Stephen M. S. Lai & Co. Warning: Don't go out and find other offshore formation services websites until you have read this, and I am sure that the information you find from here you never can get from other professional websites, I promise ! 


What is an offshore company ?

In all jurisdictions, it is absolutely impossible to find the definition of the word “offshore company” in their Company Acts or Company Ordinances or Rules. Each country has her definition of the type of companies according to her laws. You may come across a lot of words such as Llc or Inc in USA, Limited or Ltd in UK, Sarl in France, Srl in Italy, Gmbh in Germany, etc. They may classify companies in terms of local company or overseas company, group company or individual company, listed company or unlisted company, limited company or unlimited company, private company or public company, holdings company or subsidiary company. In fact, offshore company can be found only in common practice for those professionals who provide offshore services for international business. In my understanding, offshore company is a company registered in other jurisdictions in which the local authority of your country has no ruling powers. Ruling power means government cannot enact such laws to control or rule over other territory of another jurisdiction. If you find from encyclopedia, you can see that an offshore company is defined as a company which is incorporated outside the jurisdiction of its primary operations.

Why go offshore ?

Many international businessmen prefer to register an offshore company instead of registering in local companies, there are indeed some advantages. Some of which are outlined below:

a)      Tax benefits - if the business operations are arranged carefully the profits from the operations may become zero profits tax or a little profits tax.

b)      Simplified set up procedure and requirements – some offshore companies can be registered within the same day, other offshore companies may require only one person registered.

c)      Public undisclosure – some offshore companies allow public search, other offshore companies cannot get public search.

d)      Costs and the fees – some offshore companies cost a little money, only a hundred of dollars, other offshore companies may cost thousand of dollars.

e)      Reporting requirements – some offshore companies require periodic financial reports being filed, other offshore companies need not filing anything at all.

f)        Limited liabilities – almost all offshore companies are private limited company in nature, the investors who subscribe the shares of the offshore company are limited to contribute up to this amount (of the shares), and no more.

However, there are some drawbacks which must not be overlook.

a)      Financing – offshore companies are difficult to get lending from their local bankers even they are profitable or provide pledge of personal assets and personal guarantee.

b)      Opening an offshore bank account – as the public records are not available, it is difficult to open an offshore bank account. Some bankers even say that they will not open bank accounts for offshore companies.

c)      Types of business being done – offshore companies are common formed for such businesses as consulting, international trading, holding shares of other companies; but some nature of businesses are not allowed using offshore companies such as finance company, insurance compnay, trust company, etc.

Which jurisdictions are suitable for offshore companies ?

There are many jurisdictions they claim suitable for offshore companies, some are listed below:

Anguilla, Barbados, Belize, Bermuda, British Virgin Islands (BVI), Brunei, Cayman Islands, Cook Islands, Guernsey, Hong Kong, Malaysia(Labuan), Marshall Islands, Mauritius, Nevis, Samoa, Seychelles, Singapore, St.Kitts, St. Lucia, St. Vincent and the Grenadines, Switzerland, Turks & Caicos Islands, Delaware (USA), UK, Vanuatu.
 

How to choose offshore company ?

There are in fact many jurisdictions for offshore companies, some may share common features. The common features are as below:

a) Set up documents – there must have Memorandum and Articles of Associations (M & A) which write down, briefly speaking, the powers and responsibilities of directors and shareholders, and how the internal structure of the offshore company is managed and operated.

b) Certificate of incorporation (CI) – it is the document which proves the company in existence and is in a legal entity, in legal term.

c) Registered agent or secretary – it is a common requirement that an offshore company must appoint a local agent or secretary responsible for dealing with all official communications or correspondings.

d) Registered office – it is also a common requirement that an offshore company must have a registered office and informs to Companies Registry that it is a legal address to receive all official correspondings.

e) Shareholders as owners of the company – in the initial M & A and other formation documents, the shareholders will subscribe and pick up the shares of an offshore company and become the owners of the company. There status is only an investor; they will not involve the management and operations of the offshore company.

f) Directors as managers (or employees) of the compnay – in the initial M & A and other formation documents, the directors will be appointed by the shareholders to manage and run the business of the offshore company. They are not owners of the company, nor investors. They are in law employees of the company.

g) Statutory records are required to be kept - the company law or rules require the company to keep updated statutory records of internal structure of company details such as the details of shareholders and their changes, the details of directors and their changes, the details of secretary and their changes, the share capital details and their changes, etc.

h) Annual renewals - almost all jurisdictions require their offshore companies to do annual renewal of licenses or keep updated filings, either internally or externally.

All jurisdictions will share the same features listed, but we think that the following are more common, in our opinion.

Belize, British Virgin Islands, Cayman Islands, Hong Kong, Marshall Islands, Mauritius, Nevis, Samoa, Seychelles, Delaware (US) and UK.

