Forming Hong Kong company with Nominee service

Offshore Business Q&ACategory: Hong Kong CompanyForming Hong Kong company with Nominee service
David DancerDavid Dancer asked 2 years ago

I’m a citizen of Sweden and intend to work as a consultant with customers worldwide, but having my own living base in Thailand.

Therefore I am interested in company formation services.

Forming a company in HK seems attractive, although there may perhaps be other interesting options. Perhaps you have some suggestions, given my intended situation?

I’m interested in incorporation and maintenance of Hong Kong company, i.e. also accounting, mail handling, company secretary etc.

I would like the company ownership to be anonymous if possible.

To this effect, I have some questions about the Nominee shareholding / Nominee Directors for Hong Kong companies:

1) How many percent of the shares can I own?
2) If I own 50% or less, how can I legally maintain control?

1 Answers
Best Answer
Alex MarxAlex Marx answered 2 years ago

Hi David!
Please see the answers below:
1) How many percent of the shares can I own?
Normally Nominee Shareholder in Hong Kong owns 100%
2) If I own 50% or less, how can I legally maintain control?
Nominee Shareholder issues Trust Deed – the document which shows that you are a real beneficial owner of the company. This document is registered in the Inland Revenue Department in Hong Kong.

David DancerDavid Dancer replied 2 years ago

The customers will be located mainly in India, China, US, Japan, Korea and Taiwan. The business itself will also mainly take place in those countries. No customers in Hong Kong or Thailand. I will live in Bangkok, Thailand. An alternative jurisdiction for company incorporation might perhaps be Singapore? I realize that Hong Kong incorporation may mean zero profit taxes in practice, but it would see that I would have to pay tax in some jurisdiction in any case, or ..(?)

Alex MarxAlex Marx replied 2 years ago

From Hong Kong law point of view if your company has offshore status in Hong Kong you are not liable to pay taxes in other jurisdiction.
In Singapore in order to obtain offshore status you have to prove that your company is paying tax in the other country.

David DancerDavid Dancer replied 2 years ago

HK sounds better for me!

If I own a Hong Kong company, and I am resident in another jurisdiction (e.g. Thailand), how is i) dividend and ii) salary that is paid to me taxed by HK authorities?

Assume that such dividend/salary is paid out by my Hong Kong company to my personal bank account that is not in Thailand. For example my personal bank account could be in HK or Luxembourg. How would the tax situation be in these cases?

Alex MarxAlex Marx replied 2 years ago

Dear David, here is the answers:

– There is no tax on dividends in Hong Kong.

– If you are not Hong Kong resident then you do not pay salary tax in Hong Kong. Salary has to be paid regularly – once a month or more often.

– If you are not Hong Kong resident then this question is not controlled by Hong Kong legislation. It is assumed that you pay personal income tax in the country of your tax residence.

David DancerDavid Dancer replied 2 years ago

OK thanks for clarification!

I intend to move to Bangkok, where I have bought a flat, in October 2017. I want to use that address as my residential address for the HK company incorporation and bank account procedures. Obviously, I don't have any utility bills etc from that address yet. In fact, the flat is not completed yet as it is still under construction, with expected completion in October or November, 2017.

Does this mean I can only proceed with the HK company formation after I moved to Bangkok, or can the process be started using the address of the BKK flat without me living there yet?

Alex MarxAlex Marx replied 2 years ago

The company can be incorporated using your Sweden address. Once you have proof of Thailand residential address – you can submit related form to the Companies Registry to change the records. Apart from the utility bill also the bank statement under your name and not older than 3 moths is accepted.

David DancerDavid Dancer replied 2 years ago

I prefer to use the BKK address all the way.

So it means I can not start the incorporation process until I have moved to BKK and got some utility bills, correct?

Alex MarxAlex Marx replied 2 years ago

Can you open a bank account under you Bangkok address and provide bank statement as the residential address proof instead?

David DancerDavid Dancer replied 2 years ago

I have a Thai bank account already, registered under another address in Thailand (which is also a flat belonging to me). However, I don’t have any bank statements, and there is no address info in the online banking system. It seems I have to wait until I move to BKK.

Alex MarxAlex Marx replied 2 years ago

If you are in Thailand now you can visit your bank and request to issue a reference letter which would state your name and address.

David DancerDavid Dancer replied 2 years ago

Your website states that I need “Copies of contracts and invoices of any company, signed by the beneficiary, in order to show that the account holder has experiences in doing business…” in order to open a bank account. But I don’t own any business. The one I want to incorporate in HK is my first ever business. Seems like a chicken/egg situation…?

Alex MarxAlex Marx replied 2 years ago

Do you have any experience in advising regarding to the Intellectual Property Rights? As an option you can provide the documents and contracts of some other company and appointment letter under your name signed by its director. The director will also have to provide a certified true copy of his/her passport + signature.

David DancerDavid Dancer replied 2 years ago

I have never owned my own company, always worked for a corporate, as an employee. Are you saying that it is only possible to start a company in Hong Kong if I have already had a company before…?!?!

Alex MarxAlex Marx replied 2 years ago

The banks require to provide the contracts either signed by you or signed by the other person who authorize you to develop his business in Hong Kong.
In other words the bank needs to see that you have an experience in the same business field.

Can you provide purchase and sales contracts of the company you work now for?

David DancerDavid Dancer replied 2 years ago

I have tremendous experience in the same business field. In fact, I am a world expert in my field. But I have never had my own company. I worked and still work for the biggest telecom equipment company in the world.

I will quit working on Aug 31, 2018. You are now telling me that it is impossible for ANYBODY to ever start a first company in Hong Kong !!(?) What you say is IMPOSSIBLE. What would the Hong Kong citizens say if nobody was ever allowed to start a company for the first time in their life…? Nobody would want to live there, for sure.

Kindly clarify this absurdity ASAP.

Alex MarxAlex Marx replied 2 years ago

The rules to provide with the proof of business were not created by me. These are the standard requirements of the banks in Hong Kong. We can only advise to be prepared to provide bank with all necessary documents in order to achieve the goal.

Also we can suggest firstly to open a bank account for your HK company somewhere not in Hong Kong, and after you commenced the business come to Hong Kong and show the tried-and-tested proof of business. Hong Kong residents have the privileges for sure, and the banks do not ask them to provide with the supporting documents.

Please let me know if you need any clarification or help.

David DancerDavid Dancer replied 2 years ago

I understand that the rules for bank account opening were not created by you. If I use my current Sweden residential address, do I still have to provide business proof?

Alex MarxAlex Marx replied 2 years ago

There is a high risk that a bank officer during a bank meeting would request to provide with some supporting documents as business proof. That’s why we are all the time advising our clients to be prepared.

According to the bank procedure the case of the bank account opening is revising by several internal parties. Even through the interviewer would not ask any additional questions, they can be rose later by the different department.

If you would like to give it a try we are ready to book for you a bank meeting and assist you during the interview.

Please let me know about your decision.

David DancerDavid Dancer replied 2 years ago

Ok thanks! I just published another question about Hong Kong bank account opening for non-HK resident – http://obfaq.com/question/hong-kong-banks/opening-a-business-bank-account-in-hong-kong-as-a-non-hk-resident/

Please provide an answer for it.

Alex MarxAlex Marx replied 2 years ago

Replied, cheers!

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