Environment: BVI (British Virgin Islands) is located in Caribbean Region, and about 80km from the east of Puerto Rico. Since the International Business Company Act was introduced in 1984, BVI’s offshore financial service industry rose rapidly. Now, it becomes the most popular offshore registration place in the world, and there are about 700,000 companies incorporated there. The newly formulated Business Company Law will further make BVI more popular.
Environment: The Cayman Islands are comprised of three islands in the Caribbean Sea in the south of Cuba. CAY belongs to the Great Britain and was originally found by Christopher Columbus. The financial service industry is one of the major industries there. The local government has been boosting continuous development of the offshore financial service industry. CAY is one of the two offshore jurisdictions accepted by Hong Kong Stock Exchanges for listing in Hong Kong. It becomes more reputable, particularly popular in Asia. CAY established the securities exchanges in 1997.
Environment: Before listing, the company is required to return profits to the parent company, i.e. from domestic company to a CAY-based company; for direct return, the tax is 10% or 15%, but with Hong Kong as intermediary, the tax is only 5%. Some clients set up HK-based companies to try to save large amount of tax. (According to the Tax Treaty, the bonus income tax rate deducted in China is fixed when bonuses are returned to the parent company, for instance, 15% for CAY-based companies, 5% for HK-based companies and 10% for BVI-based companies.)