Tax residence in Georgia and have HK offshore company

[Lolloeoicrypto]

I am a tax resident in Georgia and want to set up an offshore company in Hong Kong for a marketing services business. I plan to appoint a nominee director. Is this possible, or in practice, will they say that the company lacks substance in Hong Kong and require me to pay taxes in Georgia?

 

[AtlasShrugged]

Does Georgia enforce their CFC rules?

 

[JosephLL]

Does Georgia enforce their CFC rules?

Introduced in 2021. However , it seems that entity is not treated as CFC if:

* Registered in juriadiction with >15% CIT
* Not holding
* Annual revenue < 1M GEL

 

[JosephLL]

But , yet again, I think CFC rules are not relevant before the mysterious PE/PEM conditions are established here ...

 

[daniels27]

I am a tax resident in Georgia and want to set up an offshore company in Hong Kong for a marketing services business. I plan to appoint a nominee director. Is this possible, or in practice, will they say that the company lacks substance in Hong Kong and require me to pay taxes in Georgia?

In theorty, it is possible that they will deny the offshore exemption and ask you to pay taxes in Hong Kong if you do not pay taxes in Georgia, although there are not many reports where it happened. We discussed this a couple of times.

 

[James Turner]

There is no issue with you creating a Hong Kong Company and you can use a Nominee Director in HK. Nominee Shareholder is also possible, but you could use a Trust or Foundation to help avoid any CFC situation.

It is possible under CFC rules that Georgia could claim that taxes are payable where their is no substance in HK, but if you need to put in place substance this is also possible. If you remain below the levels where CFC applies then this will not be an issue anyway.

 

[daniels27]

It is possible under CFC rules that Georgia could claim that taxes are payable where their is no substance in HK, but if you need to put in place substance this is also possible.

Not sure if I understand correctly. But if you have substance in Hong Kong, it will most likely be taxable there at 8.25% for the base and then 16.5% in the remainder.

 

[JimBeam]

The CIT rate in Georgia is 15% - so unless your company is making millions - it's not worth the hustle of opening a company in HK.
Also, there are free zones that offer 0% CIT so that's also an option.