Статья посвящена Гонконгу как популярной офшорной юрисдикции. В публикации описываются условия работы офшорных компаний и преимущества, которые они получают в Гонконге, в частности, в области налогообложения (бремя налогов в Гонконге третье по легкости в мире) и конфиденциальности владения капиталом. Легкость инкорпорации, незначительный уровень расходов по содержанию компании и развитый рынок услуг провайдеров офшорного сервиса – все это также является преимуществами Гонконга. Фондовая биржа Гонконга крупнейшая в мире, причем автор выражает сожаление по поводу того, что фондовые бумаги украинских компаний не продаются на этой бирже.
When someone says the world offshore, most automatically think of Cyprus, due to the historic business connection between Ukraine and Cyprus. However, going beyond that, people with out a legal background will unlikely come up with anything other than the British Virgin or Cayman Islands. However, choosing an offshore (or onshore) jurisdiction is something that any entrepreneur will have to deal with in the modern economic world sooner or later. While at first glance, the structure of some of the leading European companies is more or less clear, with many choosing Switzerland or the Netherlands as the main holding companies many, in fact, try to create offshore structures with as little public disclosure as possible. It has been calculated that the world’s super rich have hidden in tax havens between USD 21 trillion and USD 32 trillion of wealth by the end of 2010, which were spread between Switzerland, the Cayman Islands, Luxembourg, Hong Kong and Singapore as the most likely destinations. In Ukraine (and in any post-Soviet country). the tendency has not changed much over the last 10 years and entrepreneurs tend to choose incorporation from the whole list of jurisdictions, from the most common ones such as BVI, Cyprus, the Netherlands and Cayman Islands to Jersey, Mauritius, Seychelles, Isle of Man, Guernsey, Dubai and even New Zealand in some cases.
General overview
The choice of the jurisdiction sometimes proves to be a trouble some process as the prospective beneficial owners need to make a choice based on how and by what means they want to operate the company. There are four main reasons why such beneficial owners contemplate the incorporation of the offshore company:
1. Optimization of tax schemes (in order to legally pay less tax on dividends, royalty, etc.);
2. Optimization of the trading structure of the company;
3. Establishment of a holding company; and
4. Possible plan on the initial public offering.
In recent years, the tendency has seen the Netherlands grow rapidly as one of the more popular jurisdictions, as it was considered to be in the European Union and still have many taxation and management benefits available to prospective clients. This has changed now though because Dutch legislation is tightening up and establishing more regula tions in order to be in compliance with EU directives. thus chang ing the outlook and perception of the Dutch system.
When choosing the jurisdic tion, it is also important to con sider many legal and practical aspects, such as whether it is necessary to a have real office and consequently employees in the jurisdiction of the potential offshore company, whether the offshore jurisdiction has a treaty with Ukraine on avoidance of double taxation (here, the Cyprus always wins hands down), whether respective customs stamps being placed and whether the corpo rate governance is suitable to the needs of the beneficial owners. It is also important to consider that the f acilitation of the “know your client” procedure may be an important factor in the fu ture, since sometimes it may be tricky.
While it is true that standard offshore structures such as Cyprus and BVI are the easiest to work with and will most likely remain leaders in the market for the foreseeable future, it is important to consider new ways how the offshore companies may work for beneficial owners and discover new possibilities available in the business world.
Go East
The new and emerging markets in Europe and Asia had not gone unnoticed to the Asian financial centers prior to the recession of 2008. It was, therefore, a smart move by the Chinese government to support international efforts to enhance tax transparency in order to at tract financial resources and to increase the popularity of Hong Kong as a tax harbor jurisdiction. Hong Kong is now a well-known major international center, which is located on the South East Coast of China and became part of China on 1 July 1997. It is a Special Administration Re gion within the People’s Republic of China with its own legislature and courts. English and Chinese are the official languages and what is important, the incor poration documents may be in either language or both.
