July | 2018 | Offshore Companies International

Why Incorporate in Hong Kong?

We are often asked Where is the best place to incorporate my tax free Offshore Company?

It may interest you to know that to date over 75% of all clients have chosen to incorporate their nil tax Company in Hong Kong.

Hong Kong is a terrific jurisdiction in which to house a Company in that:

1. HK does not tax its Companies on income earned outside of Hong Kong

2. HK companies are not widely perceived as “Tax Haven” companies

3. There is so much money flowing out of China via Hong Kong to places like the US and Europe on any given day that payments from a HK company to you are unlikely to attract regulatory type inquiry.

4. Hong Kong is the gateway for investment into China and ideal location for your international headquarters if you aspire to sell your products or services in China

5. Hong Kong is nowhere near as regulated as other big financial centres. Many businesses/companies that would otherwise require special licenses elsewhere to do business can operate in and from Hong Kong as of right.

6. (If you aspire to live in Hong Kong) work/residency permits are relatively easy to obtain once you register a Company/Business in Hong Kong.

7. Hong Kong has a highly educated and relatively inexpensive work/labour force.

8. Availability of high quality professional and ancillary services: Historically Hong Kong is the New York of the Orient and hence offers access on the ground to high quality law firms, Banks, Finance/Accounting Professionals etc.

9. Hong Kong doesn’t levy CGT (Capital Gains Tax) and does not impose WHT (withholding tax) on payments made by a HK Company to person/entities resident outside of HK which makes a Hong Kong Company an ideal structure for holding shares in other companies or as an IP holding entity

10. Incorporating in Hong Kong will give you access to THE widest selection of banks. (A number of banks will not accept “island tax haven” type Companies as customers including all Hong Kong Banks and several noted European banks)

Additionally a Hong Kong Limited Company isn’t classified as a for offshore use only corp and thus, at Incorporation, it is given a Business License PLUS a local tax number. Internationally more and more suppliers are asking to sight a tax ID before they will do business with you. Not all Offshore jurisdictions can or will supply a Tax Number.

(and if you run a website business you might like to note a Hong Kong Company is the only zero tax company we are aware of for which Paypal will supply a Merchant account)

To set up a Hong Kong Company may not be as expensive as you think. With OCI you can incorporate a nil Hong Kong for as little as $US2,500.

Would you like to know more? Then please Contact Us:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

Umm Al Quwain Companies

Umm Al Quwain Free Trade Zone (UAQ FTZ) is located in Umm Al Quwain, one of the United Arab Emirates’ (“UAE”) seven emirates renowned for its modern infrastructure and striking natural beauty.

Umm Al Quwain (also a growing tourist destination within the UAE) being a relatively new Free Trade Zone in the UAE, offers very competitive fees plus the ability for documents to be signed remotely (an Umm Al Quwain FZ company can be set up without the shareholders being present at the time as long as they visited UAE in the past).

Benefits of incorporating in Umm Al Quwain (“UAQ”) include:

• access to the UAE’s extensive network of Double Taxation Avoidance Treaties (the UAE has signed DTAs with over 80countries
• 100 per cent foreign ownership is permitted
• zero corporate and personal income taxes
• An UAQ Corp can have up to 50 shareholders
• 100 per cent import and export tax exemption within the FTZ
• fast registration process
• proximity to two international airports, Dubai and Sharjah, and major sea ports
• no restrictions on hiring foreign employees

Types of licences allowed when registering an Umm Al Quwain Company

1. COMMERCIAL LICENSE (TRADING LICENSE)
There are two types of license, which fall under this category: Commercial License and General Trading License.
Commercial License: This authorizes the import, export, distribution and storing of items specified on the license. A Commercial License can have three different product lines or 10 similar product lines.
General Trading License: This enables the licensee to trade in a wider range of activities and gives the freedom and flexibility to trade in any commodity, which is permitted within the UAE.
Note: Commodities which require special approval or clearance from various UAE authorities e.g. explosives and armaments cannot be traded with a General Trading license.
Usual activities include i.e. Trading with Automobiles, Seeds Trading, Coal & firewood trading, cotton and natural fibers trading, etc.

2. CONSULTANCY LICENSE
This is for entities, which offer expert or professional advice, and is issued to all manner of professionals including artisans and craftsmen. It allows two similar activities.
Activities usually registered include Marketing Consultancy, Management Consultancy and IT Consultancy.

3. FREELANCE PERMIT
This allows an individual to operate as a freelance professional, and conduct business in one’s birth name as opposed to a brand name or company. The Freelance Permit is designed for individuals who operate in technology, media and film sectors, and is issued to talent roles, creative roles and selected administrative roles. (Activities usually registered include Actors, Artists, Photographer and Producers).

