Question Hong Kong or Dubai offshore companies do they need an accountant?

[bogdy23]

Hy,
Quick question I have heard about this for some companies but not all of them. A Hong Kong-based offshore or a Dubai one. Do they ask for accounting do they need an accountant? Or just pay the annual fees and you are all good to go?
Thanks

 

[Fred]

Hi,

I can only speak for Dubai. You only have to pay the yearly renewal fees and you are all good. You are only forced to keep your documents but nobody wants to audit you on a regular basis.

Please keep in mind you asked about offshore - beside of that you have in Dubai Freezone and Mainland. All have different requirements and in the common sense the people are interested in the UAE start mixing up everything.

 

[For Free]

Hy,
Quick question I have heard about this for some companies but not all of them. A Hong Kong-based offshore or a Dubai one. Do they ask for accounting do they need an accountant? Or just pay the annual fees and you are all good to go?
Thanks

- HongKong is not really offshore and very difficult to obtain offshore status. In any case, you need to do audit annually. Bank account is hard to open
- UAE have LLC (you can own 49% maximum) and FreeZone (you can own 100% company). With Freezone formation, there is no need accountant/auditor but it is difficult to open the first bank account

 

[Fred]

- HongKong is not really offshore and very difficult to obtain offshore status. In any case, you need to do audit annually. Bank account is hard to open
- UAE have LLC (you can own 49% maximum) and FreeZone (you can own 100% company). With Freezone formation, there is no need accountant/auditor but it is difficult to open the first bank account

Well said. For the UAE you should go with Dubai license and avoid small emirates + get someone that know how to work with the local banks.

 

[Siggi]

- HongKong is not really offshore and very difficult to obtain offshore status. In any case, you need to do audit annually. Bank account is hard to open

Its a long process but not difficult. You can get bank accounts for HK company with Paysera, Neat and Currenxie without a problem. Thats only 3 and there are more options. Bank account is def not hard to open with EMIs

 

[bogdy23]

Hello, you guys first of all thanks for all of your help. So in Dubai, I don`t need an accountant and don`t need to record my actions which is great. But the taxes for such a company are high 7000 euros. I saw Hong Kong cheaper 3000 euros. But I`m still not clear do you need there an accountant or not? Can you get away with one. Also, If I do dropship business but with Mainland China do I need to pay 17% taxes or whatever for everything I purchase from China and sell in the US? I live in Romania if I wait for a few months to actually have the 7000 euro to start a Dubai company but still conduct business would I get in trouble. Will I have to pay taxes for that?

 

[Fred]

Hello, you guys first of all thanks for all of your help. So in Dubai, I don`t need an accountant and don`t need to record my actions which is great. But the taxes for such a company are high 7000 euros. I saw Hong Kong cheaper 3000 euros. But I`m still not clear do you need there an accountant or not? Can you get away with one. Also, If I do dropship business but with Mainland China do I need to pay 17% taxes or whatever for everything I purchase from China and sell in the US? I live in Romania if I wait for a few months to actually have the 7000 euro to start a Dubai company but still conduct business would I get in trouble. Will I have to pay taxes for that?

Dear bogdy,

for the Hong Kong company with a physical bank account and the tax exemtption the fees will be even higher.

Don't forget that it's really difficult situation in Hong Kong currently and on the one side the banks there forces you to create substance but on the other side this substance leads to the tax liability in HK.

Furthermore in HK you don't get that easy a residence and without the residence in HK the banks there will report under CRS to romania.

 

[Siggi]

The cheapest and easiest solution for Dropshipping will be using a US LLC or when selling to the US it will be safier to use an UK LLP. Dubai doenst make any sense in this case!

Keep in mind that staying in Romania might get you in trouble when operating offshore companies without declaring profits. You need to clarify this before or relocate to tax-friendly countries.

 

[bogdy23]

The cheapest and easiest solution for Dropshipping will be using a US LLC or when selling to the US it will be safier to use an UK LLP. Dubai doenst make any sense in this case!

Keep in mind that staying in Romania might get you in trouble when operating offshore companies without declaring profits. You need to clarify this before or relocate to tax-friendly countries.

Relocate as in move my a*s to another country? I`ve been talking to a guy who ranks well on google as a company that does offshore. Apparently, you can do it why sitting in Romania. You just don`t have to any of the design work, the product shipping, or FOREX trading in Romania. Since the broker servers are mostly located in Holland and the UK. They are not liable for getting taxed in Romania. He said he will give me this in writing.

 

[Siggi]

Yes you have to check CFC Rules in Romania.

 

[fbsworld]

Hi,
- In HK, audit (so accounting) is mandatory, see https://www.cr.gov.hk/en/companies_ordinance/faq_account-audit.htm#11
- In UAE, a Federal law says it audit (so accounting) is mandatory. Sometimes some Free-zone Registries does not ask it but it is in all case mandatory. Do not forget there is VAT now in UAE and it states that you must keep financial statement in case of VAT control.

 

[Fred]

The cheapest and easiest solution for Dropshipping will be using a US LLC or when selling to the US it will be safier to use an UK LLP. Dubai doenst make any sense in this case!

Keep in mind that staying in Romania might get you in trouble when operating offshore companies without declaring profits. You need to clarify this before or relocate to tax-friendly countries.

