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Offshore Financial Centre

Hong Kong – Leading Global Financial Centre

Hong Kong is one of Asia’s most fashionable cities. It’s expensive; flashy; crowded. It houses superior talents, extreme weather, and overcrowding. But these are mere symptoms of the attraction Hong Kong offers so many. If you read the rankings awarded to Hong Kong, you might think the former city-state was contending for world’s top jurisdiction in just about everything:

• Economics – In 2011, Hong Kong was named the freest economy in the world for the 16^th consecutive year.
• Finance – Hong Kong placed 3^rd-largest receiver of FDI in 2010.
• Politics – Out of 173 jurisdictions assessed, Hong Kong’s government was perceived as 13^th-least corrupt in the world.
• Government – Measuring business regulations, Hong Kong is the world’s 2^nd-easiest place to do business, following Singapore.
• Society – Hong Kong “very high” on the Human Development Index, at 21^st place in 2011.
• Infrastructure – Hong Kong International Airport was named ‘the world’s best airport’ in 2011, by the World Airport Awards.
• Property – In 2011, The Economist named Hong Kong housing the most overvalued in the world, while Forbes named Hong Kong office property as the world’s most expensive.

The preceding list is by no means exhaustive!

What makes Hong Kong rank so high?

Hong Kong’s inception as a trading port created its international reputation as the point where ‘East meets West’. It has been a multicultural jurisdiction for over 150 years, and has developed an autonomous government, legal code, and economy, adapted from the British system. As a leading global financial centre, the forms of capitalism and free market economy practiced in Hong Kong are comfortable for Western investors, making it easier to entice and accept FDI.  A Western business environment at the doorstep of the developing Chinese economy, this ‘gateway to China’ packs a powerful punch for attracting businesses and investors.

Hong Kong’s cornerstone of growth has been entrepreneurs undertaking Hong Kong company formation. This vehicle has allowed vector growth for foreign direct investment into Hong Kong since colonial times.

• Investors own 100% of a Hong Kong company
• 100% control is retained over investments
• 100% of profits can be repatriated to home countries
• Company profits sourced outside of Hong Kong are legally tax exempt

“One country, two systems”

Hong Kong is considered to be part of ‘one country, two systems’ with People’s Republic of China, since the early 1980s. Because of Hong Kong’s unique history as an independent region, allowing Hong Kong to continue to thrive under its own legal, political and economic systems, including finances, commercial and cultural agreements with foreign countries.

Hong Kong Company for all levels of business

There are significant advantages to doing business through Hong Kong, and the high rankings are a testament to this end. FDI, international business turnover, and rankings have steadily climbed during the last 3 years in the midst of the global financial meltdown. It came out of that on a winning growth streak.

Below are just a few examples in which a Hong Kong company benefits at varying levels of business.

Businesses – Hong Kong has one of the lowest corporate tax rates in the world, at 16.5%.  Macau is lower but does not provide the global pulse point that belongs uniquely to Hong Kong. The strong tax advantage is most useful for a Western corporation’s Hong Kong branch company or offshore company, as repatriation of profits is permitted. These subsidiary Hong Kong company structures can be registered as their own legal entities, which many companies find to be the best way to manage regional operations. The international reputation and strong commercial centre that is Hong Kong is unbeatable in Asia, especially if Mainland China is part of a company’s business strategy.

Entrepreneurs – Because of the western style infrastructure, it is very easy for entrepreneurs to set up and run a business.

• The style of capitalism and Western legal infrastructure facilitate ease of business setup and company formation that many international business people are familiar.
• Because Hong Kong is the gateway to China, entrepreneurs can reduce their cost base sourcing products and services nearby. China’s advantageous supply sources for manufacturing, natural resources, and labour are attractive for an entrepreneurial company set up.
• Hong Kong banking centre infrastructure is first-rate and world-class. Entrepreneurs can fund their enterprises with Hong Kong banks’ financial backing, which is secure and successful.

Individuals & Investors – Incorporating a Hong Kong company and opening a Hong Kong bank account allows individuals and investors safety and security in an international location to meet their financial objectives, such as:

• Refinancing mortgages for foreign property outside of Hong Kong.
• International consultants can house revenue from clients with one cohesive cost and tax entity/structure.
• Hong Kong’s financial hub affords individuals banking safety and security in an international location, and can potentially offer more flexible liquidity currently than banks in European and American jurisdictions.

Hong Kong financial hub and banking benefits everybody – from conglomerates and large corporations, to self-made entrepreneurs and individual investors.

The Hong Kong company affects you more than you know

Historically, tax rates increase on repatriating funds during bleak financial times in hopes of bringing in cost-free revenue stream. A country’s nationals are less likely to repatriate their funds onshore if it becomes costlier. This prevents income from returning to the mainstream economy, and money is kept offshore and/or moved to secure jurisdictions. This also explains the continuous growth stream to Asia, an area of jurisdictions experiencing growth. A Hong Kong bank account is relatively easy to obtain, with the necessary due diligence, and provides advantages similar to other offshore jurisdictions.

