to determine the most suitable tax-optimized country. Visit now: The All-In-One Tax Comparison Tool.
- Bank comparison tool, country and bank options, bank account opening success rate review. Visit now: Comprehensive bank comparison tool.
This article was published by GLA on 01/07/2021. Copyright and accompanying content are intellectual property of GLA. All rights reserved.
The guidance and content are for general information only and are not intended to provide specific guidance and advice on accounting, tax, legal or other professional advice. Readers should consult professional advisors on specific issues.
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