Which ones are the best ?

Belize, British Virgin Islands, Cayman Islands, Hong Kong, Marshall Islands, Mauritius, Nevis, Samoa, Seychelles, Delaware (US) and UK share the same advantages, disadvantages, or in common features. However, we have met some cases, you might be one of them in the future, one of them is listed below in regarding to the serious problem for offshore company.

Simon Case   
 
Mr. Simon is a smart businessman. He runs international trading business. He made a lot of profits. At first, he came to Hong Kong and registered an offshore company using BVI as an offshore company and opened an offshore bank account, a couple of months later, the bank suspended his corporate bank account without a reason, but only sent a letter to him and explained that your money is suspected in our record.  The bank required Mr. Simon to prove how the money he got ? Mr. Simon came to Hong Kong and talked with the bank manager and explained that it is the money from my trading business. The bank manager asked for business proof., and said, “Do you have recorded proofs ?”. Mr. Simon explained that my business is done overseas, there is not required to keep any business record at all, my overseas agent hasn’t asked me to file accounts to BVI Companies Registry ? The bank manager said, “Sorry, I can’t help you”, you have no proof, we have to suspend your accounts until further noticed. Mr. Simon found a lawyer and suited the bank but at last got nothing. After the financial crisis, I heard from our clients that such things are now happening in other countries such as U.S.A, Western Countries, European Countries and EVEN IN such offshore islands such as BVI, Belize, , etc themselves.

Why ? ....... Are you now talking offshore gets NO benefits ? Are you asking me to register local company instead ? My own country charges me 50% profits tax ?  USA company charges higher. Even France company, UK company, Canada company, .... etc. How can I do ?

I have read a lot of offshore information, they seldom read out this serious problem, namely “How can you protect your money in offshore bank accounts from your offshore business”. Remember, if you do offshore business, it comes out only two results, good business result or bad business result. Being good business result means that a coupe of periods later your offshore bank account will have a lot of money.  How if I transfer all money to my local bank account ? Or transfer to other offshore bank accounts ? Think about it ? Is it safe ? I know that some governments rule out to their bankers that if they find significant bank movements or transactions, they are required in law to report to them. As given by international rules against money laundering or tax evasion, the local or international bankers are more cautious of the transactions of offshore bank accounts. How I can do ?

Joe Case   
 
Mr. Joe is a businessman.  Five years ago, he formed a company through a local agency.  He formed this company so as to sign up contracts with other suppliers and customers.  The business has done successfully and has been growing up and now with more than 20 staff.  Later on, because of some reasons Mr. Joe didn’t know, the local agency rose up the service fees up to US$2,000 per year, only mentioned including “government fees and our service fees.”  Because of this sharp increase, he negotiated with the agency and asked for price reduction but failed and at later decided to change agency.  He thought he can sign up some papers and get changes because he is a director and shareholder.  But surprisingly, not such a case.  The result is that he has to either pay the increased fees controlled by the local agency or give up the company and form a new company.  You may not know that when you form an offshore company, you cannot change local agency or you have to pay a huge amount of compensation before the change.  BECAUSE:
THERE IS NO SUCH LAW TO ALLOW DIRECTORS/SHAREHOLDERS TO MAKE THE CHANGE OF LOCAL AGENCY
IT IS A COMMON PRACTICE
THE LAW OR PRACTICE NEED TO PROTECT LOCAL AGENCY

There is no an issue if you don’t change the local agency.  However, if it is the case that EITHER
YOU LOST THE CONTACT DETAILS OF LOCAL AGENCY, OR
THE LOCAL ANGENCY CLOSED THE BUSINESS, OR
YOU CANNOT FIND THE LOCAL AGENCY BECAUSE THEIR CONTACTS HAD CHANGED
AND YOU HAVE USED THE OFFSHORE COMPANY TO SIGN UP IMPORTANT CONTRACTS, AGREEMENTS, ETC…. AND
NOW THE BUSINESS PARTIES NEED YOU TO SHOW TWO DOCUMENTS, FOR EXAMPLE
CERTIFICATE OF INCUMBENCY ….. the local agency signs up to certify the structure of the company such as directors, shareholders, share capital, etc.
GOOD STANDING LETTER ……… the local agency signs up to certify that the company is now in existence

CAN YOU FIND ANOTHER AGENCY TO HANDLE FO YOU ?   THE ANSWER IS ABSOLUTE NO OR UNCLEAR
The answer is unclear is that you might find an agency and because he wants to do the business with you, he might promise you first and later say “sorry” I cannot help you and recommend you to form a new company.
AS A PROFESSIONAL LIKE US, WHEN YOU READ OUR WEBSITE, I HAVE A RESPONSIBILITY TO TELL YOU THE TRUE; I DON’T THINK YOU WILL GET SO MUCH VALUABLE INFORMATION FROM OTHER PROFESSIONAL WEBSITES, THEY ONLY SHOW GENERAL INFORMATION YOU CAN GET FROM A LOT OF WEBSITES.