4. INDUSTRIAL LICENSE
This enables the licensee to import raw materials, then manufacture/ process / assemble / package the specified products, and export the finished product. It allows the holder to import raw materials for the purpose of manufacturing, processing and/or assembly of specified products.

5. SERVICE LICENSE
This license is for service providers. It permits the licensee to carry out the services specified on the license within the Free Zone, such as Logistics; Courier Services; Insurance Service Provider; Travel Agency; Tour Services; Car Rental etc.

Obtaining an Umm Al Quwain tax resident certificate and residence permits

An Umm Al Quwain FZ Corp can issue residence permits and obtain tax residence certificates from the UAE authorities for its foreign owners and executives. A FZ company, must have physical presence in the UAE and, in that respect, it must own or hire premises.

Private accommodation is not necessary for Umm Al Quwain Free Trade Zone Authority when applying for residence but many do this to reinforce their case for substance and legitimacy.

As far as the company is concerned, it must have physical presence in the UAE. In that regard, the most interesting and cost effective options are proposed by free zones situated in a number of emirates including Umm Al Quwain Free Trade Zone (UAQ FTZ). Usually, these options consist of “flexi desks” or “flexi offices”.

Furthermore, and if a local bank account is maintained with regular account movements, the foreign owners and executives can apply to the UAE Ministry of Finance to receive UAE tax residence certificates.

A UAE residence permit and a tax residence certificate can be useful to foreign owners and executives who wish to register their tax residency in the UAE. It is worth noting, that banking institutions in UAE and many outside consider UAE tax residence certificates as sufficient proof of tax residency in the UAE.

UAQ Companies in Summary

Main Characteristics:

 100% foreign ownership permitted;

 Tax free;

 Large variety of permitted activities;

 No exchange control;

 Easy and fast incorporation procedure;

 Good location and access to the main sea routes;

 Ideal conditions for micro business.

Company type:

FZE (Free Zone Establishment) – owned by 1 person or entity.

FZC (Free Zone Company) – from 2 up to 50 shareholders.

Brunch of local or international company

License type:

 Commercial License

 Consultancy License

 General Trading License

 Premium Consultancy License

 Micro Business License

 Freelance Permit

Share capital:

The minimum Share capital for a standard FZE and FZC is 300,000 AED. No supporting documents are required.

Types of Offices:

Smart and Physical offices. A wide range of warehouses and land.

Visas:

 For micro business – 0

 Freelance permit – 1

 Consulting / commercial – 2

 General trading license – 3

 Premium Consultancy -3

Accounting: Accounting is not required

Reporting and auditing: Company is not required to keep records.
Umm-al-Quwain FTZ

Startup Business Package (USD)

The best option for the clients, who require only one Visa:
Activity	Commercial or Consultancy
Visa Eligibility	One visa
Facility	Shared work station
Company Incorp Package (USD) : Cost: 3,700
Professional Fee	3,500
Total**	7,200
Company renewal from the 2nd year:
Company Renewal Cost	3,700
Professional Fee	3,000
Total**	* Package includes: Company registration, Annual license fee, Premium office facility, Establishment card. Visa fee isn’t included and is paid additionally Visa cost: Investor Visa:** Visa Package (USD 995) + Medical Fitness Test (USD 320) + Emirates ID (USD 150) (3 years VISA) + Professional Fee (USD 950). Transport Expenses for visa obtaining aren’t included in the package and will be charged additionally.

OTHER PROFESSIONAL SERVICES Assistance in bank account opening in UAE	USD 975
Professional Fee for the License renewal (from the 2nd year)	USD 3000
Assistance in obtaining visas	USD 950 (1 Visa)
Assistance in renewal visas	USD 700 (1 Visa)
Visa delivery to the airport (visa drop-off)	USD 135
Business Plan preparing	USD 475

Documents required:

 Passport copy of the shareholder, manager;

 Copy of the passport page with entry stamp to the UAE;

 Utility bill as proof of address (within the latest 2 months) for each shareholder / manager;

 3 company names (on preferential basis);

 Activities;

 Signed UAQ FTZ application form (AC Business Experts consultants will prepare the draft);

 Signed Memorandum of Association (AC Business Experts consultants will prepare the draft).

Time Frame:

 Company incorporation (2 – 4 working days);

 Establishment Card (12 – 18 working days);

 Entry Permit (3 – 4 working days);

 Visa status change inside the country if required (3 – 4 working days);

 Medical Fitness Test + Emirates ID Application (2 – 3 working days);

 Visa Stamping (2 – 3 working days).

Would you like to know more? Then please Contact Us:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

Wyoming Passes ICO Enabling Legislation

Wyoming’s state legislature and Governor have signed into Law new provisions that will exempt certain types of crypto assets from securities laws.

The legislature recently passed, and the governor signed, five bills that many in the Cryptosphere view as highly beneficial to blockchain, ICO and cryptocurrency businesses.

