Why Choose Hong Kong as an Offshore Tax Haven

Why Choose Hong Kong as an Offshore Tax Haven

Hong Kong has been rated the world’s freest economy by the Index of Economic Freedom for the 20th consecutive year. Having successfully steered through major worldwide ups and downs, the territory continues to have a high level of market openness (measured by freedom in finance, trade and investing).

This is enhanced by a regulatory environment that is transparent and a tax system that’s competitive. To top it off, Hong Kong’s highly spirited labor force and strong labor freedom fuel its economy with vigor and an unmatched ability to quickly recover.

Currently, Hong Kong is the absolute best option out there for a multi-currency corporate account (10 different currencies), with internet banking at one of the largest banks in the world, in one of the world’s premier and largest offshore banking jurisdictions. For more information on offshore banking go here or for investment accounts go here.

Advantages of Doing Business in Hong Kong

Hong Kong incorporates more companies per annum than any other jurisdiction and most of these are trading companies doing real business rather than asset protection or tax avoidance vehicles so there is no immediate suggestion that the company is also being used for tax avoidance.

Hong Kong is a well-known and respected jurisdiction that is not blacklisted anywhere.
Forming a Hong Kong company through our special service allows you to obtain an account in Hong Kong with one of the largest financial institutions in the world without the usual requirement of reference letters of any type.

A Hong Kong company is an essential element of doing almost any type of business in Mainland China.

World-class multi-currency banking available with some of the largest international banks in the world.

Good banking secrecy. The company can be more confidential if you use nominee director/shareholder services or set up a foundation to own all the shares in the company.

English is the main business and banking language.

Things to Consider about a Hong Kong Company

  • Directors and Shareholders are public information (using nominees can resolve this in most cases)
  • Annual accounts must be audited and filed (but information is not publicly available)
  • Local resident secretary must be appointed (nominee provided)
  • Annual fees are higher than what is normal in most other IBC jurisdictions, because of the requirements for filing company financials.

General Information about Hong Kong

Location

Hong Kong is on the south east coast of China and consists of a large number of islands and a part of the mainland totaling approximately 1,025 sq. km. The principal areas are Hong Kong Island, Kowloon and the New Territories.

On 1 July 1997 all of Hong Kong reverted back to China and became a Special Administration Region within the People’s Republic of China.

Population

The population of Hong Kong is currently 7 million made up mainly of people of Chinese origin and is one of the most densely populated areas in the world.

Political Structure

Until 1 July 1997, Hong Kong was a British Crown Colony. A governor appointed by the Queen presided over the Hong Kong government, which consisted of the executive and legislative councils.

On 1 July 1997 Hong Kong elected its own legislature and maintained its court structure. The head of the government of the Hong Kong Special Administrative Region is the Chief Executive Officer. The Legislative Council is the legislature of the Hong Kong.

Infrastructure and Economy

Separating Hong Kong Island and the Kowloon peninsular is Victoria Harbour, which is recognised internationally as one of the world’s perfect natural harbours. It varies in width from two to ten kilometers. An additional 13,517 sq. km of land has been reclaimed in the New Territories to provide additional dockyard and warehousing facilities. It is estimated that well over 100,000 containers per month pass through the port.

Hong Kong is the leading South East Asian centre for both finance and commerce and ranks as the world’s third largest financial centre after New York and London. There are more than 160 licensed banks with more than 130 foreign banks having representative offices in Hong Kong and a further 225 licensed deposit taking finance companies all of which play an active role in the financing of international trade and commerce.

Benefits of an Offshore Account

Having an offshore account, and especially an offshore investment account, enables you to access various banking products and investment options not otherwise available in your own country. This can lead to much higher returns on your offshore investments. Many offshore banks specialise in providing such services for this very purpose.

Protection from economic and political risk

In this age, one of the biggest threats to your hard-earned savings is political and economic instability.

In many countries, shaky and corrupt political structures can lead to sudden and unexpected loss of much of your personal wealth. Account seizures, freezing, complete devaluation (due to collapse of currencies) are all very real risks (which can happen just about anywhere).

Having an offshore account is the greatest protection one can have against such threats, as your money will be far removed from the potential problems which may arise in your home country. There are a number of very accessible offshore banking jurisdictions which are renowned for having extremely safe and stable political and economic environments (e.g. Singapore), so you can rest at ease knowing that your money is in much safer hands.