Up till 2001 no comprehensive double taxation treaties were signed between Hong Kong and other countries. Remarkably, 11 years later, as of September 2012, comprehensive double taxation avoidance treaties had been concluded between Hong Kong and the following countries: Austria, Belgium, Brunei, Czech Re public, France, Hungary, lndonesia, Ireland, Japan, Liechtenstein, Lux embourg, Mainland China, Malta, Netherlands, New Zealand, Portugal, Spain, Thailand, the UK and Vietnam. Moreover, awaiting rati fication are treaties with Austria, Jersey, Kuwait, Malaysia, Mexico and Switzerland. There are even more double taxation agreements regarding aviation and shipping income with a number of different other countries.
In practice the Hong Kong jurisdiction is not exactly an off shore, definitely not in a stand ard way. In other words, all of the companies in Hong Kong are set up under the same legislation, no matter whether they perform their businesses locally or offshore. One of the features that make companies akin to offshore businesses is the tax free status of business that, upon the following conditions is not taxable under Hong Kong laws:
– The company must not trade in Hong Kong;
– The income must not arise from trade in Hong Kong; and
– The income must arise in or be derived outside Hong Kong.
Pros
Hong Kong is one of the most leading business, financial, and trading centers in the world. Re garded as the gateway to China, Hong Kong is a special adminis tra tive region of the country.
Due to its strategic location and other factors such as sophisticated infrastructure, low tax rate, and attractive govemmental policies, Hong Kong has now become a centre for internation al trade. Indeed, Hong Kong is regarded as an excellent jurisdiction for conducting both onshore and offshore businesses. Strictly speaking, Hong Kong is not con sidered a tax haven, but it does possess a favorable tax regime, which may be effectively struc tured and managed.
According to a survey conducted by the World Bank, Hong Kong is the fourth easiest place to conduct businesses in the world.
Consequently, the advantages of using Hong Kong as jurisdiction for facilitation of the trading schemes of companies are as follows:
Ta x
Hong Kong has a simple tax system and in fact, the third lowest tax burden in the world. The maximum corporate tax is 16.5% and the maximum income tax is 15%. Besides, no sales tax, withholding tax, capital gains tax, tax on dividends and individual estate tax exist. Corporation tax is only charged on profits derived within the territory of Hong Kong, which means that, as mentioned above, as long as the activity of the incorporated company is out side Hong Kong, no corporate tax is going to be charged.
Moreover, Hong Kong is not given any tax haven stigma and is not listed on the OECD’s black or grey lists and is not part of the list of offshores of the Cabinet of Ministers of Ukraine.
Currency
Hong Kong has a fully convertible Hong Kong dollar that is separate from the Yuan. Entre preneurs can, therefore, start an offshore company in Hong Kong at very little cost.
Productivity
The official languages in Hong Kong are English and Chinese, which means that contracts writ ten, assessed and implemented in Hong Kong may be done in English without further need to translate them. The well-known Asian work ethic, efficiency and can-do attitude already have high standards in Hong Kong.
Client confidentiality
In order to keep confidenti ality, which is so important to Ukrainian entrepreneurs, the beneficial owners are able to elect nominee directors and a company secretary. Professional consulting companies, both in Ukraine and abroad do assist entrepreneurs in the formation of offshore company and are usually able to provide nominee services once the “know your client” procedure is complete.
Costs
Setting up a company in Hong Kong is not too ostly either. It is expected that incor poration would cost no more than USD 2,500 and the annual maintenance fees would not exceed USD 1,000 (depending on services requested obviously).
Cons
The main stumbling block when incorporating a company in Hong Kong is the “know your client procedure”, which is much more scrutinized than the usual procedure practice in the Netherlands, Cyprus or the BVI. Practi cally, it may look as if the Hong Kong service providers (including law firms) are very suspicious when making the contact for the first time with perspective clients, especially when it comes to the identity of the beneficial owners and the source of their income.
Not only it is quite often that the service providers request to meet the beneficial owners in person, thus making them travel all the way to Hong Kong, but the way the service providers scrutinize the source of wealth is on the borderline with ridiculousness. As an example, the beneficial owner once claimed (rightfully so) to have made his fortune as part of the royalty received from a film made by his father in the 1970s. The service providers have gone to the full extent by asking the beneficial owner to give the proof that such film exists, requested the DVD to watch it and has also asked for all the necessary legal documentation under which the entrepreneur had been receiving the royalty.
