As business activities become increasingly global, establishing a company overseas is no longer limited to large multinational corporations. International trading businesses, technology companies, investors, startups, import-export companies, and individuals holding international assets may all require an overseas legal entity for different purposes.
However, one common misconception is that every company established overseas is an offshore company.
In practice, overseas companies can generally be divided into two main categories in international corporate advisory:
- Offshore Companies
- Onshore Companies
These two models differ significantly in terms of their intended use, taxation, accounting requirements, actual business activities, banking accessibility, and suitability for different business models.
AT Express Vietnam provides comprehensive advisory and support services for overseas company formation, helping clients choose an appropriate corporate structure rather than simply selecting a jurisdiction based on its tax rate.
What Is an Overseas Company?
For the purposes of this article, an overseas company refers to a company incorporated in a country or jurisdiction different from the owner’s country of residence or primary market.
For example, a Vietnamese entrepreneur or business may establish:
- A company in Hong Kong for international trading;
- A company in Singapore to develop operations in Southeast Asia;
- A company in the United States to access US customers or investors;
- A company in the BVI to hold international shares or assets;
- A company in the Cayman Islands for certain investment or financial structures.
Therefore:
An offshore company is an overseas company, but not every overseas company is an offshore company.
This is an important distinction when selecting an international corporate structure.
What Is an Offshore Company?
An offshore company is generally understood as a company incorporated in an international jurisdiction where the owner does not necessarily reside or directly conduct business in that market.
Jurisdictions commonly associated with offshore structures include:
- British Virgin Islands – BVI
- Cayman Islands
- Seychelles
- Other international financial centres
Offshore companies are commonly used for purposes such as:
- Holding companies – holding shares in other companies;
- Holding international assets;
- Special Purpose Vehicles – SPVs;
- International investments;
- Corporate ownership structures;
- Certain cross-border trading activities;
- Investment funds or appropriate financial structures.
Offshore Does Not Mean “Tax-Free”
This is an important point for businesses to understand.
An offshore jurisdiction may not impose corporate income tax or may apply very low taxes within that jurisdiction. However, this does not automatically mean that the company or its owner has no tax obligations in any other country.
Tax obligations may depend on factors such as:
- Where the company is actually managed;
- Where revenue is generated;
- Where the owner is tax resident;
- Where the company has employees or an office;
- The type of income;
- Anti-tax-avoidance regulations in relevant countries;
- Economic Substance requirements;
- Beneficial Ownership regulations;
- Relevant tax treaties.
Therefore, the objective of establishing an offshore company should be to create a legal and appropriate international structure, rather than simply finding a jurisdiction with “0% tax”.
Offshore Does Not Mean “Completely Anonymous”
The international financial system now applies increasingly strict requirements relating to:
- KYC – Know Your Customer
- AML – Anti-Money Laundering
- Beneficial Ownership
- CRS and tax information exchange
- Economic Substance
- Source of funds and source of wealth verification
For example, BVI currently requires most BVI Business Companies to submit an annual financial return and has implemented mechanisms for accessing and requesting beneficial ownership information under applicable regulations.
Therefore, an offshore company should not be promoted as a tool for being “completely anonymous” or “not requiring reporting”.
What Is an Onshore Company?
An onshore company is a company incorporated and operated under the standard legal, tax, and corporate governance framework of a country or jurisdiction.
International businesses commonly consider onshore jurisdictions such as:
- Hong Kong
- Singapore
- The United States, including Delaware
- The United Kingdom
- EU countries
- UAE and other international business centres
Unlike offshore structures, onshore companies generally have established systems for:
- Corporate taxation;
- Tax filing;
- Accounting;
- Annual Returns;
- Registered Office;
- Company Secretary or local representative in certain jurisdictions;
- Requirements relating to actual business activities.
In return, onshore companies are often more suitable for businesses that require:
- Actual business operations;
- Import and export;
- International trading;
- Banking relationships;
- Payment gateways;
- Marketplaces;
- Corporate customers;
- Investors;
- Employees and offices;
- Long-term brand development in a specific market.
