Buy an offshore IT company in Hong Kong in 2023
Buying an offshore company in Hong Kong for IT is profitable. Local startups are actively developing. Last year more than 4,000 companies were working there, and the number is expected to increase in 2023. Buying a ready-made IT business not only allows you to get started right away, but it is also faster and more profitable to enter into business contracts than if investors decide to open a new LLC.
Why it's better to buy a ready-made IT company in Hong Kong
Hong Kong is attractive for IT businesses in a variety of sectors. Fintech comes first, followed by e-commerce, supply chain management, and logistics. In addition, the pandemic has stimulated the development of IT companies that work in education, biotechnology, health and medicine. Therefore, one can easily buy a business within the needed area of specialization.
The main advantage of a ready-made IT company is that there is no need to go through registration. Therefore, it allows you to start working immediately and avoid many bureaucratic procedures. In addition, a ready-made company has a history because it was registered some time ago (the more, the better). Therefore it has more credibility than a business created from scratch, both for clients and partners.
Buying a ready-made business for IT activities in Hong Kong is also beneficial if you plan to take a loan. Under the Companies Act in Hong Kong, loans are granted only if the business has evidence of its corporate history. For example, if an investor needs a loan to buy computers, they must prove that their company was founded more than six months ago. Buying a ready-made business that has existed for more than six months solves this issue.
What you need to know about taxes
Hong Kong is famous for its simple tax system and favorable rates:
- Corporate tax is 8.25 percent on the first $2 million Hong Kong dollars.
- No capital gains tax and no VAT.
- Stamp duty on the transfer of Hong Kong shares - 0.2% of their value.
- The employer pays a social security contribution of 5% of employee wages.
Any company in Hong Kong must file an annual tax return and some other documents. If they do not do this, they will receive a fine. It is also essential to know that the company's new owner is responsible for compliance with tax and regulatory requirements. You can hire a specialist to keep track of these points.
Buying a business in Hong Kong: the main points
Before you buy an offshore in Hong Kong, you should do due diligence. It will help you avoid surprises such as dark credit history, unfulfilled obligations, etc. The advantage is that the foreigner can fully own the company. It means that you do not have to look for a local partner.
It is best to buy a legal entity registered as an LLC. The purchase procedure takes 2-3 business days, not counting the time taken for due diligence. It is desirable to buy a company with a corporate bank account to save time on its opening, which can take several months.
During an IT business purchase, it is sufficient to show identity documents. Changes need to be registered at the Hong Kong Company Registry. The procedure is fast, taking one or two days. It is necessary to submit an amended Charter with information about the new owner an application, and a paid registration fee.
After the purchase of the business, the new owner may:
- change the name of the company;
- appoint new directors;
- increase the amount of capital;
- change the registered address;
- add additional items of business;
- make other changes.
At the final stage, the new owner must re-register the bank account. For this purpose it is necessary to come to the bank, sign the documents, and provide specimen signatures.
How to buy an offshore company in Hong Kong
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