HK Taxation problem with BVI company

2007-01-09 11:52 pm

If I'm incorporating my company in BVI(a BVI company), while I am neither sourcing from or selling to the HK market, am I responsible to pay HK tax? (However I am currently residing in HK and I'm operating the website from HK)

Another question is: what's the purpose of people incorporating their company in BVI instead in HK? whats the benefit there in general? what about cayman island, seems like its also another popular jurisdiction for incorporation(for larger companies)

回答 (1)

bwkchang

2007-01-11 4:37 am

✔ 最佳答案

If the company's profits are not sourced or derived from Hong Kong, the company is not subject to profits tax. However, if you operates the website of the company from Hong Kong to do business, you are likely subject to Hong Kong profits tax. Be careful.

Setting up company in BVI instead of Hong Kong is to get the advantage of their simple company law. For example, if your Hong Kong registered company purchase back its own shares, you need to report to Company Registrar. If your company is registered in BVI, there is no such requirements. Moreover, if the shares of BVI company is not transacted in Hong Kong, it is then not subject to Stamp Duty in Hong Kong. Furthermore, previously someone like to use BVI companies to hold Hong Kong's property to avoid Estate Duties.

Cayman Island is another popular place for setting up companies because the company law there is also very simple.

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