Other Possibilities
In addition to the planning opportunities outlined above which affect international operations, there are other areas where planning possibilities exists for operations in Hong Kong. The following is a synopsis:
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structuring tax efficient employee compensation packages and pension plans;
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maximizing claims for tax depreciation on capital expenditure on plant, machinery and buildings;
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maximizing claims for expenditure deduction; and deferring tax on income.
Hong Kong’s international reputation as a trading nation also enhances its possibilities for tax planning purposes. The fact that it is the eleventh largest economy in the world and has the second largest trading port makes it a logical jurisdiction to use in connection with any transactions in the Far East.
There is considerable wealth in Hong Kong; some of the world’s acknowledged wealthiest billionaires live here. Consequently, where an investor wishes to use an Asian entity for the acquisition of work of art, real property or shares, a Hong Kong company would be a suitable nominee for this purpose.
At the moment it is still possible to open bank accounts in Hong Kong for companies incorporated in Hong Kong or other jurisdictions without disclosing the name of the beneficial owner. However, there are serious penalties for dealing in transactions involving funds which have a drug related source and we would need to be satisfied that any account opened by LMSL was not connected in any way, under any circumstance, with such activities.
The matters set forth in this paper are only meant to be a brief summary of the revenue laws affecting Hong Kong entities. The specific details of any particular case should be considered before applying these general principles.