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OFFSHORE OPERATE Q & A
In order to operate an offshore company, in addition to the need to carefully select a country, it is necessary to pay attention to subsequent operations and reduce investment or tax risks to achieve planning objectives. There are three procedures involved, including setting up the house, setting up an account, and applying it in practice. The practical application is the core of the model, which will be influenced by the characteristics of the company and the policy of the situation, resulting in different operational results.
Which country is suitable for overseas companies to set up?
The choice of overseas registration sites shall be measured according to the purpose of setting up the company. Determine the need to make decisions based on overseas functionality after setting up the requirements. If you want to invest in a company, you need to choose a place to establish a state with the investment state, such as investing in China, you can choose Hong Kong. If it is a trade operation, choose a country that is exempt from tax In the follow-up use, it is necessary to keep abreast of the latest policies and regulations, and suggest to ask professional agency companies to avoid high-risk overseas operation mode.
Where can I open a bank account for an overseas company?
It is generally recommended that accounts be opened in areas where foreign exchange is free and unregulated, such as Hong Kong and Singapore, so that the tax planning and functional characteristics of offshore companies can be truly realized. At present, anti-money laundering incidents are getting more and more attention. When banks open accounts, the bank's review of customer information is becoming more and more rigorous. Different banks will have different account opening requirements and conditions. Therefore, if it’s expected to open an account with a foreign bank, it is recommended to consult with a experience counselor in opening an account.
What the tax norms of offshore Co.?
In general, tax-free offshore companies need to pay an annual fee before they expire, otherwise it will lead to bad debts and even the company will be cancelled. The definition of company tax exemption is that overseas income isn’t taxed, so local operations must be avoided. For example, Hong Kong companies are only required to avoid contact with Hong Kong customers.
What’s the difference between offshore co. controlled by single and double holdings ?
Double-layer holding,with offshore entities holding shares for confidentiality and control, is a strategy that safeguards shareholder identities and aids in tax planning. It's particularly valuable when dealing with multiple projects or shareholders, preventing potential tax and capital gains issues in overseas transactions.
What other common features are there for offshore companies?
In addition to investment, the use of offshore companies to engage in international trade is the most common way. In this way, it distributes reasonable profits, collects commissions, dispatches overseas funds, and rationalizes accounting and accounting. Nowadays, more and more overseas companies are carrying out individual or family asset transfer planning, such as registering overseas companies for registration of overseas real estate, collecting authorization fees, consulting fees, or lending leases with overseas companies, and Variable Interest Entity (VIE), etc., the function is very diverse.
Under the trend of increasingly clear overseas information and international tax recovery, offshore companies are gradually shifting from tax-oriented to multi-functional operational demand. It is no longer just for investment holding or international trade, but more for individuals or family financial planning, offshore trust funds, use of cross-border funds, and even overseas real estate purchases. How to effectively use the functions of offshore companies will be the key to the international competitiveness.