Globalisation in Asia – Singapore and Hong Kong
Asia remains relatively insulated from the global economic slowdown and Asian growth, powered by China, has become the major driver for the global economy. In 2010, East Asia and the Pacific grew at twice the pace (6.8%) of both the EU (2.0%) and US (3%). With the EU and US stagnating, investors and businesses are naturally heading East.
In Asia, Singapore and Hong Kong present the simplest, most viable and most lucrative options for firms, investors and entrepreneurs seeking growth. With a government renowned for efficiency and transparency, unparalleled infrastructure and a location at the heart of South East Asia, Singapore provides the ideal setting to incorporate in. While Hong Kong, with its developed and liquid financial markets and attractive tax policy, can act as the perfect gateway into China’s growing markets.
Hong Kong company registration and Singapore incorporation is remarkably safe, cheap and quick. Singapore is the easiest place to do business and has topped the World Bank’s Ease of Doing Business rankings for the last 2 years. Singapore also fares exceptionally well in other measures like paying taxes (4th best in the world), starting a new business (4th best) and trading across borders (1st). Foreign investment and firms are a significant part of the Singapore economy, for instance in 2010, output from foreign companies and foreigners accounted for 43% of GDP in 2010 and grew by 13.6%. With such a substantial foreign presence in the economy, we do not foresee the government introducing any major restriction. This combined with improving infrastructure and steady growth means that Singapore will remain a premier jurisdiction for firms and entrepreneurs for a long time.
After Singapore, Hong Kong is the easiest place to do business and ranks highly in other measures like protecting investors (3rd), paying taxes (3rd) and starting a business (5th). Firms continue to be incorporated in these 2 cities despite global economic uncertainty. For instance, 798 foreign businesses chose Hong Kong as their jurisdiction of registration in 2011, an increase of 8.3% from 2011. Over the last year Hong Kong has introduced online electronic services for company and business registration making the process even simpler. The Chinese government has shown signs of trying to attract more foreign investment especially through Hong Kong. Hong Kong can also act as an important hub for firms who want to operate in other major economies in the region like South Korea, Japan and Taiwan.
The recently released Ernst & Young Globalisation Index is another international survey that shows the strength of Hong Kong and Singapore as global centres of business. The survey ranks these two Asian hubs as 1st and 3rd respectively. The good thing about this survey is how it considers different aspects of the jurisdiction. The overall rankings score is determined from analysing the 5 areas of trade, technology, capital, labour and culture. Singapore actually scored a perfect 10 for the openness to trade category.
Healy Consultants blog
Offshore Investing – Why Is It Underutilised?
There are many stigmas attached to the ideas of international, or offshore corporate bank accounts, as well as offshore companies. Basically, this refers to the practice of investing assets or setting up a company in a jurisdiction other than your place of residence, hence the term ‘offshore’. The truth is that offshore banking and offshore company formation are legitimate strategies if done correctly in respect to the laws of the investment jurisdiction and laws of person’s, or company’s, resident jurisdiction.
Unfortunately what most people see are stories in the media about cases in which these financial tools have been misused for things such as tax evasion and money laundering, and so the result is a perception that these strategies are not an option. Without international markets, the majority of businesses today would not exist. Globalisation and technology means international business operations are not just for large multinational companies. Entrepreneurs and small business can just as easily take advantage of offshore opportunities to maximise efficiencies.
Continue reading more about some of the reasons why investing offshore is often underutilized.....
Healy Consultants blog
The Fight Against Improper Use Of Offshore Banking
The United States Internal Revenue Service (IRS) is again starting a ‘voluntary disclosure program’ intended to reveal hidden offshore bank accounts and assets. Those who chose to participate in the program will be asked to pay as much as 27.5% in taxes. Interesting that the tax rate has increased from 22.5% in 2009 to 25% in 2011 and now the 27.5%.
On the previous occasions, the program yielded US$3.9 billion and US$1 billion, respectively, with more than 33,000 disclosures being made.
The program is part of the IRS’s ongoing efforts to reduce and prevent tax evasion. The government agency has also prosecuted clients of banks and financial institutions such as UBS and HSBC, and charged bankers and advisors who helped clients conceal their assets.
This program of fighting tax evasion is not new and is also a goal of the Organisation for Economic Cooperation and Development (OECD). The OECD promotes policies aimed at being universally recognized and implemented globally and hence contribute to improvements in fairness and social wellbeing of people around the world.
One such policy is related to the disclosure of financial and bank account information. The OECD has been successful in encouraging jurisdictions around the world to agree to implement the internationally recognized guidelines for disclosure of information related to financial accounts. Due to their efforts, there are now no jurisdictions on the OECD ‘black list’ that once included a number of traditional tax haven markets.
