Hong Kong companies have been using offshore companies in their scheme of corporate reorganization to minimize tax liabilities. These offshore companies are usually registered in Bahamas, Samoa, BVI and the Cayman Islands.

However, these kinds of arrangement are being questioned and attached by the Inland Revenue Department of Hong Kong on the basis that such offshore companies do not have business establishment and operation in their jurisdiction but earned a large sum of tax-free profits.

According to the Macao Law (Commercial Law S.1, ss.12), an offshore institution in Macao SAR shall be exempted from the following tax if it abides to the rules for incorporation and operation:

1. Profits tax from operating offshore business;
2. Business registration tax;
3. Estated duty, inheritance tax and gift tax;
4. Tax related to property transfer;
5. Stamp duties and etc.

In addition, an offshore institution managers and specialized technicians (non-Macao residents) who are reallocated to live in Macao SAR will be exempted from salary tax for the first three years of their employment with that institution.

As such, Macao offshore institution may be a better choice for your business development.


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