US tax requirements on HK offshore Company.

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  1. #1

    Join Date
    Jun 2013
    Posts
    1

    US tax requirements on HK offshore Company.

    Hi,
    I am a Chinese citizen, American permanent resident.
    I'm going to register a HK offshore company for services, no trading goods.
    The company will operate and have clients in US, and of course some business activities in China, Hk as well.
    Is anyone familiar with the tax implications for this kind of situation in the US? I mean, do I pay Hk income/business tax only, or there is some double taxation?

    Thank you for any insights/advice.


  2. #2

    Join Date
    Oct 2004
    Location
    Midlevels / USA (MD) / London
    Posts
    2,219

    As a permanent resident, you are required to file US taxes every year if your gross annual income is over $9,350 USD ($72586 HKD). However, due to some tax exclusions for being overseas and if you rent an apartment, you do not actually have to pay US taxes until your income is well over $90,000 USD.

    You are also required to file an FBAR report on any (or all) bank accounts if you have > $10,000 USD in a foreign bank account(s) at any time during the year (if over $10,000 total, in the aggregate of all accounts added together, you have to report ALL foreign accounts even if it has only $1USD in it or so). There is also a report called FATCA that may apply to you depending on your income level.

    If you own a foreign company, then you also need to look at IRS Form 5471 (it's not fun). That is to report on the ownership of a foreign company by a US tax reporting citizen or resident. There are some situations where the company may be disregarded and the income attributable to you personally (and thus, you have to report it personally) and there are some situations in which it will be a foreign company with no reporting requirements to the USA.

    HOWEVER--this sort of stuff is not for a messageboard. You need to consult a professional accountant / attorney with experience in US-HK tax issues and corporate structures. This is not really a do-it-yourself kind of form / setup as the penalties for failure to file and mistakes can be rather harsh for a small company.