Higher interest rates

Standard interest rates on bank deposits in the West are abysmally low. Many banks offer interest rates which do not even keep pace with inflation, meaning the real value of your money would actually decrease over time, and there are even a few shocking examples of countries where banks have negative interest rates.

On the other hand, there are many foreign jurisdictions that offer very favourable interest rates.

Opening an offshore account in any of these jurisdictions therefore guarantees you a higher return without any additional risk or hassle.

Access to safe and stable banking systems

As was previously mentioned, many Western banking systems are well-known to be incredibly unstable and poorly structured, and the United States is no exception.

In fact, the U.S. probably has one of the most questionable banking systems of the lot, but we won’t go too much into that now…What is more important to know is that there are actually nations out there which have extremely safe and stable banking systems, with many very reputable banks to represent them.

One measure of bank safety is the amount of capital reserve the bank is required to keep to back deposits. In the US and UK this figure is generally around 5% whereas there are foreign jurisdictions which have average capital reserve ratios in excess of 20% (e.g. Belize and Cayman Islands). This, along with many other factors, makes these banks a much safer home for your hard-earned wealth.

Diversification of wealth and investments

One of the most effective ways to ensure financial security is to spread your assets across different accounts and international jurisdictions. This means that you are no longer reliant on one system, and are much less impacted by its individual shortcomings and potential collapse. Proper diversification of assets is key to obtaining both optimal returns and safety.

Many simply diversify their wealth across different accounts and asset classes within a single jurisdiction, failing to understand that this is a very limited and incomplete strategy, as it does not protect them from the overall risks which could affect the entire system within which they are operating.

Therefore, real diversification means not only a mixed asset portfolio within one jurisdiction, it requires spreading your portfolio across different jurisdictions. This is really a necessity if you want to provide adequate protection to your wealth. Opening a number of offshore accounts in different foreign jurisdictions is one of the simplest and most effective ways to go about this.

Something to consider

Unfortunately, it is starting to become more difficult to open an offshore bank account. There are an increasing number of hoops to jump through to be able to open your account. This is why it is so important to act.

Going offshore is easy

There is no time like the present, and putting off this valuable opportunity could mean letting it slip out of reach.

Also, one cannot afford to wait until after everything goes downhill in your own country, as by that time it is already too late to protect your wealth.

So even if you do not feel you will need or make use of an offshore account immediately, it is still in your best interest to open one, however small and insignificant it may be. This will give you the ability to act quickly in the future and respond to whatever situation may arise.

For more information on opening an offshore bank account or opening an offshore company talk to us at Offshore Protection

5 Reasons Why You Need an Offshore Bank Account

Increased liquidity
Offshore banks in favourable jurisdictions generally have much better liquidity ratios than your domestic banks. They keep a large proportion of your deposits on hand without lending them out, leading to greater safety and ability to access all your funds should the need arise.

Multiple currency diversification
Through in offshore banking, it is possible to hold multiple currencies; either in different accounts or even within the same account. Some offshore banking services are specifically tailored to offer a variety of currencies for you to choose from. For example, in Singapore, many offshore banks will allow you to hold dozens of different currencies in the same account. This has many practical benefits. Firstly, it leads once again to much greater asset safety, as you are protected from massive currency depreciations of a single currency. It effectively hedges your risk by diversifying across different currencies, meaning smoother and more stable returns. It also reduces unnecessary transactional costs associated with buying and selling currencies that you may need in certain situations, as you can directly access that currency from your account.

Asset protection
Keeping your assets in a foreign offshore account effectively helps keep them out of reach of corrupt domestic governments and unfair lawsuits. If your domestic accounts are frozen or your assets are seized in a court of law, you will still have your offshore account as a safeguard and means of protection. This may sound frightening, but the fact is that unfortunately such situations are far more common than we like to believe. Rather be forearmed and prepared for the worst, than end up in a crisis with no access to your money.

Privacy
Gone are the days of anonymous offshore bank accounts. In this age, total secrecy and anonymity is nearly impossible. This is especially the case for citizens of the United States with the existence information sharing requirements such as FATCA in place.

That being said, many offshore banking jurisdictions still offer much greater levels of privacy than domestic banks (where your accounts are more or less an open book for your domestic government). This can definitely be in your best interest for numerous practical reasons.

Furthermore, it is possible to obtain much higher degrees of secrecy and privacy by using an offshore company to open an investment account offshore. Opening an account in the name of an offshore company separates and dis-identifies you personally from the account. If it is properly structured, it is the closest you can come to complete secrecy and anonymity.