What Is the Difference Between Offshore and Onshore Companies?
| Criteria | Offshore | Onshore |
| Common purposes | Holding, SPV, investment, asset ownership, international structuring | Actual business operations, trading, technology, services |
| Activities in the country of incorporation | Often limited or not the primary focus | May conduct domestic and international business |
| Taxation | May have very low or no certain direct taxes | Subject to the country’s tax system |
| Accounting & reporting | Depends on the jurisdiction; requirements are increasing | Generally subject to regular accounting and reporting obligations |
| Economic Substance | May apply | May arise depending on activities and local regulations |
| Banking | KYC is often stringent | Generally more suitable for genuine business operations |
| Tax treaties | Often more limited | Many jurisdictions have extensive DTA networks |
| Suitable for | Holding, investment, SPV | Trading, SaaS, startups, services, business operations |
There is no single structure that is best for everyone.
The important question is what the company is actually being established for.
Should You Establish an Offshore or Onshore Company?
Before choosing a jurisdiction, AT Express typically considers several important questions.
Where Do You Conduct Business?
If most customers, suppliers and business activities are located in Asia, Hong Kong or Singapore may be worth considering rather than a purely offshore company.
Do You Need the Company for Business Operations or Simply to Hold Assets/Shares?
If the objective is to establish an operating company, an onshore structure may be more appropriate.
If the primary purpose is holding, SPV or investment structuring, certain offshore jurisdictions may be suitable.
Where Do You Need a Bank Account?
Company incorporation and bank account opening are two separate processes.
No jurisdiction can guarantee 100% that a bank will open an account after a company has been incorporated. Banks independently conduct KYC, AML, business model, source of funds, customer, supplier and beneficial owner assessments.
Do You Need to Use Double Taxation Agreements – DTA?
Certain onshore structures have significantly broader DTA networks than offshore jurisdictions.
Where Is the Owner Tax Resident?
This is an important factor.
Incorporating a company in a low-tax jurisdiction does not automatically eliminate the tax obligations of the owner or the company in the owner’s country of tax residence.
Common International Jurisdictions
Hong Kong – Suitable for International Trading
Hong Kong is one of Asia’s major international trading and financial centres.
It is an onshore company jurisdiction and should not simply be described as an “offshore company”.
Hong Kong applies a territorial source-based taxation principle. For corporations eligible for the two-tiered profits tax regime, the current rates are 8.25% on the first HKD 2 million of assessable profits and 16.5% on the portion above that amount.
Hong Kong companies also have compliance obligations, including the requirement for private companies to file an Annual Return with the Companies Registry.
Hong Kong is commonly suitable for:
- Trading;
- Import – Export;
- E-commerce;
- Consulting;
- International services;
- Businesses trading with China and Asia.
Singapore – An International Business Centre
Singapore is suitable for businesses seeking to establish long-term operations in Southeast Asia and international markets.
Singapore’s standard Corporate Income Tax rate is currently 17% on chargeable income, although businesses may qualify for exemptions or incentives subject to applicable conditions.
The treatment of foreign-sourced income also depends on the type of income, where it arises and the specific conditions for available exemptions. Therefore, Singapore should not simply be promoted as a jurisdiction where “foreign income is tax-free”.
Singapore is commonly suitable for:
- Technology companies;
- Startups;
- International trading;
- Regional Headquarters;
- Consulting;
- Investment management;
- Businesses expanding into ASEAN markets.
British Virgin Islands – BVI
The BVI is one of the long-established jurisdictions used for international corporate structures.
BVI companies are commonly considered for:
- Holding companies;
- SPVs;
- International share ownership;
- Investments;
- Certain commercial and asset structures.
However, BVI companies today remain subject to various corporate governance and reporting requirements. The BVI Financial Services Commission confirms that most companies must submit an annual financial return to their registered agent, subject to certain exemptions under applicable legislation.
Therefore, BVI should not be described as a jurisdiction where a company is simply “incorporated and requires no reporting”.
Cayman Islands
The Cayman Islands are widely used for:
- Investment funds;
- Holding structures;
- SPVs;
- Private equity;
- International investment structures.
The Cayman Islands do not impose income tax or capital gains tax and certain other forms of direct taxation commonly imposed on incorporated companies.