While Western countries are continuing to fight the effects of the 2008-2009 global economic crises, investment opportunities are continuing to grow in Asia, and much of this managed through financial centres such as Hong Kong and Singapore.

If properly structured, company formation offshore is an excellent, tax-efficient strategy for entrepreneurs to conduct international business.  Each jurisdiction has unique factors that can contribute to a company’s success but popular offshore strategies at the moment include Singapore company registration and Hong Kong company formation, along with New Zealand and Ireland.

Some key facts about offshore company formation include:

1. The poor image of setting up offshore companies in tax havens can have a negative influence on potential suppliers, investors and banks. In our opinion, traditional tax haven companies have no future.
2. If properly structured, offshore company incorporation is an excellent way to legitimately minimise international taxation. Offshore tax planning is a key offshore company registration service provided by Healy Consultants. While offshore company formation is a legitimate strategy to minimise international tax, concealing information about international assets and income is illegal in the majority of countries.
3. The optimum strategy for offshore company registration is to choose a jurisdiction that i) is not a tax haven (e.g. Hong Kong), ii) is legally tax exempt (e.g. Dubai) and iii) boasts robust corporate and contract law (e.g. Singapore).
4. Cooperation between governments (e.g. UK) and tax havens (e.g. Isle of Man) is leading to more jurisdictions implementing the international standards for exchange of financial related information. Traditional offshore jurisdictions are increasingly insecure. For example, many offshore jurisdictions are subject to pressure from the Organisation for Economic Cooperation and Development (OECD) to exchange company and bank account details of foreign clients. The OECD seeks to minimise tax evasion, money laundering and terrorist financing. That said, Singapore and Hong Kong are two jurisdictions not carrying any tax haven stigma.

There are many uses for offshore companies, from personal asset protection to global business expansion.  When undertaking this strategy it is advisable to seek guidance from a corporate services professional.  With increased scrutiny from government authorities around the world it is crucial that the correct procedures are followed and the laws of the offshore jurisdiction and your home jurisdiction are met.  The experience of a corporate service provider will help to meet all obligations and make the process as smooth as possible.

Many people worry that international credit card processing is a risky endeavor.  While offshore merchant accounts do not offer the same protection as United States banks, which are insured by the FDIC, it is very possible to find reputable agents, especially for a high risk business that cannot typically sign up for a merchant account with a local bank.  Lots of successful businesses have chosen to do their banking offshore in order to save money and obtain tax benefits in countries that are more friendly toward corporations.

Some entrepreneurs choose to process credit cards for the low risk, retail aspects of their business through an American bank while using an international bank to handle harder to place transactions like MOTO or internet.  In some cases, this is the best way to reduce fees and pay less for the service overall.  International merchant service providers often have the ability to get you set up quickly, without lengthly applications or high fees, and they can be more flexible in terms of the types of businesses they accept.

To learn more about on and off shore merchant solutions, please visit www.advantageprocessors.com.

Over the years Asia has begun to show its economic significance in the world.  Hong Kong and Singapore the ‘East Asian Tigers’ have displayed strong rates of economic growth over the past three decades.  Both countries have gradually moved away from the western dependent trade activities and have moved towards highly industrialized economies, which are synonymous for being important financial centers. The strong economic performance can be attributed to their liberalized trade laws with few restrictions on trade and capital flows.

One of the great advantages of doing business in Asia is that it is home to some of the prominent emerging markets such as India and China. Both these jurisdictions have independent economies and do not rely heavily on the banking system or have access to credit from Western Banks. The growing strength of these countries buffer the detrimental effects of the economic crisis on other Asian countries. As such, some Asian economies were not as badly hit by the recession and are recovering quickly.

Many multinational organisations outsource business processes, especially IT based manufacturing units to Asian Countries. Offshoring to Asia has huge benefits in terms of productivity efficiency and ultimately profit. Entrepreneurs and investors see the importance of tapping on the growth of Asia and are motivated to relocate or expand operations by setting up a company in markets such Singapore and Hong Kong.

Healy Consultants has witnessed a significant increase in demand for company incorporation services in Asia over recent years.  Clients have set up companies in a broad range of industries, however financial services, oil & gas and technology focused companies account for a high percentage.

Find more detailed information on this Asia Business Setup website.

Offshore banking is a popular strategy for improving efficiency of international business operations. Banking offshore offers entrepreneurs many advantages that a local bank account cannot.

Some the advantages of an offshore bank account are:

1. Offshore banking allows for convenient transfer of currencies.
2. Quality offshore banking services in countries such as Singapore or Hong Kong provide security and use the strong reputation of these jurisdictions as international finance hubs.
3. Offshore banking can provide favourable interest rates.

In a post-9/11 world offshore banking is often viewed critically as it can be associated with money laundering or criminal activity. In order to avoid this stigma it is important to choose a safe and reputable jurisdiction when making a decision about where to open an offshore bank account.

Singapore and Hong Kong are regarded as two of the most reliable and well-respected locations in the world for opening an offshore account.

For more information on opening an offshore bank account with Healy Consultants visit this page: http://www.healyconsultants.com/banking-services-new/offshore-banking.html