Tax advantages
Unfortunately, changes in tax regulations in many jurisdictions means the existence of complete tax havens and tax free areas is very rare. Even so, there are many potential tax advantages to be had by having an offshore bank account, and especially with an offshore company investment account. Many offshore accounts will have zero capital gains tax for foreigners, and favourable income tax rates, especially for well-structured companies. The existence of many double taxation treaties protects you from double taxation. Really, reducing unnecessary losses due to taxation is probably the best way to maximise your returns on investments. This is often overlooked when planning investment strategies and is actually what can tip the balance between favourable and unfavourable returns. With no additional risk, you can greatly enhance your returns by minimising taxes. We are not talking about tax evasion here, we are talking about legally and transparently reducing the taxes you need to pay on your investments.

Conclusion
In this day and age, economic and political uncertainty is at an all-time high. Many are afraid, with good reason, about the implications that this can have on their precious savings. Offshore banking is undoubtedly the best way to protect you and your money during these uncertain times. Really, it is not even a luxury, it is an absolute necessity. Whether you are looking to secure your wealth, maximise your returns, or increase your level of privacy; the right offshore account can provide exactly what you need. Furthermore, with the right support and guidance, it is simple, easy, and completely legal to create your perfect offshore backup plan. Don’t miss the boat, open one today.

Why Going Offshore is Not What You Think

The reason why the IRS and the US government are getting to be increasingly tight on overseas banks, accounts and worldwide transactions, is fear of the outflow of valuable taxable income.

The offshore industry is growing at such an rapid rate because of the current global financial uncertainties, that the US feel compelled to intrude in hopes that tax deffered revenue would cover their ever large deficit.

Banks are failing round the world (from 2008-2010 nearly 500 banks were shut in the US alone; governments are coercing their citizens (stolen retirement funds from Hungary, Poland, France); and economies are collapsing, (Venezuela, Greece, and Argentina ).

The need to secure assets is higher than ever before. With governments co-opting banks and economies falling, establishing yourself offshore is more important than ever.

Despite the attention grabbing headlines showing solemn face bankers being stricken with fines from the IRS for tax evasion, the crumbling of secrecy laws and loss of exclusive tax exemption in many offshore jurisdictions the offshore industry is still thriving.

The simple fact is that tax exemption is not a an isolated phenomena, but exists in nearly every major country in the world. That might shock a lot of readers, but the fact is, if you open a Delaware LLC, a UK LLC, an Scottish LP, Malta IBC, you can effectively have a corporate entity that will allow income generated overseas to remain free of local taxation.

The offshore industry has been given a bad rap as it is smeared through headline catching controversies. We have been told a narrative that the offshore industry is filled with linen clad cigars smoking cronies who do nothing but sit around in cabanas all day throwing their money in the air from their Caribbean mansion.


We’ve been told that offshore banking is sexy. We provocatively weave a story to fit our imagination, because we know no other reality.

And it seems these story tellers did a great job, because today offshore banking has such a bad reputation that people think its identical with tax evasion.

The very simple reality is that its perfectly legal. Possessing an offshore account if from the Caribbean or even Germany makes no difference. If I live in the UK and have a bank account in Canada, I effectively have an offshore bank account.

Or if I am a UK national residing in Australia with a Cyprus IBC Company I have an offshore company.

An Offshore account is very similar to an overseas account, and for most practical purposes they are synonymous. The only differences lay in the taxation and internal structure.

An offshore bank account is not as mysterious and exotic as its made out to be. There are many tax regimes that offer tax breaks to infant industries or to encourage foreign investment.

It is of no surprise, then, that over 70 percent of Fortune 500 use offshore companies as a means to lower their tax-burden.

The real truth about the offshore market, is that the average person who uses an overseas account, is not some wealthy fat cat sitting on piles of cash, but is a middle class individual looking for asset protection for profession or security for their family.

Despite whatever is said about offshore market, it will continue to provide services for those looking to take advantage of local laws in the global market.

Providing Customised Multi-Jurisdictional Offshore Company Formations and Personalised Offshore Legal Services Since 1996.

Everyone’s financial situation is unique. That’s why we at Offshore Protection specializes in providing customized tax-efficient corporate structuring, multi-jurisdictional offshore company formations and offshore legal services tailored to your specific needs. As your offshore business evolves, you can depend on Offshore Protection to provide you with up-to-date expert advice and strategic offshore solutions geared to your success.

https://www.offshore-protection.com/

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