FAQ of Offshore Company Formation

Bizformation offers comprehensive offshore company setup and registration services. We prepared a list of frequently asked questions (FAQ) about offshore company formation below to help clients searching a quick answer. If you found specific questions which we did not cover below or wish to get more information, please contact us.

 

The questions covered are:
Q1) What is an offshore company?
Q2) What are the benefits of offshore company formation?
Q3) Which banks accept offshore company to open bank account?
Q4) Who should register an offshore company?
Q5) How much registered capital should be issued for an offshore company?
Q6) Are there any restriction on the offshore company name?
Q7) Can Chinese name be used in the offshore company name?
Q8) How many shareholders and directors are required for offshore company registration?
Q9) Will the information of directors and shareholders of the offshore company be accessed by the public?
Q10) Does an offshore company operated in Hong Kong not declare to the government for tax purpose?
Q11) What are the requirements for an offshore company to open a bank account?
Q12) How do I know the existence and legitimacy of the company after offshore company incorporation?
Q13) Can I amend the company’s articles of association and other documents after registration?
Q14) How can I get the credit certificate that Chinese government requires for investment in China?

 

Answer Section:
Q1) What is an offshore company?
Ans: An offshore company is described as a non-resident company that usually has a low- or zero-tax rate and is specifically used for international, cross-border purposes and is not permitted to engage in business within the jurisdiction which it is incorporated. The most popular offshore jurisdictions are Samoa (Samoa company), British Virgin Islands (BVI company), Cayman Islands, Bermuda, Seychelles (Seychelles company), Vanuatu (Vanuatu company / VIC company), etc. Compared with the traditional company, the main difference are that offshore company offers tax efficiency or tax exemption for offshore business, high confidentiality, secure private information, and the government levies low annual license renewal fee instead of tax.b_up

Q2) What are the benefits of offshore company formation?
Ans: There are many benefits of offshore company formation. They include: faster & easier to register, low setup and maintenance cost, high confidentiality, secure private information, simplified accounting and audit requirements, stronger legal system, flexibility of funds allocation, tax exemption for offshore business, no restriction on the scope of business operation and area restriction, etc.b_up

Q3) Which banks accept offshore company to open bank account?
Ans: There are many banks accept offshore company to open bank account. They include: HSBC, Standard Chartered Bank, ABN Amro, Fubon Bank, Citibank and so on.b_up

Q4) Who should register an offshore company?
Ans: An offshore company may be of interest to various people for various purposes and activities. The most common reasons are: convenient in trade, lesser government intervention and foreign exchange controls, legitimate tax saving, or political and economic instability, etc. Generally, the users can be classified into individual users and business users.
For individual users, offshore company can be registered for investment and tax planning, property & asset holding, estate & succession planning, financing, immigration pre-planning, confidentiality privacy, etc. They are mainly high-income earners, entrepreneurs, intellectual property owners, property inheritance, lawyers, doctors, consultants / counsellors and other professionals.
For business users, they include multinational conglomerates, shipping companies, financial companies, stockbroker / forex, international trading companies, commerce over the internet (eCommerce), holding companies, foreign direct investment companies, franchise companies and fund management companies and other offshore centers, listing on international stock exchanges, etc.
We suggest to seek for a tax advisor in your country of residence before setting up an offshore company.b_up

Q5) How much registered capital should be issued for an offshore company?
A: The registered capital depends on your business operating scale and its use. Moreover, there are different capital requirements for different jurisdiction. For more details of the registered capital for various jurisdictions, please contact us.b_up

Q6) Are there any restriction on the offshore company name?
Ans: Generally speaking, the offshore company name must include “Limited”, “Corporation” or the abbreviation form such as “Ltd.”, “Corp.” or “Inc.”. If the company name chosen has been registered, it should not be used. Besides, offshore company name generally can not contain the words “bank”, “insurance”, etc.b_up

Q7) Can Chinese name be used in the offshore company name?
Ans: Some jurisdictions are able to use Chinese offshore company name, for example, in the British Virgin Islands (BVI), the Cayman Islands, Samoa, Vanuatu, etc.b_up

Q8) How many shareholders and directors are required for offshore company registration?
Ans: Generally, it requires at least one shareholder and director to set up an offshore company. The shareholder and director may be the same person.b_up

Q9) Will the information of directors and shareholders of the offshore company be accessed by the public?
Ans: Most of the offshore company registration laws have secrecy regulations which do not allow to disclose the identity of shareholders and directors to the general public.b_up

Q10) Does an offshore company operated in Hong Kong not declare to the government for tax purpose?
Ans: No, an offshore company operated in Hong Kong should be registered as a registered Hong Kong offshore company that obtain business registration certificate and pay income tax for the profit generated from Hong Kong. The profit obtained outside Hong Kong is not taxable.b_up

Q11) What are the requirements for an offshore company to open a bank account?
Ans: Offshore bank account opening procedure is similar in all jurisdictions. Generally, an applicant has to provide due diligence for himself and the company if a corporate bank account is needed. Personal due diligence includes certified passport copy, proof of address, character and bank references. Due diligence for a company includes certified corporate documents proving the company legal existence and address.b_up

Q12) How do I know the existence and legitimacy of the company after offshore company incorporation?
Ans: After the offshore company incorporation, we deliver our clients the Certificate of Incorporation, share certificate, the common seal & chop, and Memorandum & Articles of association, etc. If necessary, we may also help customers to obtain a certificate of good standing (certificate of existence) as a proof of the existence of the offshore company.b_up

Q13) Can I amend the company’s articles of association and other documents after registration?
Ans: After the offshore company setup, it may add or modify the articles of association and other documents.b_up

Q14) How can I get the credit certificate that Chinese government requires for investment in China?
Ans: After opening a bank account and depositing sufficient funds, credit certificate can be issued upon request.b_up

 

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