US LLC doesn't give you a tax residence.

It can be used as additional layer to satisfy the merchants as you say US LLC or our personal recommendation we already mentioned in other threads - UK LLP. Both don't give you tax residence - if you open them with your current residence in Romania - Romania will receive your financial statements from the banks outside.

UAE give you a tax residence. With this residence you open the local UAE bank account. The banks consider you as a resident and therefore no reporting under CRS will happen to Romania.

No matter if you physical live here the whole year or just keep your like you say "a*s" in Romania doesn't make any difference as your bank accounts are opened with the UAE residence and no public company records in UAE as well.

CFC rules are in place in Romania since 2017. If you keep staying in Romania and don't get a tax residence somewhere else - Romania will consider a HK company for example like a local company in Romania and you have to pay the tax.

 

[lory]

It looks like Dubai company formation is the better choice compared to Hong Kong, I still have a issue to let my money stay in any of these countries. It will be unpredictable the future, Hong Kong could block all foreigners money just like that, the same could happen in the UAE if they can't pump more oil up soon and have to get their insane big constructions financed.

The world is changing, I just say.

 

[Fred]

It looks like Dubai company formation is the better choice compared to Hong Kong, I still have a issue to let my money stay in any of these countries. It will be unpredictable the future, Hong Kong could block all foreigners money just like that, the same could happen in the UAE if they can't pump more oil up soon and have to get their insane big constructions financed.

The world is changing, I just say.

That's right - things changing fast.

Through the DIFC (Dubai Financial Centre) you have access to most foreign banks. But as OECD pressure is increasing yearly - the minimum relationship balances increasing yearly and only investment banking.

For transactional banking there are few Switzerland banks left that even open business bank account for Dubai company - requirements there increasing yearly as well.

 

[Siggi]

UAE give you a tax residence. With this residence you open the local UAE bank account. The banks consider you as a resident and therefore no reporting under CRS will happen to Romania.

No matter if you physical live here the whole year or just keep your like you say "a*s" in Romania doesn't make any difference as your bank accounts are opened with the UAE residence and no public company records in UAE as well.

Seriously? Are you advising tax evasion here? Because that what is actually happening if you dont report Dubai profits while staying in Romania the whole year. The fact that Dubai is not reporting anything doesn't change the fact that you are actually doing tax evasion. Whoever is having such a stupid setup should be aware of the consequences that might someday hit them!

 

[Siggi]

It looks like Dubai company formation is the better choice compared to Hong Kong, I still have a issue to let my money stay in any of these countries. It will be unpredictable the future, Hong Kong could block all foreigners money just like that, the same could happen in the UAE if they can't pump more oil up soon and have to get their insane big constructions financed.

The world is changing, I just say.

There is no bank in the world where your money is safe anyways. There is no point in holding cash reserves in the bank that you actually don't need. Cash is trash not matter where you are!

 

[JackAlabama]

Seriously? Are you advising tax evasion here? Because that what is actually happening if you dont report Dubai profits while staying in Romania the whole year. The fact that Dubai is not reporting anything doesn't change the fact that you are actually doing tax evasion. Whoever is having such a stupid setup should be aware of the consequences that might someday hit them!

He did not advise what you accuse him of doing. He was just stating facts how this works.
Basically in todays world you need open accounts as resident as most banks will not do it otherwise unless you have serious coin to drop.

 

[Fred]

Seriously? Are you advising tax evasion here? Because that what is actually happening if you dont report Dubai profits while staying in Romania the whole year. The fact that Dubai is not reporting anything doesn't change the fact that you are actually doing tax evasion. Whoever is having such a stupid setup should be aware of the consequences that might someday hit them!

Of course not.

You always have to move and relocate - especially if you are residing in the EU.

The questions was between HK and UAE - so I mentioned the differences and how it's working in UAE.

If someone use this information to do tax evasion it's in his own hands and as always in live - you can do whatever you want if you can live with the consequences.

@JackAlabama - well said - that's it.

One more thing I want to point out here - we receive many requests about the digital nomad lifestyle and how it's going to work- we always say it's working unless it comes to banks. No real bank ever will onboard you stating you are a digital nomad living today here and maybe tomorrow there. With the mentioned UAE setup here they have at least the possibility to get real bank accounts and invetsment vehicles for stocks etc. with the minimum requirement of staying 24 hours in UAE every 180 days.

As most of the so called digital nomads just use the Revolut or TransferWise they used back in the home country without changing the address they relay on the goodwill of this EMI's and have to deal with account closures from one day to the other day and no one really want to hold 7 or even 6 figures in such accounts.

 

[Siggi]

If someone use this information to do tax evasion it's in his own hands and as always in live - you can do whatever you want if you can live with the consequences.

I do 100% agree. Ethically speaking Id just expect someone to make these potential consequences very clear when explaining such possibilities to total newbies.

 

[Fred]

I do 100% agree. Ethically speaking Id just expect someone to make these potential consequences very clear when explaining such possibilities to total newbies.

I get your point and totally agree. Especially in this case mentioned here and how the OP want to handle it - with HK setup and sitting in romania - it will be a straight punch into the face from the tax authorities.