The Wyoming lawmakers have also finished work on measures to exempt cryptocurrencies from the state’s money transmission laws and approve the use of blockchain-based records for corporations.

The key provisions exclude “a developer or seller” from the applicable securities laws provided the Developer/Seller complies with certain conditions; Specifically, that the token being offered isn’t being offered as an investment and that the token can be exchanged for something – ie, that it has some kind of utility.

The exemption will also only apply in the event that the seller or developer “has not entered into a repurchase agreement of any kind or entered into an agreement to locate a buyer for the token.”

In addition, the new law also lays out an exemption from being classified as a broker-dealer in relation to the token, provided that the standards listed above are met.

Certain parties are excluded from the bill, namely banks and other financial institutions such as credit unions and savings and loan associations.

Blockchain Tokens

Bill number HB 70 addresses “open blockchain tokens.” With certain exceptions, the bill exempts from specified state securities laws and the state money transmitter law, certain activities related to such tokens.

Firstly, the said law exempts from specified state securities laws a person who develops or sells the token if:

(a) the person files a notice of intent;

(b) the “purpose of the token is for a consumptive purpose, which shall only be exchangeable for, or provided for the receipt of, goods, services or content, including rights of access to goods, services or content;” and

To fulfil this third element, the token cannot be marketed as a financial investment and at least one of the following criteria must be met:

the developer or seller must reasonably believe he/she sold the token for a consumptive purpose;
the token has a consumptive purpose available at the time of sale and can be used at or near the time of the sale for that purpose;
the initial buyer is prevented from reselling the token until it can be used for a consumptive purpose; or
the developer or seller takes reasonable precautions to prevent buyers from purchasing the token as a financial instrument.

The provisions st out in (b) and (c) attempt to cover what is commonly known as a “utility token” or “consumer token.”

Secondly, the new law exempts “facilitators” (ie persons “who facilitate the exchange of an open blockchain token”) from specified state securities laws if they file a notice of intent, have a “reasonable and good faith belief” that a token subject to exchange meets the requirements of (b) and (c), above, and take “reasonably prompt action” to cease exchanging any token that does not meet those requirements.

Thirdly, the new law exempts from the state money transmitter law a person who develops, sells, or facilitates the exchange of an open blockchain token.

Interestingly, this exemption is not limited only to those tokens that meet the requirements of (b) and (c), above.

Taken on face value these new legislative provisions would appear to place Wyoming on the list of tax jurisdictions wherein one might consider launching/incorporating an ICO (particularly given that a Wyoming LLC can, if structured a certain way, potentially deliver a nil tax outcome).

Would you like to know more? Then please Contact Us:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

How To Set Up a Private Offshore Company

If you don’t want a competitor to know that you own a particular enterprise or if you don’t want outside parties to be able to find out (without your consent) how much profit your business is making then you might want to set up a Private Offshore Company.

To ensure that your Privacy is safeguarded there are, in essence, five boxes you will want/need to tick.

Firstly to minimise the chances of your ownership of the company being discovered you will want to ensure your Private Offshore Company is incorporated in a country which does NOT have a Tax Information Exchange Agreement (“TIEA”) with your home state (or a DTA ie a Double Taxation Avoidance Agreement as these Treaties sometimes have information exchange provisions) .

Secondly you might want to open an account at a Bank which can/will issue you with an anonymous card ie a VISA or Master or etc Card on which your name (and ideally your company name) does not appear. (such banks/products do still exist us Contact Us for details).

Thirdly, for maximum privacy, you’d be well advised to include a (nil tax jurisdiction resident) Nominee Director/Shareholder as part of the Corporate structure. For more information on how that can work for you please read these pages:

https://offshoreincorporate.com/faq/should-i-engage-nominees-or-should-i-direct-and-hold-the-shares-in-my-offshore-company/ &

https://offshoreincorporate.com/faq/how-can-i-protect-my-underlying-ownership-of-my-offshore-company-where-a-nominee-is-engaged-to-act-as-director-or-shareholder/

Fourthly, if you want maximum privacy and to avoid your name being recorded anywhere as the “beneficial owner” of the Company then you would be wise to include a Private Foundation as part of the Corporate Structure (ie to hold the shares of/own your Private Offshore Company).

Fifthly, if you don’t want your name to appear anywhere in the bank’s records you could also nominate someone else to be the signatory on your bank account. (A/The Nominee Director is commonly deployed for this purpose).

Some International Corporate Services Providers can also supply a Nominee Beneficiary for your Foundation so that your name doesn’t appear in the bank record as a Beneficiary of the Foundation when it comes time to apply for a bank account. Alternatively you could set up what’s known as a Discretionary Foundation (ie one where beneficiaries can be added or removed at any time) and nominate a tax free Charity as the initial beneficiary.

Would you like to know more? Then please Contact Us:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com