Three alternatives to Hong Kong for your offshore trading company in China

Posted on April 7, 2010 by patrick 1

Due to its financial and business center status, as well as its proximity to mainland China, Hong Kong is usually at the top of the list for our clients looking to set up an offshore company with the main purpose to trade with China. While Hong Kong clearly has its advantages, there are however three other alternatives worth considering: the British Virgin Islands, Marshall Islands and Seychelles.

The advantages shared by these three, as compared to Hong Kong are the following:

-Low incorporation and yearly maintenance fee.

-No profit return filling requirements.

-No filling or annual audit of financial statements.

-Better privacy as to the scrutiny from the Chinese government.

-Better protection of company shareholders/directors which cannot be checked from the public record.

-Clear distinction between the onshore/local companies and the offshore ones (International Business Corporations or IBCs).

-Possibility to issue bearer shares, or shares with or without par value (Please note however that most banks currently do not accept to open bank accounts for companies with bearer shares).

The British Virgin Islands are one of the oldest and better established offshore jurisdictions. While concerns exist as to subsequent tax treaties BVI has entered in recent years, it is still a very suitable jurisdiction for setting up an offshore trading company.

Seychelles is a younger offshore jurisdiction, the International Business Act dating only from 1994. It is an increasingly popular jurisdiction worldwide, and is gaining acceptance in China as well.

The Marshall Islands are much less known than the BVI or even Seychelles. This jurisdiction has the lowest fees for both registration and annual maintenance. Most of the functions of the Marshall Islands IBC are similar to the BVI or Seychelles ones.

Offshore companies registered in the BVI, Marshall Islands or Seychelles can also easily open a bank account in Hong Kong. Sinoinvest Consulting provides a remote account opening service for a one-time USD400 fee; you can also contact any Hong Kong bank and travel to Hong Kong to set up your account provided you have all the paperwork in place.

The BVI, Seychelles are Marshall Islands are true offshore jurisdictions, while Hong Kong companies do not have a separate regime for companies operated from within or from outside Hong Kong, but only specifies that non-Hong Kong sourced income is not liable for tax with the Hong Kong government. However, even when that is the case, one needs to apply for exemption from the tax authorities, and in case you operate your bank account in Hong Kong, you might be required to justify that the operations of the company are not related to Hong Kong. To avoid all this hassle, if your company will be mainly used to buy or sell to/from China, selecting one of these three jurisdictions will make a better business sense in the long term.

IMPORTANT ADVANCE NOTICE

Posted on March 30, 2010 by alice Reply

In order to carry out the year-end closing of our accounting records, instant services for “new business registration” and “updating of change of business particulars” will be suspended on 1 April 2010 (Thursday). The Business Registration Office will resume normal services in the morning of the working day, i.e. 7 April 2010 (Wednesday), immediately after the public holidays during 2 April 2010 (Friday) to 6 April 2010 (Tuesday).

As our computer system needs to adjust for the new financial year, the relevant business registration certificates for the “new business registration” applications received on 1 April 2010 (Thursday) will be issued in the morning of 9 April 2010 (Friday). Any inconvenience caused is much regretted.

Business Registration Office
(From the IRD government website)

WFOE Registration-Office Address

Posted on March 22, 2010 by alice Reply

Before starting to set up a WFOE in China, the client has to rent an office or a plant (for manufacturing company) in advance. The office could be located in any normal office building in China which could run business. But a virtual address is not allowed for the registration.

Originals (2) of lease agreement (minimum 12 months), and copy of title deed of registered office will be needed during the registration and one thing for clients to remind is that please make sure in the lease contract that the office could be registered a WFOE and otherwise the Landlord should refund the rental. One office room is only allowed to register one company and an already taken office is not available.Registered address and operation location should be the same and if the office address is changed to other districts, all the licenses with business address have to be updated.

WFOE Registration–Minimum capital

Posted on January 7, 2010 by alice Reply

The minimum registered capital for a WFOE registration will be different according to the different industry, for a company engaging in services, consulting and technology development, it needs RMB100,000.For a company mainly engaging in trading, wholesale or retail,RMB500,000 is required. For a manufacturing company which is engaging in production operation, the minimum registered capital requires RMB 500,000. In most of cities the above is available such as in Shanghai, Hangzhou, Shenzhen, ect. Generally speaking, all of the registered capital can be paid in one time (within 6 months after the date of the issuance of the Company’s business license) and can also be paid for many times in two years (In the first 3 months, 20% of the registered capital is mandatory).

Different clients have different needs and requirements for setting up a WFOE in China depending on the industry, company size and business scope, therefore choosing a professional agency for assistance is very important. Sinoinvest Consulting could provide you overall services for a WFOE registration in China.

