Frequently Asked Questions

Registration, Account Opening, Taxation, Annual Audit

Overseas Company Registration

Of course you can! We will show you all the necessary paperwork and documents to apply for registration. It doesn’t matter where you are settled, it doesn’t matter what country you are from. There are no real identity or nationality restrictions for overseas companies (e.g., Hong Kong, UK, US, BVI, etc.).

No need! You can easily sit in your office and have everything done for you, in other words you don’t need to leave your office desk to register your overseas company.

It is not necessary. Since there are many overseas limited companies (e.g., U.S. companies, U.K. companies, Hong Kong companies, BVI companies, etc.), the registered capital is attributed to the assets in name and is not subject to timely capital verification. The registered capital only means the amount of shares that can be issued by the enterprise. The riskiness of the offering is measured according to the total share capital of the offering, and the number of shares offered is the amount of riskiness to be borne. (For example: your registered capital is one million, you only offer 100 million Hong Kong dollars, each share is one dollar, then you need to bear the risk is 10,000 yuan).

Naturally, if you are trading under the name of a registered limited liability company, then all obligations and risks are borne by the limited liability company and have nothing to do with you, as the assets and property of the limited liability company are completely separate.

The only requirement is that you must be 18 years of age.

In fact, the time to apply for registration of overseas companies is fast, but the time varies from region to region, generally speaking, it takes 15 to 20 working days.

Through reasonable tax planning, the tax burden of entrepreneurial enterprises can be effectively reduced. However, registering an overseas company does not mean that you can evade tax. The tax rate in the place of incorporation of an offshore company is usually lower, and only the profits earned by the overseas company in its place of incorporation are taxed, and very little Value Added Tax If an offshore company does not make a profit in the current year, it is exempt from tax; if it makes a loss, it can even deduct the tax payable in the following year.

Usually, overseas companies are not allowed to start business activities directly in the Mainland. In order to start commercial activities in the Mainland, it is necessary to register the corresponding branch or office with the Mainland Ministry of Commerce and Industry. However, if the Mainland counterparty also owns an overseas company, it is recommended to conduct commercial activities under the names of both overseas companies.

As long as you need to transfer funds from overseas or sell products overseas, you need to apply for an offshore company. This is especially necessary for companies doing offshore business such as foreign trade and cross-border e-commerce. In addition, industries such as real estate, shipping, aircraft, insurance, personal, management services, etc. are also recommended to register as offshore companies to avoid capital gains tax and estate tax, significantly reduce taxes and crew and compliance costs, and save a lot of money.

Offshore companies can hold investment and accumulation funds tax-free. Banks in offshore centers generally pay interest in total value and manage accounts in the primary currency, and all offshore financial centers (including China) Hong Kong All offshore financial centers (including Hong Kong, China) do not tax capital gains. High-tax countries such as Australia, Japan and the United Kingdom also do not impose capital gains taxes on non-residents, so investments held by offshore companies are tax-free, but dividends remitted to offshore companies from these countries are subject to withholding taxes. In the case of high dividend income, the cost of income tax withholding can often be mitigated by taking advantage of tax incentives between jurisdictions.

Overseas Corporate Tax

The tax system in Hong Kong is relatively simple. In general, Hong Kong companies are required to pay the following taxes:

Profits Tax: All profit-making companies in Hong Kong are subject to profits tax at a rate of 16.5% on their income. Unless the company derives all of its income from sources outside of Hong Kong, the company must file a profits tax return.

Business tax: There is no business tax in Hong Kong, but some industries such as hotels and bars require a special permit fee.

Stamp duty: Hong Kong companies are required to pay stamp duty on share transfers and property transactions at a rate that depends on the amount of the transaction.

Property Tax: Hong Kong companies are required to pay property tax, which is calculated based on the annual rental value of the company’s property at a rate of 5%.

Social insurance: Hong Kong companies are required to pay social insurance for their employees, including the Mandatory Provident Fund, Employers’ Compensation Insurance and Employers’ Liability Insurance.

The Hong Kong Government offers a number of tax incentives to encourage business development and investment, some of the major ones are listed below:

Income tax exemption for innovative and technology-based enterprises: eligible innovative and technology-based enterprises are eligible for a 50% income tax exemption up to 8.25%.