In Simon Case, the banker suspensed Simon's bank accounts because Simon cannot provide business proofs.  In international operations, business proofs are very important because the banker may suspect, for some reasons, your money comes from MONEY LAUNDRERING.  If you have business proofs, even over billions of dollars coming to your bank accounts, it is still allowed to use.  THE BANKER CANNOT SUSPEND YOUR BANK ACCOUNTS AT ALL.  I have read a lot of professional websites THEY ONLY SAY THE BENEFITS, FOR EXAMPLE, BVI, one of offshore jurisdictions, no need to keep any business records at all, no need accounts, nor audits, no need filing.  Please think about it. Is it good ? You must know if you register BVI, your BVI company is classified as IBC (International Business Company).  Do you know what is IBC ? IBC is an offshore company formed under the laws of offshore jurisdictions as a tax-free company which is not permitted to engage in business within the jurisdiction it is incorporated in.  Why ? Because BVI will not make laws for IBC.  So there is no law for IBC, so it is totally free. Free for tax, accounting, auditings, ..... anything at all except you need filing annually, pay government fees and agency fees anually.  However, if something happens, you cannot enfore the law Because BVI will not make laws for IBC.  Remember make laws of IBC for you to comply with and makes law of IBC for their protections.  You, as IBC, have no law for compliance with, so you are free; but the same you have no protections at all, I means legal protections.  For example, if shareholders or directors or both have disagreement with somethings, can they enfore the law in BVI ?  You, as minority shareholder, find that the majority shareholders do something good for them, can you as minority shareholders enfore the unjusics ?
Therefore, you need business proofs.  You need to keep every business records at all, bookkeepings, accounting, and even auditing and business records.  Good preparation of business documents for your company.  Who can handle, or totally reply on for you ?

In Joe case, the issue comes from practice of local agency.  You must find one professional firm who do are professional.  I means professional in terms of professional knowledge, professional practice, professional accountability, professional trustability, and professional responsibility.  

Our Firm, Stephen M. S. Lai & Co. CPA (Practising), registered under the Hong Kong Institute of Certified Public Accountants ("HKICPA"), incorporated by the Professional Accountants Ordinance, provides a wide range of professional services to clients with various sizes, ranging from individuals to large companies in Hong Kong and overseas, incorporated owners and other body incorporates. Our aim is to provide integrated solution to clients in a personal, friendly and efficient manner. Why choose us ?

Establishing strong and long standing relations with our clients is our primary objective. With us ... You have a firm providing an efficient, cost-effective and high-quality professional services you need.
 
Our missions:
We use our professional knowledge and experience to render the professional services our clients, existing or potential, request so as to expand their businesses overseas.

Our clients come from different businesses including consulting, manufacturing, professionals, trading, ... and so on. They come from overseas, Hong Kong and Mainland China.
 

Senior Partner of Stephen M. S. Lai & Co.

Mr. Stephen Lai

FCCA (a fellow member of the Association of Chartered Certificate Accountants)

HKICPA (a practising member of Hong Kong Institute of Certified Public Accountants)

MBA ( Master of Business Administration from Heriot-Watt University, UK)

PDA (Postgraduate Diploma in Business Administration from Heriot-Watt University,UK)

PCA (Postgraduate Certificate in Business Administration from Heriot-Watt University,UK)

LLB (Ungraduate of Law Degree from Nottingham Trent University, UK)

Here is person whom you can trust and whom you can rely on. Stephen says, “I have provided professional services for my clients, overseas, local or mainland china, for decades. I have used my professional knowledge and experience to advise my clients for offshore issues, help them to solve the issues they have.”

 
My clients comments:
Mr. Lyle Laxton says, “Stephen is helpful and professional. He can reply me what I need for my business. I can open my bank account within a couple of weeks. This man, I totally trust him.”

Mr. Victor Draganiuc say, “I never meet such guy who is patient, responsible and trustful. He can claim my offshore profits. It is real tax free with proven.

Mr. Zaini say, “I had used online formation service previously and registered one BVI company, but I cannot open my bank account. The service provider is not helpful. Their after-sales service is bad. Stephen is a good guy. He can open a bank account for me at Standard Chartered.”

