Buying an apartment tru a shell company?

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  1. #1

    Join Date
    Jun 2008
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    Buying an apartment tru a shell company?

    I will be transfered to Hong Kong by the end of the year and I am trying to find out whether it would be a sensible idea to set up a limited company under my name to buy an apartment and then have my employer directly pay my housing allowance to the company I'd have set up. The idea is of course to save this allowance as my employer won't offer me the option of a higher salary with no housing allowance. Could anybody tell me what step I should follow and what would be the tax and legal consequences of such a construction?

    Thanx for the help!


  2. #2

    Join Date
    Apr 2003
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    You will have to declare the rental income you earn as the owner of the company. Also, if its a limited company, you need to submit annual returns etc.

    Also, do note that the employer can do a search and find out who the owner of that company is, using the companies registry.


  3. #3

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    Quote Originally Posted by KnowItAll
    You will have to declare the rental income you earn as the owner of the company. Also, if its a limited company, you need to submit annual returns etc.

    Also, do note that the employer can do a search and find out who the owner of that company is, using the companies registry.
    But wouldn't it save stamp duty in case of reselling the company rather than the property?
    By the way, a Macau company is way easier (and cheaper) to maintain. (no audits for a class B taxpayer [Profits not over 500000 MOP in 3 successive years], no business registration fees). I wonder if there was any obstacle for Macau company to buy property in HK.
    Last edited by hktraveller; 17-06-2008 at 04:06 PM.

  4. #4

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    Getting mortgage for Shell company may be difficult specially if you are not a permanent resident of Hong Kong. You will have to give personal guarantee, and also proof of the income the shell company will earn.
    If you do get the mortgage, you can write of the interest earned against the income and pay Tax on the balance profit.
    Cost of maitaining the company would be about HK$15,000 annually. This includes, B.R Certificate, Audit fees, annual returns and tax returns.
    Buying through an off shore shell company is not a problem in Hong Kong. However most Banks will not provide mortgage for an off shore company.


  5. #5

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    Apr 2003
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    Oldtimer - what about stamp duty? Would they collect stamp duty when you sell the company? Saw some mention about transfer of capital assets etc .... in greek, on the IRD website.


  6. #6

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    In my experience it is difficult to sell the shell company with the property.
    Buyers prefer to buy the property and pay the stamp duty.

    Vendor is left with the shell which can be liquidated.


  7. #7

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    You should see professional tax/accounting advice on what structure to use. A company, trust, etc. This may save you a lot of pain and heartache later on. If you are spending heaps money on an apartment, a fraction of that on professional advice is only sensible.