Something you may not know during a WFOE formation in China

Posted on December 17, 2009 by alice Reply

The most popular type of running business in China for foreigners is to form a wholly foreign owned enterprise (WFOE).However, obtaining a business license of WFOE is not a little case even for the local Chinese registers. It requires lots of paperwork and a long and complex procedure. Therefore, with the help of a local professional consulting company to take care of the application process is obviously necessary.

It will take two to three months to complete the formation in practice, even though the law says that the process should take no longer than two weeks. Why is it so time consuming? Filling out all the paperwork, preparing long lists of documents such as certificates of incorporation, bank reference letter, leasing contract of office address, ect will take time to begin with. Then, there likely will be obstacles which require correct “guanxi” to be in place. “guanxi” could make whole steps go faster and more smoothly.

For yourself, you just focus on providing all correct information including names, investment amounts, ownership percentage, ect. Pay more careful with the spelling of numbers and foreign names as most Chinese write in a different form of English letters with the local English speakers which may cause trouble getting them right.

As for opening bank in China, they use stamps rather than signatures. Each company has a company stamp, special financial stamp and the legal person has a personal stamp. All banking matters as well as signing contract require you to stamp on the papers. This means that stamps need to be kept in a especially careful way.

Upon the successful registration,you will get all licenses which are packed with red or green covers including business license, enterprise code license, foreign exchange certificate, tax certificate, financial certificate, ect and then you could start your business in China.

Tips for Successful Offshore Company Registration

Posted on December 8, 2009 by alice Reply

With the advanced technology and economic globalization, forming offshore companies has become a popular trend .Here I listed several tips for a successful offshore company registration.

Find your own reasons to go for an offshore company:

Tax saving
Asset protection
Flexible business law
Privacy
Lawsuit protection

Main steps involved during a successful offshore company registration:

Selecting a jurisdiction which suits your business is the first important step.
Finding a professional corporate consulting company is critical, through which you could learn the details regarding the issues of legal, financial and tax aspects of the company and business.
Identifying an ideal corporate bank account to facilitate your international trade.
Understanding the types of taxes and exemptions allowed in the chosen jurisdiction.
Checking the rate of renewal fee because nearly all jurisdictions demand an annual fee.

Upon the registration of your offshore company, you will receive a certification of incorporation which is the legal proof of existence of this company.

Advantages of Delaware Incorporation

Posted on November 30, 2009 by alice Reply

More than 308,000 companies have been registered in Delaware including 60% of Fortune 500 companies and 50% of the corporations which were listed on the NYSE. Read below you will understand the reasons why Delaware is recognized as the best choice for a US company formation.

The incorporation and maintenance costs are lower than other jurisdictions in the world. Compared to other jurisdictions, Delaware company formation needs an easy procedure, the incorporation process often takes a very short time and anyone no matter what country he or she comes from could form a company in Delaware and no need to come to visit there in person.

What’s more, as long as it doesn’t conduct any business, a Delaware company is not subject to income tax and also the State of Delaware will not impose sales taxes.

A Delaware company formation helps to protect assets and the Delaware LLC could enjoy a high level of privacy, the company officer’s private information will not be disclosed on the public record. Both Delaware LLC and Delaware Corporation are required to file an Annual Report (corporation) or pay an annual franchise tax (LLC) to remain in good standing but the electronic filing systems are available to reduce the administrative burden.

With flexible business entity statutes, well-developed case law, Delaware offers an unparalleled environment in which to organize business entities.

Did you invest in China?

Posted on October 29, 2009 by alice Reply

Chinese official says that a large amount of the global top companies have invested in China Since the mid-1990s, and more and more overseas companies have been making their way into Chinese market. The investment covers almost all fields like the manufacturing, service, and rural infrastructure construction sectors, ect. And meanwhile Chinese investment environment has been improving in a large scale which has attracted more and more foreign investors.

Even though the high-tech and trade service industries were most favored by foreign investors, projects funded by foreign companies involve oil, chemical, electronic, machinery, computer, telecommunication equipment, ect. Nearly 90 percent of the projects funded are located in coastal areas and cities such as Shanghai, Guangdong, Jiangsu, Beijing and Shandong, ect.

For some new companies, they usually set up representative offices to do some market research and test the market before they commit themselves to invest in China. By using both the markets and resources from their own homes and China, these companies have remarkably improved their international competitiveness.

Sinoinvest Consulting has moved to a new office

Posted on October 21, 2009 by alice Reply

We have moved to a new location to support the rapid growth and the continuous development of the company. The new office is located in the Sichuan North road, a well-known commercial zone in the Northern part of Shanghai. We have also added new staff and are recruiting more professional talents who will enable us to offer more value-added services for our customers.

We are also continuing to expand our network of partners worldwide, which will benefit our clients.

Please visit our website at www.sinoinvest.hk to find out our new address and learn more about our services.

Seychelles shelf companies available

Posted on May 21, 2009 by admin 3

We have a list of Seychelles shelf / ready made companies available. Price is USD900; these companies can be transferred within 5 days. Contact us for details and names.