How to Set up an Offshore Company in Hong Kong in 2025

Setting up an offshore company can be a smart move for entrepreneurs and international businesses looking to manage taxes, safeguard assets, and operate across borders more efficiently. Among well-known offshore jurisdictions, Hong Kong is especially attractive thanks to its strong legal system, streamlined company registration process, and territorial tax regime, which may exempt qualifying foreign-sourced income from tax.

With the right structure, incorporating in Hong Kong while operating abroad can offer real tax advantages, without the complexity of traditional tax havens.

In this guide, we’ll explain what a Hong Kong offshore company is, how to set one up, and what to know about staying compliant.

A Hong Kong offshore company is a business incorporated in Hong Kong that conducts all its business activities outside the city. These companies may benefit from tax advantages under Hong Kong’s territorial tax system, but only if certain conditions are met.
Unlike traditional tax havens such as the British Virgin Islands or the Cayman Islands, Hong Kong is a well-regulated and internationally respected offshore jurisdiction. It offers several advantages for foreign founders:

• A transparent legal framework
• Strong banking and corporate infrastructure
• Strategic access to international trade, especially across Asia
• No capital gains tax, VAT, or withholding tax
• Flexibility to open multi-currency corporate bank accounts for international business operations

These factors make Hong Kong a preferred option for entrepreneurs and international business owners seeking compliance, credibility, and tax efficiency.

To be treated as an offshore company, your business must operate fully outside of Hong Kong. That said, every Hong Kong company must still meet a few local obligations, including:

• A registered office in Hong Kong
• A local company secretary
• Properly maintained financial statements

These basic elements are required to meet Hong Kong’s legal standards. We’ll cover all company formation requirements later in this guide.

Many founders confuse offshore and onshore status when setting up a Hong Kong company. Here's a quick comparison to highlight the differences:

Setting up an offshore company in Hong Kong follows the same company registration process as for any local entity. What sets it apart is that the business operates entirely outside Hong Kong and may qualify for a tax exemption under the territorial tax system.

Foreign entrepreneurs can register and manage a Hong Kong company remotely. There’s no requirement for directors or shareholders to reside in Hong Kong, and the entire registration process can be completed online.

Here are the basic requirements to incorporate a Hong Kong offshore company:

Here’s a quick overview of how incorporation works:

Step 1: Choose your business entity

Most offshore companies are registered as private limited companies for limited liability and credibility.

Step 2: Reserve your company name

Submit your preferred name for approval via the Companies Registry online portal.

Step 3: Prepare and submit documents

Upload required documents, such as the Articles of Association, ID proofs, and registered address, through the e-Registry platform and pay the government fee.

Step 4: Receive your documents

Once approved (usually within 3–5 business days), you’ll receive:

• A Certificate of Incorporation
• A Business Registration Certificate issued by the Inland Revenue Department (IRD)

These confirm your company’s legal status and are required for bank account opening and offshore tax exemption.

Setting up a Hong Kong offshore company involves both one-time setup fees and ongoing annual costs. While prices vary depending on your service provider and business complexity, the table below provides a general overview based on insights from our survey study of 120 entrepreneurs on company formation costs.

One-Time Setup Costs

Annual Maintenance Costs

Setting up a Hong Kong offshore company doesn’t automatically grant you a 0% tax rate. To benefit from Hong Kong’s territorial tax system, your company must qualify under the Foreign-Sourced Income Exemption (FSIE) regime, which is administered by the Inland Revenue Department (IRD).

Under this regime, certain income, such as capital gains, interest, royalties, and dividends, may be exempt from income tax if you can prove:

• The income was earned entirely from offshore business activities
• Your company has real economic substance outside Hong Kong (e.g., overseas management or operational control)

You’ll need to submit an Offshore Tax Claim (OTC) with your first Profits Tax Return (PTR)—usually issued 18 months after incorporation. The IRD will expect supporting documents such as:

• Contracts and invoices with international clients
• Bank statements showing foreign-sourced payments
• Evidence that business decisions are made outside Hong Kong
• Audited financial statements prepared by a certified Hong Kong accountant

If your application is approved, offshore status is typically valid for three to five years, subject to review.

After approval, compliance is ongoing, not one-and-done.

You’ll still be required to:

• File a Profits Tax Return (PTR) every year, even if no income was earned in Hong Kong
• Maintain audited financial statements that reflect only offshore income
• Submit your Annual Return (Form NAR1) to the Companies Registry each year
• Renew your Business Registration Certificate (BRC) annually or every three years

⚠️ Just as important: your daily business operations must remain offshore. That means avoiding actions like hiring local employees, renting office space in Hong Kong, or signing contracts within the territory. Any of these may result in your tax exemption being revoked, and your foreign income being taxed at the standard corporate tax rate of 16.5%.

Opening a corporate bank account is a key step after your offshore company incorporation. It allows you to manage international business payments, maintain clear financial statements, and stay compliant, especially if you're applying for tax exemption under Hong Kong’s territorial tax system.
Hong Kong offers a variety of providers for bank account opening, each with its own advantages and challenges. Here's a quick comparison:

While fintech providers are not regulated as traditional banks, many offer reliable alternatives tailored to international business needs. Be sure to review each provider’s licensing and service terms before opening an account.

If you're looking to run a global business with fewer borders and more flexibility, setting up in Hong Kong can be a smart move. It offers the structure, reputation, and access that international entrepreneurs value without the red tape found in many other jurisdictions.

With a clear understanding of what’s required, your offshore company can operate smoothly and stay focused on what matters most — growing your business across borders.