China and the Far-East in general have now become the centre of World Commerce and effective investment and trading strategies are now absolutely vital for many businesses – In the case of the SCF Group not only have we ensured that we have management and control facilities available in Hong Kong, Malaysia and Singapore but we have also ensured that we have fluent Mandarin (Chinese) speakers available at our London office.
Lower Taxes, Less Bureaucracy and a Pro-Business Environment
There is little doubt that the Far-East offers UK and other Western investors/traders unparalleled benefits but in many cases in order to fully benefit it is necessary to establish managed companies and/or warehouse facilities in the region. In fact, not to do so could create avoidable barriers to trade and expose Western companies to unnecessary taxation back in the UK and/or Mainland Europe. The managed company jurisdictions favoured by the SCF Group include:
The Chinese autonomous region of Hong Kong offers investors absolutely unique benefits including low corporate taxes of no more than 16%, access to the World’s largest industrial base in Mainland China and a ‘territorial’ tax system which means that in reality most companies pay only a fraction of the full 16% corporate tax rate since earnings from business carried out outside of Hong Kong are not taxable. In addition, Hong Kong has taken measures to ensure that it is not seen as a de facto tax haven or offshore centre and has recently entered into numerous double taxation treaties to copper fasten its position as a tax planning jurisdiction although it should be noted that at the time of writing there was still no tax treaty with the United States. The above combined with the fact that Hong Kong kept the British legal and company law systems’ means that it is one of the best places from which to base Far-Eastern business.
Not as well-known as Hong Kong but offering many similar incentives to international investors and/or traders including the very useful possibility of paying an annual set duty in lieu of corporate taxes (this being 20,000 ringgit or approximately €4,500.00) which, if paid, also excludes a company from submitting annual public accounts. Notwithstanding this, the autonomous region of Labuan in Malaysia fully benefits from the respectability of Malaysia and perhaps equally importantly from its double taxation treaty network with almost all treaty partner countries.
Singapore is undoubtedly the most advanced Far-Eastern economy together with Japan and perhaps Hong Kong and South Korea. As with Hong Kong it enjoys a territorial tax system but is generally more expensive to operate from than Hong Kong due to higher operating costs and the requirement to have a fiscally resident local (normally a lawyer or accountant) secretary/director. Nonetheless, the inherent stability of Singapore, lack of corruption and Swiss like reputation make it a very attractive location for foreign investment/trading activities.
For more information on these benefits please contact one of our tax planning consultants.