TAXATION

The company would not be subject to taxation in TCI but would pay taxation in Hong Kong at a rate of 17.5% on Hong Kong source income only.

SHAREHOLDERS

Only one shareholder is required and shares cannot be issued in bearer form if the company is to be treated as a Hong Kong private company and therefore be exempted from the requirement to publicly file accounts. The Memorandum & Articles of Association must prohibit the issue of bearer shares and impose the usual restrictions on share transfers. There is no requirement to file the details of shareholders on any public record either in TCI or in Hong Kong.

DIRECTORS

A minimum of one director is required and corporate directors are permitted. There is no requirement to file the details of directors on any public record in TCI but those details must appear on the public file in Hong Kong. As the director is legally responsible for compliance with the Hong Kong Companies Ordinance and the Inland Revenue Ordinance, in cases where we act as a director, an amount of US $2,225 (HK $17,225) will have to be deposited in order to guarantee such compliance. This amount may be returned when business operations cease and the company has been wound up in the manner required by law.

ANNUAL REPORTING

There is no requirement to file accounts in TCI but accounts would have to be prepared and submitted to the Inland Revenue Department in Hong Kong.

TIMESCALE

Incorporation in TCI can be achieved within 24 hours however it does take approximately one week for documents to arrive from TCI. The procedures for Hong Kong registration would take approximately 4 additional weeks to complete.

RESTRICTIONS
ON NAME AND
ACTIVITY

The following words cannot be used either in English or any other language: Assurance, Bank, Building Society, Commonwealth, Co-operative Society, Fidelity, Friendly Society, Guarantee, Indemnity, Insurance, Re-insurance, Trust, Trustee, Underwriter, Royal, Imperial, Empire, Municipal and Chartered or any derivatives of any of those words without the written consent of the Financial Secretary. The name of the company need NOT indicate that the company is limited.

LOCAL REQUIREMENTS

As a matter of local company law the company MUST maintain a registered office address within the TCI and MUST also appoint a TCI resident as registered agent. We would generally provide these services as part of the domiciliary service fee. In addition, the company must maintain a registered office address in Hong Kong and must appoint a local Hong Kong resident as authorised representative and a local Hong Kong company secretary. Again, we are able to provide these services.

SECRECY

Both the Companies Ordinance and the Confidential Relationships Ordinance 1979 make it an offence punishable by a maximum fine of US$50,000 and/or a prison sentence of up to 3 years for anybody to reveal confidential information, including details of the owners about a TCI exempt company or to threaten to reveal such information.