  • Investment tax credit: Hong Kong resident companies are allowed to offset their overseas income tax against Hong Kong profits tax up to the total amount of overseas income tax.

Pre-tax deduction of expenses for activities: Expenses incurred during the period when the enterprise is engaged in activities to promote its business can be deducted before tax, such as participation in international trade shows, advertising and promotion expenses, etc.

  • Personal Pension Plan: Hong Kong companies can offer their employees a personal pension plan where contributions are exempt from the company’s contribution to the Mandatory Provident Fund.

U.S. corporations are subject to the following types of taxes:

  • Federal Income Tax: The federal income tax rate varies between 21% and 35% and is levied on corporate income based on the company’s income, expenses and profits.

State Income Tax: Most states also impose an income tax on corporate income. State income tax rates vary from state to state and usually range from 4% to 10%.

Employer portion of social insurance tax: Companies must pay social insurance tax to their employees, which includes social security tax and health insurance tax. The company must pay the employer portion of the social insurance tax equal to the social insurance tax of its employees.

  • Employer portion of the federal unemployment tax: Companies must pay an unemployment tax to the federal government to fund unemployment insurance programs. Companies must pay an employer portion of the federal unemployment tax equal to a percentage of their employees’ wages.

In addition, companies may be subject to other taxes, such as property taxes, sales taxes, and business taxes, which vary from state to state.

U.S. corporations are eligible for several tax benefits:

  • Depreciation and amortization: The cost of an asset that a company can deduct gradually over a certain period of time is called depreciation. Amortization is when a company can deduct the cost of an asset each year over the limited life of the asset. These deductions will reduce the company’s tax liability.
  • Research and Experimentation Expense Credit: Companies can treat research and development costs as pre-tax expenses and credit them against income taxes.
  • Charitable contributions: Companies may treat charitable contributions as pre-tax expenses and receive a credit for income tax reporting purposes.

Profit shifting: Companies can reduce their tax liability through profit shifting and tax avoidance schemes. However, such actions must comply with the law, otherwise they may lead to investigation and penalties by the tax authorities.

It is important to note that the conditions and extent of tax benefits apply depending on the state, industry and specific circumstances of the company, and companies should seek to maximize the tax benefits while complying with the relevant regulations.

Companies in Singapore are required to pay the following types of taxes:

Corporate Income Tax: Corporate Income Tax is one of the major taxes in Singapore. Companies incorporated in Singapore are required to pay corporate income tax to the Singapore government at a rate of 17%.

Value Added Tax (VAT): VAT is a consumption tax that applies to the sale and import of goods and services. In Singapore, VAT is known as a consumption tax and the rate is 7%.

Employee Payroll Tax: Employee Payroll Tax is a tax on employees’ salaries, including wages, bonuses, stock options, etc. In Singapore, the rate of employee payroll tax is based on the individual’s income tax bracket, with a maximum rate of 22%.

Trade taxes: If the company is involved in international trade, it is also required to pay trade taxes such as import duties and export duties.

It is worth noting that Singapore has a series of incentives for start-ups and small businesses, such as first year tax exemption and low tax rates. Therefore, when choosing Singapore as a location for investment or development, companies should carefully understand the relevant tax policies and incentives.

Singapore has many tax incentives for small businesses and start-ups, including the following:

  • First Year Tax Exemption: Newly established companies can receive a full or partial tax exemption for the first three fiscal years, depending on the amount of corporate income tax payable.

SME tax incentives: SMEs in Singapore enjoy a lower rate of income tax. Depending on the actual income of the business, the tax rate can range from 0% to 17%. In addition, SMEs can also enjoy capital expenditure credits and tax incentives for R&D expenditure.

Tax incentives for technological innovation: The Singapore government offers a range of tax incentives for companies engaged in R&D and technological innovation, such as tax incentives for R&D expenditure and tax incentives for intellectual property rights.

  • Double Taxation Agreements: Singapore has signed many double taxation agreements with other countries through which companies can avoid double taxation between the two countries.

