Why Offshore

Reasons

The basic reasons for businesses and individuals to establish or restructure their businesses in OFCs are:

  • Reducing tax
  • Protecting assets
  • Managing risk
  • Maintaining privacy
  • Avoiding bureaucracy
  • Reducing costs
  • Ensuring asset growth

The trend of international business corporations (IBC) in OFCs started in the 90s and gained much momentum at the turn of the century. Different jurisdictions offer different advantages and disadvantages, on which Forest can comprehensively advise its clients on a personal basis.

Recommandation

Hong Kong as a starting point
Hong Kong as a starting point

Recently, Forest has recommended that many of its corporate and private clients choose Hong Kong as a starting point for their business activities, especially if they aspire to tap into the Asian market. The reason is simple: Hong Kong is more than just an offshore center; it is a world-renowned international financial center. There are major advantages to choosing Hong Kong as the location to start your business:

  • A truly free market with no government intervention
  • Earnings outside Hong Kong and capital gains are not taxed
  • A well-developed legal system
  • An efficient and transparent government
  • A strong and mature banking system with the presence of major global banks
  • Hong Kong Stock Market with Chinese mainland shares available
  • Strong business and economic cooperation ties with China
  • Free convertible currency with exchange rate certainty for HKD
  • Strong ties with other international authorities
  • High language proficiency especially in English and Chinese (Putonghua)

Rules may change

However, the rules of the game in various jurisdictions may change drastically as a result of local political influence or major decisions by superpowers. For example, the Organisation for Economic Cooperation and Development (OECD) through its sub-division the Financial Action Task Force (FATF) has a very large influence on the direction and regulations in OFCs. Non-compliant jurisdictions can be black-listed and companies incorporated in such jurisdictions would slowly face difficulties with bank transactions, loss of clients and contracts, and so forth. The United States of America, for example, forced major banks in Switzerland to break their privacy policy with regard to their American clients. On the other hand, American banks and some OFCs under the influence of the American government would try to protect the privacy of their EU clients.

Not many providers of offshore financial solutions can offer the best solutions to their clients on a very personal basis. It is fortunate that Forest has been in this segment of business for almost 20 years. Therefore, we fully understand our clients’ needs, and how and where we can help them to achieve the best possible solutions. The best solutions depend again on what a client is trying to protect, achieve, what type of business is involved, where they intend to grow their business, what are the short- and long-term goals, whether the corporation intends to undertake an IPO, and so forth.

The offshore mechanism is very dynamic but the conclusion is simple. Go offshore because the benefits are obvious! A lot of money is available here. A lot of money is coming here. A lot of money is staying here. Many businesses, large and small, are located here. Many more new businesses will be incorporated here. Many of the best companies are going public. The opportunities are plentiful. The tax level is low to none. The level of risk is decreasing as regulations become more properly structured and implemented.

According to data reported by the Chinese Ministry of Commerce, the major source of FDI for China in year 2008 was Hong Kong (international offshore financial center), which provided the country with $41 billion, which constituted a 48% annual increase. The second largest FDI source was the British Virgin Islands (offshore financial center), which invested $15.95 billion.

In view of the current trends, if you have an eye on the global market, you should choose to start from an offshore financial center.

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