The term “Offshore Company” or “Offshore corporation” is employed in at least two different and distinct ways. A typical offshore company is an entity that is established in one country and operated entirely in another. This type of company is normally chartered by the offshore company registrant. An offshore corporation may also be referred to as an “in person” business trust, “in person business corporation”, “in person limited company”, “in person limited partnership”, “in person non-residential company”, “in person non-domestic partnership” and “non-domestic partnership”. Other common terms relating to these companies include “knowledge company”, “asset trust”, “trust deed”, and “provider trust”.
In recent years Hong Kong authorities have cracked down on offshore company formations and the registration of its members. Tax evasion and fraud have been major problems for foreign investors in Hong Kong. In response, the Hong Kong government has been proactive in educating foreign businessmen on tax planning and asset protection. They have also been cracking down on corporate registration schemes that were said to be enabling wealthy businessmen to reduce their taxation payments in Hong Kong and take advantage of tax havens in other foreign countries オフショア開発.
There are many reputable international banks in Hong Kong that provide a variety of offshore company options and services to their individual clients and business outside of China. Among the most well-known banks in Hong Kong are HSBC, Citibank and WLL. Several other prominent banks in China such as ACM, Bank of China and Huidong Group also allow their individual clients to set up offshore company structures.
One of the problems with offshore company formation in Hong Kong is that the options available to protect confidential information from being inappropriately accessed and disclosed are severely limited. Many countries have enacted regulatory reforms to strengthen their antistat reform laws and protect their citizens from abusive practices of offshore jurisdiction. In Hong Kong, these regulatory reforms are still being drafted and reviewed. However, there are measures being taken by the government and the central bank to improve the existing anti-money laundering and counter FinCEN regulations that are designed to protect the identity of individuals who carry out financial transactions in offshore jurisdictions.
The lack of effective KYC provisions and restrictions on direct and indirect ownership of offshore companies in Hong Kong has made it attractive to a number of wealthy individuals and businesses to set up their offshore company structures here. These individuals and businesses to exploit the lack of effective government supervision and lax corporate supervision and business activities in the onshore jurisdiction to take advantage of the lack of governmental and minimum corporate supervision in their jurisdictions. These individuals and businesses are then able to conduct their money laundering and other business activities in secret. The influx of illegal aliens from countries such as India and the rest of Asia has also created a vulnerable environment for offshore company formations. These illegal immigrants often use their status to obtain ill-gotten wealth in the form of “passive income”.
On a related note, even if legislation is enacted that effectively prohibits foreign investment, the amount of capital that can be brought offshore to form an offshore company remains restricted under the current laws of the jurisdiction where the offshore company is registered. These restrictions are unlikely to change. Hence, it is highly likely that there is going to be a continued increase in the formation of offshore company structures over the next few years. Thus, Hong Kong will continue to be a popular location for offshore business and also attract more foreign investment in the coming years.