"The latest comments from my client (XXX March 2010)
Dear Stephen,Just to inform you that the application you made on my behalf is successful (thanks to you) so I received from HSBC:
My account number (XXXXXXXXXXXX)
Security Device, activation PIN and User short name
ATM card and PIN number
I returned back to the bank, via registered mail, the acknowledge receipt forms for the ATM card (to activate it,) and for the Security Device.
So everything seems perfect... Thanks a lot again for your help.
I'll let you informed of next events.
Sincerely
Eric Piers
De XXXXX Limited"

On 20 April 2010, client's comments:
Dear Stephen,

I would like to thank you and your company, all has been done with HSBC in a perfect way, the account is open and fully operational.
You did a great job and I will recommend your services to some of my partners and clients.
I have been more than satisfied and again I would to thanks you for the professional job.
Have a good day, I will not miss to contact you again in the future if needed.
Omer

7 July 2010
From Company Name: WINIT TECHNOLOGIES
Beneficiary: Giulliano BN
Hi All, i spent sometime searching on net where i could open my company in HK
and i found Chui Lai & Co i added Mr Stephen on my skype and wait some hours due to Country time difference.
When i was preparing to shut down windows Stephen went online.
Today after 2-3 weeks i received my fantastic package with all tools ready to start work with it, so im very happy
that i found him, he is very professional with his work, he explained to me all the steps to open a company, explained to me what was the best option to me and everything, of course on first 10-20 minutes i stay worried thinking if i could trust but its normal, his attention gave to me a trust level because i make him wait some days to test if he was going to continue to answer my questions.
So, my last words for Mr Stephen is GREAT JOB could not be less than it for a GREAT PROFESSIONAL!
PS: if someone wants to confirm if im telling the true ask him my email will be a pleasure to confirm my comments with anyone....
Att
Giulliano

27 July 2010

The overall experience is quite pleasant for me.

It is the first company that I set up without being involved by myself.

Of course, there was quite a bit of uncertainty and concerns, etc.

he fundamental worry is that I will be left alone and nobody would be there to answer my question.

I asked a lot of questions, confirmed each step during the process: Stephen is a very helpful guy; who basically answered all my questions without empty promises. T

Stephen is always there; that really assures me that things will go well in the hands of Stephen. and things did go very well.

I have the company setup, name changed, bank account sorted out. All that I would like to say is Thank you to Stephen.

Thanks, Stephen.

Cheers,

David wei Song

keway enterprises limited

 Nickos
 

 
15 Mar 2011

Chanks and Co Limited

Once arriving to mr stephen office i knew i was in good hands. He and his team are very professional. They help me during all the process and they keep their word regarding timeline.

Stephen ms lai is the place to go when u need an offshore company.

Thanks.

Sokhona Talibe

22 Mar 2011

Dear Stephen,

Du Volt Limited

First of all thanks for your help and assistance with company registering.

I've got the black file with company documents and letters from HSBC.

So everything seems to be fine. Job done very well!

Thanks.

Best regards,

Maxm

9 May 2011

Dear Stephen,

We'd like to send our great thanks to your service, we've registered

successfully our company with the name  EASTAR PHARM LIMITED, and we

also receive all documents from you as well as from bank side.

Thanks for your consultancy

VU VAN CHIEN

Director I FuLink., JSC

HQ: 96/192 Le trong Tan street, Thanh XUan District, Hanoi, Vietnam

10 May 2011

Dear Stephen,

I received the initial pin and the token device for e-banking from the bank.

Now, I just have to send the receipt to the bank to activate e-banking.

Thank you for your assistance.

Kind regards

Susanne

Fortress Capital Group Limited

11 May 2011

Dear Mr.Stephen

Happy to inform you that I received the Internet banking kit . Account is activated now. Thanks for your Job.

Thanks and regards

Raj Exporters.

Bangalore  : +91 (0)984 5665 103

Fax Number : +91 (0)806 6885 558

Chennai    : +91 (0)955 1241 178

London(UK) : +44 (0)871 2846 284

       Fax : +44 (0)700 5805 103

E-mail     : info@rajexporters.com

URL        : www.rajexporters.com

18.5.2011

Dear Stephen Lai

Thank you for helping me out with my company formation and bank account everything has gone well..

Company name: Global Trading Evolution Limited

Date of commencement: 01-02-2011

Certificate No: 53706930-000-02-11-A

Tel: 2151-8009

Fax: 3579-3155

Thank you

Albert Bozickovic

20.5.2011

Dear Stephen,

I want to thank you and your staff for establishing Gegki Limited, for answering all!! my questions in such a professional way, and for assisting with the HSBC account opening. 

Thank you Stephen for your great performance. 

My best to you,

Ivonne Estrada

Gegki Limited

2.6.2011

Dear Stephen,

Today we received PIN code and security device and our bank account is active now.

I would like to say thank you for kind cooperation. I know that I push you so much,

but I hope you understand my reason.

Br

Michal

N.A. SUN EXPORT-IMP​ORT LIMITED