Can I setup a Hong Kong Holding company to own the shares in a Swiss GmBH or AG ?
- Thread starter Noiq
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You want to have a look at the different threads around here about HK company formation services like NEAT and similar.
Either it is ultra expensive and useless or you setup something that won't be accepted anyway. I wonder what any Swiss lawyer or accountant will say if you come with a HK holding company without substance and tell them, this is my holding company, now go and register a Swiss AG for me.
I doubt they will clap their hands.
Either it is ultra expensive and useless or you setup something that won't be accepted anyway. I wonder what any Swiss lawyer or accountant will say if you come with a HK holding company without substance and tell them, this is my holding company, now go and register a Swiss AG for me.
I doubt they will clap their hands.
As I saw in other threads and at NEAT the creation process and accountant for HK is around $1000/$2000 year.
I run a 100% lawful business and my plan︁ was:
1 - Incorporate an AG in Switzerland with me as a shareholder.
2 -︂ Open bank accounts in CH
2 - Several months later transfer my shares of the︃ CH AG to my Holding in HK.
(My business is 100% legal)
Do you guys︄ see any issue in doing this this way?
I run a 100% lawful business and my plan︁ was:
1 - Incorporate an AG in Switzerland with me as a shareholder.
2 -︂ Open bank accounts in CH
2 - Several months later transfer my shares of the︃ CH AG to my Holding in HK.
(My business is 100% legal)
Do you guys︄ see any issue in doing this this way?
We are 3 partners, all Spanish Citizens.
Our goal is:
- each partner own his Holding company in HK.
- avoid paying taxes in our country when we withdraw dividends from the AG company.
- each partner will be able to use his holding company to be able to buy his goods and properties, etc.
Our goal is:
- each partner own his Holding company in HK.
- avoid paying taxes in our country when we withdraw dividends from the AG company.
- each partner will be able to use his holding company to be able to buy his goods and properties, etc.
Sit down with a local tax adviser. They will talk some sense into you. Your structure is weak, to say the least.
Unless you are living in a tax haven, there are zero tax savings to the proposed structure. The Swiss company pays full tax in Switzerland and the Hong Kong holding companies pay full tax (which is probably 0%) in Hong Kong. But then both companies are also tax resident where each of you live and have to pay tax there as well. So you have to invoke double taxation treaties, which would probably only be applicable in giving the Swiss taxes paid as︀ tax credit for taxes owed at home.
Unless you are living in a tax haven, there are zero tax savings to the proposed structure. The Swiss company pays full tax in Switzerland and the Hong Kong holding companies pay full tax (which is probably 0%) in Hong Kong. But then both companies are also tax resident where each of you live and have to pay tax there as well. So you have to invoke double taxation treaties, which would probably only be applicable in giving the Swiss taxes paid as︀ tax credit for taxes owed at home.
Because, unless you live in a tax haven, corporate tax residence is determined by where effective management and control are performed. The HK holding company is, for tax purposes, no different than any other company in your home jurisdiction.
Your structure is Tax Evasion 101. Those setups fall all the time as soon as the tax man comes and asks questions.
Your structure is Tax Evasion 101. Those setups fall all the time as soon as the tax man comes and asks questions.
That is not correct. Please speak with a local tax adviser before you find yourself 1-2 years from now with huge fines or worse.
It's a waste of time for tax purposes. There can be other regulatory advantages of a company being offshore: neutral grounds for︀ investors from multiple jurisdictions, asset/trademark/IP protection, safer territory, specific legal requirements, and so on.
If you have a lot of capital to play with, you can do things like set︁ up an office offshore to create proper tax residence there. Then you could maybe get︂ away with not having to pay corporate income tax locally for your offshore company and︃ instead only pay capital gains tax on dividends for example.
There is a middle-way solution︄ using professional directors. This is a popular arrangement in for example Isle of Man, Gibraltar,︅ and Cyprus. Under this arrangement, you appoint a director to control and manage the company︆ from there. This means you do not control the bank accounts of the company, sign︇ agreements, or anything like that. The professional director will act on your instructions, though, so︈ you have to manage your tax risks. For a holding company, this is easier to︉ get away with than for a trading company.
Your other problem is the Swiss company.︊ As mentioned, it's likely resident both in Switzerland and wherever the company is actually managed︋ and controlled. This is such an expensive and complicated headache I don't even want to︌ get into it. Swiss companies are almost always useless unless owned and operated from within︍ Switzerland (or as a part of large-scale, legal tax planning).
It's a waste of time for tax purposes. There can be other regulatory advantages of a company being offshore: neutral grounds for︀ investors from multiple jurisdictions, asset/trademark/IP protection, safer territory, specific legal requirements, and so on.
If you have a lot of capital to play with, you can do things like set︁ up an office offshore to create proper tax residence there. Then you could maybe get︂ away with not having to pay corporate income tax locally for your offshore company and︃ instead only pay capital gains tax on dividends for example.
There is a middle-way solution︄ using professional directors. This is a popular arrangement in for example Isle of Man, Gibraltar,︅ and Cyprus. Under this arrangement, you appoint a director to control and manage the company︆ from there. This means you do not control the bank accounts of the company, sign︇ agreements, or anything like that. The professional director will act on your instructions, though, so︈ you have to manage your tax risks. For a holding company, this is easier to︉ get away with than for a trading company.
Your other problem is the Swiss company.︊ As mentioned, it's likely resident both in Switzerland and wherever the company is actually managed︋ and controlled. This is such an expensive and complicated headache I don't even want to︌ get into it. Swiss companies are almost always useless unless owned and operated from within︍ Switzerland (or as a part of large-scale, legal tax planning).
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