However, the Cayman Islands also have an Economic Substance regime. The 2026 version of the Economic Substance legislation continues to impose requirements on relevant entities conducting relevant activities.
Therefore:
“No corporate income tax” does not mean “no compliance requirements”.
Delaware – United States
Delaware is well known for its developed corporate legal system and is commonly chosen for:
- Startups;
- Technology companies;
- Holding structures;
- Companies seeking investment in the United States;
- Businesses serving the US market.
Delaware is an onshore US corporate jurisdiction, not an offshore jurisdiction in the conventional sense.
Delaware corporations are subject to Annual Report and Franchise Tax requirements. For LLCs, LPs and GPs, Delaware currently imposes an annual tax of USD 400, while these entity types are not required to file an Annual Franchise Tax Report.
In addition to Delaware requirements, businesses must also consider US federal tax obligations and other requirements depending on their structure and activities.
Benefits of Establishing an Overseas Company
When properly structured, an overseas company can provide various benefits to a business.
Expanding International Business Activities
An appropriate legal entity in Hong Kong, Singapore, the US or a target market may make it easier for a business to enter into contracts with international customers and partners.
Building an International Ownership Structure
A holding company may be used to hold:
- Shares;
- Subsidiaries;
- Assets;
- Intellectual property;
- International investments.
The specific structure should be designed based on the laws and tax regulations of the countries involved.
Optimising a Legal Tax Structure
Choosing an appropriate jurisdiction may help a business develop a more efficient tax structure.
However, AT Express recommends that any structure be based on actual business activities and compliance with applicable tax laws, rather than simply relying on the nominal tax rate.
Accessing International Banking and Payment Systems
An appropriate international company may help businesses access:
- Corporate bank accounts;
- Multi-currency accounts;
- Payment gateways;
- Merchant accounts;
- International payment platforms.
Final approval remains subject to the relevant bank or financial institution.
Attracting Partners and Investors
In certain industries, using a jurisdiction familiar to investors may help simplify investment processes, due diligence and shareholder agreements.
Risk Allocation and Management
Businesses operating across multiple countries may establish different legal entities for different activities, markets or projects.
When appropriately structured, this may help separate risks between an operating company, holding company and SPV.
Overseas Company Formation Process
AT Express structures its advisory process around each client’s specific business objectives.
Step 1: Analyse Your Requirements
We assess:
- Business model;
- Customer markets;
- Supplier countries;
- Owner’s country of residence;
- Expected revenue;
- Banking requirements;
- Investment or holding requirements;
- Long-term development plans.
Step 2: Choose Between Offshore and Onshore
AT Express compares suitable jurisdictions based on:
- Taxation;
- Incorporation costs;
- Ongoing costs;
- Accounting;
- Audit;
- Economic Substance;
- Banking;
- Jurisdiction reputation;
- Business scalability.
Step 3: Prepare KYC and Incorporation Documents
Documents may include:
- Passport;
- Proof of Address;
- Shareholder information;
- Director information;
- Business activity description;
- Source of Funds / Source of Wealth, where required;
- Additional documents depending on the jurisdiction.
Step 4: Incorporate the Company
AT Express coordinates with partners and registered agents in the relevant jurisdiction to complete the incorporation process.
Once completed, the corporate document package may include, depending on the jurisdiction:
- Certificate of Incorporation;
- Articles / Memorandum;
- Register of Directors;
- Register of Shareholders;
- Share Certificate;
- Other corporate documents.
Step 5: Bank Account Support
AT Express assists clients in preparing documentation for the application process with suitable banks or financial institutions.
Bank account applications are subject to the bank’s independent KYC/AML procedures and cannot be guaranteed simply because the company has been successfully incorporated.
Step 6: Accounting and Ongoing Company Maintenance
After incorporation, AT Express may provide support depending on the jurisdiction, including:
- Annual Return;
- Accounting;
- Tax filing;
- Registered Office;
- Company Secretary;
- Registered Agent;
- Economic Substance;
- Renewal;
- Corporate changes;
- Compliance.
How Much Does It Cost to Establish an Overseas Company?
A single standard price should not be applied to all jurisdictions.
