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Distinction between offshore and onshore operations of Hong Kong companies

Released Date: Sep 18,2021 Article Source: HUANZE

The characteristics of the offshore operations of Hong Kong companies are that they do not occupy Hong Kong resources, that is, the company has no staff working in Hong Kong, employs no Hong Kong employees, and the shareholders and directors are not Hong Kong people; Neither the seller nor the buyer of the Hong Kong company is in Hong Kong (ie, both sides are out); The goods traded do not enter the port of Hong Kong; The transaction object is not known through Hong Kong exhibition; No borrowing, financing, etc. in Hong Kong. As long as the business meets the above conditions, you may not pay tax in Hong Kong.

The characteristics of the offshore operations of Hong Kong companies are that they do not occupy Hong Kong resources, that is, the company has no staff working in Hong Kong, employs no Hong Kong employees, and the shareholders and directors are not Hong Kong people; Neither the seller nor the buyer of the Hong Kong company is in Hong Kong (ie, both sides are out); The goods traded do not enter the port of Hong Kong; The transaction object is not known through Hong Kong exhibition; No borrowing, financing, etc. in Hong Kong. As long as the business meets the above conditions, you may not pay tax in Hong Kong.

The onshore business of Hong Kong companies is the opposite of the offshore business. As long as it occupies Hong Kong's resources, it belongs to the onshore business. Then you need to pay profits tax in Hong Kong.

In addition, if a Hong Kong company is engaged in both offshore business and onshore business, it should be distinguished according to the proportion of the company's business: if the proportion of onshore business exceeds the total turnover of the company49%The Hong Kong company is taxed both onshore and offshore; If the proportion of onshore business is less than49%The onshore part is subject to profits tax, while the offshore part is exempt from profits tax.

Distinction between offshore and onshore operations of Hong Kong companies

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