Employer-paid benefits: Employer-paid benefits, such as health insurance, life insurance, pension, etc., are tax deductible in Singapore.

It is important to note that the specific details and eligibility requirements of these tax incentives may vary and companies should understand the relevant policies and regulations in detail before deciding to invest or set up a company in Singapore.

Overseas company annual audit

The annual audit of a Hong Kong company is due on each anniversary of the company’s incorporation. For example, if the company is established on November 11, 2020, the annual audit due date will be November 10, 2021.

Annual Review:

  • File an annual return with the following contents: information on directors, shareholder structure, and update of secretary appointment.
  • Replace the Business Registration Certificate. The Business Registration Certificate of a Hong Kong company is valid for one year, and the government will reissue a new Business Registration Certificate BR every year after the annual audit.

Late Consequences:

If the annual audit is late, fines will be incurred on both the annual return and the business registration.

Business Registration Certificate BR is generally overdue for more than 30 days and the annual fine is HK$300.

No penalty will be incurred if the annual return is overdue for 42 days or less, and the penalty for over 42 days is calculated as follows:

  • Overstay within 42 days to 3 months, a fine of HK$870;
  • Overstay within 3 months to 6 months, a fine of HK$1740;
  • Overstay within 6 months to 9 months, a fine of HK$2,610;

The fine is HK$3,480 for overstaying the period of 9 to 12 months.

For BVI companies incorporated in the first half of the year (January-June), the annual audit is due on May 30 of each year. For example, for a company established on May 11, 2020, the annual audit will close on May 30, 2021.

For BVI companies incorporated in the second half of the year (July-December), the annual audit is due on October 30 of each year. For example, for a company incorporated on November 11, 2020, the annual audit will close on October 30, 2021.

Late Consequences:

The company will be fined 10% of the annual audit fee if the annual audit is late for 1-2 months;

If the annual audit is 3-4 months late, a penalty of 50% of the annual audit fee will be added;

If the annual audit is 5 months overdue, the business license will be revoked and the company will be cancelled.

All BVI offshore companies must follow the established annual audit requirements to avoid fines and prevent company cancellation.

The annual audit of a UK company is due every anniversary of its incorporation, e.g. for a company incorporated on November 11, 2020, the annual audit is due by November 10, 2021.

Late Consequences:

After the registration of a UK company, it is necessary to ensure the legality of the UK company, so it is necessary to do the annual inspection. If the customer cannot do the annual inspection for some reasons, he/she just needs to report to the UK company law to pay a certain annual inspection penalty, the following is for reference:

  • A fine of £150 for an annual inspection that is 1 day to 1 month late;
  • Annual inspection 1 month to 3 months late, £375 fine;
  • Annual inspection 3 months to 6 months late, £750 fine;

The annual inspection is overdue for more than 6 months and the fine is £1,500.

After incorporation, a Caymanian company must file an annual return with the Registrar of Companies in January of each year and pay a specified amount of filing fee (or annual license fee)

Late Consequences:

No fines will be incurred for annual audits on or before March 31;

  • 33.33% annual fee on or after April 1 but on or before June 30;
  • 66.67% of annual fees on or after July 1 but on or before September 30;

100% of the annual fee on or after October 1, but on or before December 31.

If an annual return is not filed or a filing fee is not paid, the company cannot apply for and receive a CERTIFICATE OF GOOD STANDING.

If a company is late in filing a return or paying a filing fee for more than one year, the company will be delisted and the assets of the company will revert to the Cayman Islands Government.

For example, if a company is established on November 11, 2020, the annual audit will be due by November 10, 2021.

Penalty for exceeding the normal annual inspection time:

  • 10% of the annual license permit fee if paid within 90 days of the anniversary of the date of incorporation;
  • 50% of the annual license fee if the annual license fee is paid 90 days after the company is registered;

If the company is removed from the register on December 31 of that year, the 50% surcharge rule is applied.

Singapore companies are required to undergo an annual audit once every natural year after incorporation. The latest annual audit is 15 months after the company’s last annual audit, and the company’s financial report must be completed within 6 months before the annual audit, otherwise a fine will be incurred.

Every Singapore company, whether dormant or active, is required to undergo an annual audit.