Amicorp-Financial Services Hong Kong,Holding Company Formation,Administration,Double Taxation,Trusts

Hong Kong

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The simple, beneficial tax system of Hong Kong has made it an excellent location to operate international trade companies and a financial centre for generations. Whether used for holding participation shares in passive or active investments, acting as an intangible licensing port or engaging in actual trade activity, Hong Kong is an ideal gateway for connecting the world to China, the Far East and the world. The Hong Kong regime is well suited for international revenue planning. The income tax system is based on the source (i.e., territoriality) principle. This system only taxes profits arising from business activities occurring within the territory of Hong Kong. As a result, all non-Hong Kong sourced income may be collected tax-free and distributed as dividends free from both income tax and withholding tax to many countries (e.g., Netherlands and Switzerland).

The current corporate income rate in Hong Kong is 17.5%. Tax losses can be carried forward without any time limit.

The advantages of the Hong Kong corporate regime include:

· Double Income Taxation Agreements with China, Belgium and Thailand

· No taxation on the receipt of dividends

· No withholding taxes on dividends or interest

· No withholding taxes on all but certain royalties

· No capital gains taxation

· No 'interest gain' tax

· No tax on income from foreign earned deposits held in Hong Kong

· No currency exchange controls or restrictions

· Advance tax rulings are available

· Territorial income tax system

· Profits taxable in Hong Kong are only subject to 17.5% tax

· No foreign exchange restrictions

Amicorp Hong Kong provides all Amicorp Group products and services. Some principal structures employed through Hong Kong include:

Trading Companies

Hong Kong companies are ideal entities for international cross-border trading. Hong Kong trade companies usually avoid local corporate income taxation due to the territorial tax assessment system. A multitude of various transactions are available including import and exportation of goods and the re-invoicing of goods and services. This is usually the purchasing of goods from China/Asian countries and their resale through the Hong Kong Company. As the sales of the Hong Kong Company are made outside the Hong Kong territory there is no income tax on the profits. The structure can also be employed for the provision of consulting services. Where used for the purchase of products in China, profits received can be managed to remain outside China for future investment uses within a trading group. In this structure, the Hong Kong trade company is seen as a separate entity due to the 'one country, two systems principle' of the region. Beyond mere re-invoicing, the Hong Kong Company can so contribute value to the resale process (e.g., product development, quality control and logistical services).

The Hong Kong / Belgium Route

Hong Kong's first Double Income Tax agreement was with Belgium. The benefits of a tax treaty provide that withholding tax on Belgian distributions made to Hong Kong can be eliminated provided, the Hong Kong company holds a substantial interest in the share capital of the Belgian company. The reductions through Belgium are quite advantageous considering the freedom to utilize the European Union's Parent/Subsidiary Directive. This Directive eliminates withholding taxes on intra-European Union distributions of interest, royalties and dividends from Belgium. This link creates an attractive exit route from Europe.

Other common uses for Hong Kong companies include:

· Asset Holding Structures: Tax-free income from assets, such as real estate

(non-Hong Kong), security portfolios, intellectual property (i.e., providing

licensing royalties) and ships

· Savings Structures: Often used to remove foreign exchange limitations and

European withholding tax on directives on interest earned by European residents

· Royalty Structures: Licensing or the sublicensing of technology, copyrights,

films and know-how globally

· Financial Intermediary Structures: Interest flowing from back-to-back loans made

through a Hong Kong may pass without any taxation (provided the loan is from

sources outside Hong Kong)

Languages spoken: Cantonese, English, Dutch, French, German and Putonghua.