Another important con is that no treaty on avoidance of double taxation has been signed to date between Hong Kong and Ukraine, and the treaty with the Republic of China as of 18 October 1996 does not apply to the territory of Hong Kong. This proves not to be the prob lem for Ukrainian entrepreneurs since Hong Kong has such treaties in place with a whole lot of other countries listed above.
IPO in Hong Kong
Moving away from tax fa cilitation regimes and various trading schemes, it is important to note that Hong Kong is an important Stock Exchange floor in Asia. In fact, the Hong Kong Stock Exchange has already es tablished itself as one of the main IPO markets in the world. Moreover, Hong Kong with its well established regulation and corporate governance emerged as the world’s biggest exchange by market capitalization and back in 2010 alone raised USD 53.2 billion, which is almost five times more than the London Stock Exchange that year.
The majority of the companies listed on the Hong Kong Stock Exchange do so using other offshore companies, predominantly from the Cayman Islands. In order to attract businesses from new markets, the Hong Kong Stock Exchange has an approved listing of company jurisdictions to 18 countries and already includes the British Virgin Islands, Jersey and Guernsey. The principal measures for the approved jurisdictions to conform are the Hong Kong Stock Exchange requirement that shareholder protection is at least equivalent to that of a Hong Kong company. After that, the usual standards of selection are taken into account, such as reputation, the legal system, trust and company legislation, etc.
No Ukrainian companies have yet been listed in Hong Kong, but world leaders such as Samsonite, Prada, City Telecom, Lenovo and others have already completed their initial public offering there. Our neighbors from the Russian Federation have already had Rusal (through Jersey company) listed on the Hong Kong Stock Exchange and are already plan ning to complete several IPOs, with Lukoil planning a second ary Hong Kong listing next year to attract more Asian investors. Not only that, it is expected that from five to 10 different Russian companies will complete their listing in Hong Kong one way or another in the foreseeable future. Rumour has it that such a giant as EuroSibEnergo is already monitoring the situation on the Hong Kong Stock Exchange very closely.
Interestingly enough, neither Russia nor Ukraine are allowed to directly make a listing in Hong Kong as they have not made it onto the list of companies al lowed for listing. That is why, in order to complete the listing, Ukrainian and Russian compa nies are encouraged to do so us ing other offshore jurisdictions (such as BVI, Jersey or others).
The Future of HK IPO for Ukraine
The relationship between Hong Kong and Ukraine are at their very early stages and Jack any material foundation to be overly optimistic. However, the State Commission for Securities and the Stock Market in Ukraine and the Hong Kong Stock Exchange in December 2010 concluded an agreement on understanding and cooperation by signing a relevant memorandum.
Moreover, the chairman of
the State Commission for Securities and the Stock Market of Ukraine, Dmytriy Tevelev, has already expressed his opinion that the first flotation of Ukrainian companies will not happen before the end of 2012. Mr. Tevelev has also said that the Commission must develop the required normative-legal acts and has further expressed that the Asian market is the most promising one, as it has sound liquidity and arises high interest on the part of investors.
Finally…
It is highly unlikely that any IPO will happen in the foreseeable future for Ukrainian companies on the Hong Kong Stock Exchange for many reasons. The most important one is that most Ukrainian companies who contemplate an IPO eye the Warsaw Stock Exchange as the main floor, with fewer choosing the London or Frankfurt floors.
However, it is highly possible that with an overall expansion and growth of the Asian market, that Hong Kong is going to be one of the most popular jurisdictions through which companies (Ukrainian or others) will perform their trading activities, thereby improving and facilitating their tax schemes. Although geographically Hong Kong will mostly likely appeal to those situated in Russia and the Far East, there are many examples of Ukrainian companies extensively and successfully using Hong Kong to facilitate their trading schemes. It is safe to say that the Hong Kong jurisdiction is one that entrepreneurs should consider for the future.
Автор: A. GRYADUSHCHYY
Источник: Ukrainian Journal of Business Law. – 2012. – № 11. – Р. 22 – 24.