Despite the publicity gained through such initiatives by the OECD and the US government, illegal activity via the use of offshore banking and offshore companies is few and far between. The practice of setting up offshore bank accounts and offshore company registration is not illegal. If structured properly and all laws of the home jurisdiction as well as the jurisdiction where the account/company is set up are followed, offshore investment strategies can be an effective way to grow personal assets and expand business operations.
More information about offshore incorporation and offshore banking can be found on Healy Consultants website. Or send us an email with some details about your business and investments to see how our firm can assist.
Healy Consultants blog
Offshore Companies: The Good, The Bad, and The Ugly
The good: legally minimise taxes and protect assets
Anybody can incorporate a business. In our world today, both free and guarded economies alike permit foreign nationals to create businesses and commercial opportunities on their shores.
There is nothing wrong or illicit about owning and running a business abroad, or ‘offshore’. On the contrary, it’s an admirable accomplishment. A person who imports furniture from Asia to sell to European stores is really no different than Coca-Cola selling soft drinks on each continent; and no different from a consultant, who works with clients around the world. What they all have in common is offshore companies and international banking.
For companies large and small, tax planning strategies are necessary part of achieving business objectives. The practice of legal tax minimisation (not to be confused with tax evasion) allows a company to legitimately decide to save its money on taxes. As businesses grow, so do tax obligations, which impede entities from reinvesting, expanding, and growing at the best rate possible. A tax planning strategy that legally minimises taxes is one of the best means to help a global business flourish.
The Bad: Worldwide Taxation and Evasion
But abuse of these advantages has given these practices undeserved reputations. Evading or escaping taxes is not a condoned practice, and carries with it severe penalties and terms, such as payment of back taxes, confiscation of assets and imprisonment. Here stems the notorious reputation of offshore finances: traditional tax havens such as the British Virgin Islands (BVI), Bermuda, and several others. In our professional opinion, traditional ‘tax haven’ jurisdictions and their negative stigmas provide no future for offshore companies.
The optimal solution for any business is to strategise around reputable jurisdictions tax systems and ensure all legal obligations are fulfilled, legitimately.
The Ugly: A Few Bad Apples Bring Stricter Regulations For All
For offshore investing and business operations, extreme examples have come to be seen as the norm, abounding with stereotypes and misconceptions. Extreme cases include vastly wealthy individuals or businesses that failing to declare their full tax obligations. This does not represent the main constituency of active offshore finances. The fact is, a high number of SMEs are incorporated in an offshore jurisdiction and transact their business through offshore bank accounts. This is perfectly legal, and not the stuff of legal cases.
Recently, national governments have pursued tax evaders with growing aggression. Take for example the U.S. and the U.K. It is an effect of global recession; there is cause to collect what is rightfully owed for tax obligations. Information exchanges between countries, revealing account holder’s personal details, even from private banks may seem an invasion of privacy but is part of global efforts between the OECD and tax authorities to fight illegal practices. A vivid example would be any person living in politically unstable jurisdictions, where it is legal to confiscate a person’s assets without sanctions. This obliterates security and privacy of many innocent parties who have compelling reasons to seek anonymity, security and protection of one’s assets.
While there may be an ugly side to offshore company incorporation, and offshore banking, these are legitimate business strategies that allow a business to expand and take advantage of international opportunities, improve operational efficiencies and maximise financial position and asset protection. If considering setting up an offshore company, engaging the services of an experienced corporate services consultant is one effective way to help ensure the process goes smoothly and all legal obligations are considered.
Healy Consultants blog
Offshore Company Options in the Middle East
The Middle East region has attracted significant investment, especially Dubai over the last 10 years or so. There are great 'before & after' images circulating around the web that show Dubai before the huge boom in construction. As Dubai has matured there is greater diversity of industry sectors that contribute to the jurisdictions economic output.
As one of the seven emirates that forms the United Arab Emirates (or UAE), Dubai has been taking the lead in attracting foreign investment to this region. For entrepreneurs looking to undertake offshore company registration, Dubai and the greater UAE region, can be an effective choice.
Apart from Dubai, company formation in the UAE can be completed in other emirates including Abu Dhabi, Sharjah and Ras Al Khaimah all offer effective solutions as a hub for international business. Free zones are a popular choice for foreigners looking to set up an offshore company. These are specific areas with the Emirates set up to cater to a particular economic sector and provide international investors with incentives such as tax exemptions.
A common misconception is that incorporating your business in the Middle East requires an association with the oil & gas industry. This is certainly not the case. While it is an crucial sector of their economies, jurisdictions in this region have diversified economies and provide businesses numerous opportunities to prosper. Whether your objective is to operate within the middle east region or find a suitable jurisdiction to base an international business operation from, the UAE can be an effective choice.
A Dubai offshore company is a popular choice and is a jurisdiction that our firm believes will continue to develop. Find out more information about company incorporation from our business website, or send us an email to email@healyconsultants.com