News: Substance in Hong Kong: the opportunity to conduct European business in the Asian country

The state taxation system depends on the model of economic development. This affects the desire of investors to invest their money. The Hong Kong Special Administrative Region, which applies a dual system of corporate law, having inherited the British tradition of a free market, being a wide autonomy within the borders of China.

The service of substance in Hong Kong allows you to conduct business under European rules in Asia.

Not being an offshore jurisdiction, the territory has a special type of taxation, which allows you to make a profit from any type of activity. Local laws enable you to conduct business with a high level of confidentiality that will delight anyone who does not want to display the details of his business.

What is attractive about substance in Hong Kong?

The period when the formal registration of a company was enough to manage the business in full is passing. Currently, the legislation of many countries stipulate tightening of conditions and forcing businessmen to seek new ways of tax optimization. An organization registered as a commercial entity is running a risk in case:

• it does not conduct real business, according to the statutory documents;
• management is carried out from abroad;
• it operates solely for the enjoyment of simplified tax rates in order to minimize costs;
• there are other suspicious elements.

To determine existence of these and other factors, government services can check out any company in Hong Kong. A positive answer to these questions will entail sanctions measures. Accordingly, substance in Hong Kong is the best solution to avoid such measures.

What exactly is substance (real presence) in Hong Kong?  

The real presence of a company in the territory of a country will prove to the state authorities that it has the right to operate. To this end you need to provide a number of evidence. For instance:

1. Availability of an office with furniture, office equipment, technical equipment for business management;
2. Director. In case of a Nominee, his functions must correspond to the specified position;
3. There are contracts, other documents confirming the conduct of business in the selected territory;
4. Staff having the appropriate qualifications and working in a routine mode;
5. Phone/fax via which corporate communication is carried out and correspondence is maintained;
6. Site with domain registration, e-mail;
7. Bank account indicating ongoing transactions;
8. Accounting is carried out by a competent person, reports are submitted on time. Documentation is stored in the office.

These criteria meet standard requirements and are the most common for checking. Depending on the nature of the audit, other, more detailed elements of the activity can be monitored. Submission of reports must be carried out exactly with all the requirements, as well as with the forms provided by law. If the reporting is incomplete or not compiled qualitatively, it will entail negative consequences.

Law&Trust International can carry out substance within a short time. Our lawyers will qualitatively draw up all the documents and your business will bring high profits at minimal cost.