1. why mainland companies choose to do return investment
From the policy point of view, China has been actively introducing foreign capital since the reform and opening up, and foreign capital has played an important role in our economy. In order to attract foreign investment, China has provided many preferential measures on behalf of tax preference in policy. It is these preferential policies that played a great role in the early stage of China's reform and opening up.
On the other hand, a new mode of foreign investment has emerged in recent years, that is, direct investment in China through offshore offshore financial centers. This phenomenon has increased with the Japanese drama, and the proportion has risen sharply. After analysis, many mainland enterprises started to use the Off Shore Company to do return investment. So why do mainland enterprises choose to make a return investment?
Actually, the reason for choosing the return investment is mainly reflected in the tax advantage. Domestic enterprises, through their overseas companies such as Hongkong, BVI British Virgin Islands, the Cayman Islands and other Off Shore Company as "springboards", invest in the name of foreign capital in the name of foreign investment. Because China is a country open to the outside world, it has provided many preferential tax benefits to foreign invested enterprises, with a minimum tax rate of up to 15%. The tax exemption policy is precisely this preferential policy to attract a large number of mainland enterprises to choose to make a return investment.
2. return investment choice of registered Hongkong company or Off Shore Company
Does Off Shore Company choose Off Shore Company or Off Shore Company for return investment?
From the use point of view: compared to the Off Shore Company, the name of the Hongkong company is very free, the name of the company is allowed to contain regional and industrial nature, to facilitate the promotion and development of the brand in the country, and the Off Shore Company can only be used for collecting and listing or listing.
From the tax aspect, Hongkong has no Off Shore Company preferential tax, but the cost of registered Hongkong company is very low, and the simple tax rate of Hongkong tax system is low, and Hongkong company allows Hongkong empty shell company to exist, and the profit can not be paid in Hongkong, it is also the mainland entrepreneur and individual SOHO choose Hongkong. Part of the reason.
From the later operation point of view: Hongkong company registration every year after the annual review and tax, and the Off Shore Company does not need annual review and tax, each year only need to pay the annual fee to maintain the company can be maintained, in the later maintenance, the Off Shore Company has a greater advantage.
Now more and more mainland enterprises are returning home to invest with foreign capital, which is generally given to the first few years of tax exemption, tax reduction or subsidies, which is very conducive to the enterprise to do the curve defense operation.
3. Hongkong Off Shore Company do return investment legal
Is it lawful to carry out investment activities in tax planning and avoid tax in Off Shore Company?
First of all, we must make clear the difference between "reasonable tax avoidance" and "tax evasion". Tax avoidance is also called tax planning, which refers to a kind of financial management activity that can reduce the tax burden of the enterprise itself by making scientific and reasonable selection and planning from a variety of tax schemes within the established tax law and the rule of law framework. The act of not paying or paying taxes is an illegal act not permitted by law and will be punished by law.
From the perspective of legitimacy, the enterprise to do tax planning is to reduce the tax burden, the pursuit of the maximum tax benefits, such behavior is to comply with the tax laws and regulations, there is a clear legal provisions on the basis of the state's permission and encouragement, is the legal tax planning behavior.
From the relevant policies, the Off Shore Company in Hongkong has been the best offshore land for reasonable tax avoidance, and the mainland enterprises in the Off Shore Company run for return investment also have corresponding policy support.
The return investment of the Off Shore Company, such as the notice on the foreign exchange management of domestic residents through foreign Special Purpose Company financing and return investment in foreign exchange management, means that the domestic residents' direct investment activities carried out in China through Special Purpose Company (including Hongkong, BVI, etc.) are subject to foreign exchange management. The protection and restriction of the reason.
According to the notice, it shows that the Off Shore Company in Hongkong only needs to deal with Special Purpose Company foreign exchange registration according to the regulations, and can set up foreign invested enterprises legally in China by return investment and enjoy special preferential treatment of foreign enterprises. Thus, the return investment of Off Shore Company in Hongkong is a legal investment behavior.