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Offshore Banking

Most CMS clients who purchase an offshore company also need banking and investment services to enjoy the full benefits of going "offshore". CMS provides a full range of banking and investment services through its affiliates in various countries. We are able to handle the entire account opening process for you so you do not need to visit the bank or investment company in person. Depending on the bank selected, credit cards and/or debit cards are also available, together with ATM cards, telephone banking and internet banking services. We can assist you with offshore banking in Hong Kong, Singapore, Europe, Seychelles, Mauritius, the Caribbean and Central America.

Establishing an offshore bank account is not a simple matter and some offshore and international banks may take more than one month to open a bank account from receipt of the completed documents. Upon understanding your business objectives and personal requirements our consultants will be happy to advise you on a suitable bank and bank account to meet your specific needs. 

Please note that CMS only offers assistance with opening corporate accounts for companies under our management.

 

Hong Kong commits to implementing AEOI on 1^st January 2017

Over 100 tax authorities across the world have committed to the Automatic Exchange of Information (AEOI) to provide significantly increased global tax transparency. AEOI is a new reporting standard developed by the OECD and G20 that provides for the exchange of non-resident financial account information with the tax authorities in the account holders’ country of residence.

Pre-agreed information will be provided each year to overseas tax jurisdictions which Hong Kong has entered into an AEOI agreement with (known as an “AEOI partner”) , without having to send a specific request. The information relates only to the tax residents of the jurisdiction of the AEOI partner.  

AEOI is a global tax initiative that will allow Hong Kong to implement a globally consistent standard under which taxpayer information will be exchanged with Hong Kong’s tax treaty and information exchange partners. Details of Hong Kong’s Tax Treaty Network can be found at http://www.ird.gov.hk/eng/tax/dta_country.htm

The Inland Revenue (Amendment) (No. 3) Ordinance 2016 (“the Amendment Ordinance”), which commenced operation on 30 June 2016, has put in place a legislative framework for Hong Kong to implement AEOI.  To deliver the commitment, Hong Kong will commence the first exchanges by the end of 2018.

The Amendment Ordinance provides reporting financial institutions in Hong Kong with the legal basis to collect the required information from account holders in relation to periods that start on or after 1 January 2017.  

For accounts opened on or after 1 January 2017 -  reporting financial institutions should request a self-certification from the account holder. 

For pre-existing accounts (i.e. accounts opened before 1 January 2017) -  reporting financial institutions can use information on file for the account holders to determine their tax residence.  They may also contact the account holders for further information or to verify the information held.

Hong Kong financial institutions will identify the financial accounts held by individuals or entities liable to tax by reason of residence in the AEOI partner jurisdictions.  The financial institution will collect and furnish this information to the Hong Kong IRD on an annual basis.  The IRD will then transmit the information to the tax administration of the relevant jurisdiction of which the account holder is tax resident.

Financial institutions would be obliged to start collecting information for reportable accounts of account holders who are tax residents of an AEOI partner, in the calendar year following the approval by the Legislative Council of the inclusion of the AEOI partner as a reportable jurisdiction in the law.  Financial institutions will then report the information to IRD in the next calendar year after its collection for onward transmission to relevant AEOI partners.

“Tax residents of reportable jurisdictions” refer to those who are liable to tax by reason of residence in the jurisdictions with which Hong Kong has entered into an AEOI arrangement.  Unless an account holder is a tax resident of another jurisdiction which has signed AEOI agreement with Hong Kong, FIs in Hong Kong do not need to report the information of such account to the Inland Revenue Department (IRD).

FIs may request account holders to provide self-certifications on their personal information including tax residence, so as to enable FIs to identify those accounts which should be reported under the AEOI regime. An account holder who knowingly or recklessly provides a statement that is misleading, false or incorrect in a material particular in making a self-certification to a reporting financial institutions is liable on conviction to a fine of HK$10,000. 

To facilitate the checking of tax residency by account holders, the Organisation for Economic Cooperation and Development (OECD) has established a portal which provides information on tax residency rules in jurisdictions which have committed to implementing AEOI.  The website address is as follows http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-residency/#d.en.347760

The proposed information which financial institutions will have to report to the Inland Revenue.

Department on each reportable financial account holder would include the name, address, date and place of birth, jurisdiction of residence, taxpayer identification number and financial data such as interest, dividends, account balance or value, income from certain insurance products, sales proceeds from financial assets and other income generated with respect to assets held in the account or payment made to the account.

Please Contact Us for further information.