The actual cost depends on:
- Jurisdiction;
- Company type;
- Government fees;
- Registered Agent;
- Registered Office;
- Company Secretary;
- Accounting;
- Audit;
- Economic Substance;
- Banking support;
- Number of shareholders and directors;
- Business activity.
Therefore, rather than advertising a general price of USD 1,000–5,000 for every case, AT Express provides a separate fee schedule based on each jurisdiction and the client’s actual requirements.
This allows clients to understand both the initial incorporation costs and the annual ongoing costs before making a decision.
Why Choose AT Express?
Establishing an overseas company is not simply about obtaining a Certificate of Incorporation. More importantly, the company needs to be usable in practice.
AT Express Vietnam takes a comprehensive advisory approach.
Pre-Incorporation Structuring Advice
We do not select a jurisdiction simply because it advertises “0% tax”. Instead, we analyse the client’s actual intended use.
Offshore and Onshore
We support various options ranging from Hong Kong, Singapore and the US to BVI, Cayman and other international jurisdictions.
Comprehensive Support
From incorporation and corporate documents to banking support, accounting and annual compliance.
International Business Advisory
Suitable for Vietnamese businesses and international clients expanding their business, investment or asset structures across multiple markets.
Transparent Costs
Clients receive information about both initial costs and ongoing obligations before establishing the company.
Common Mistakes When Establishing an Overseas Company
Choosing a Jurisdiction Only Because of 0% Tax
A low tax rate has limited value if the jurisdiction is unsuitable for the business activities or the bank refuses to open an account.
Assuming Offshore Means Complete Confidentiality
Banks, registered agents and competent authorities may require beneficial ownership information under applicable regulations.
Establishing the Company Before Considering Banking
Banking strategy should be considered from the beginning.
Ignoring Ongoing Costs
In addition to the incorporation fee, there may be:
- Renewal;
- Registered Agent;
- Registered Office;
- Accounting;
- Audit;
- Tax filing;
- Economic Substance.
Failing to Consider the Owner’s Tax Residence
This is one of the most important factors when designing an international corporate structure.
Frequently Asked Questions About Overseas Company Formation
Is Establishing an Overseas Company Legal?
Yes. Owning a company overseas is a common form of international business and investment activity. However, owners must comply with applicable tax, foreign exchange, investment, reporting and other requirements in their country of residence as well as in the jurisdiction where the company is incorporated.
Does an Offshore Company Have to Pay Tax?
There is no single answer that applies to all offshore companies.
A jurisdiction may not impose corporate income tax, but the company or its owner may still have tax obligations in another country based on the place of management, source of income, tax residence and actual business activities.
Is Hong Kong an Offshore Company?
Under the classification used in this article, Hong Kong is considered an onshore international business jurisdiction.
A Hong Kong company operates under the Companies Ordinance and is subject to Annual Return requirements as well as applicable tax, accounting and audit obligations.
Is Singapore an Offshore Company?
Singapore should not be grouped together with offshore jurisdictions such as BVI or Cayman.
Singapore is an onshore business centre with a comprehensive corporate tax, accounting and compliance framework. Its standard Corporate Income Tax rate is currently 17% on chargeable income.
Can an Overseas Company Open a Bank Account?
It is possible, but it is not automatic.
Banks independently assess the business model, source of funds, beneficial owner, customer markets, suppliers and risk profile.
Which Country Should I Establish My Company In?
There is no single jurisdiction suitable for every business.
A trading company dealing with China may have very different requirements from a technology startup raising capital in the US or a holding company holding international assets.
Therefore, the jurisdiction should be selected after analysing the specific business model.
International Company Formation Advisory with AT Express
A good international corporate structure is not necessarily the structure with the lowest tax rate.
It should be a structure that is:
Suitable for the business activity – usable with banks – cost-controlled – and capable of meeting long-term compliance requirements.
AT Express supports clients from choosing between Offshore and Onshore structures, selecting the appropriate jurisdiction, incorporating the legal entity, preparing banking documents, through to accounting and ongoing company maintenance.
If you are planning to establish a company in Hong Kong, Singapore, the United States, BVI, Cayman Islands or other international markets, contact AT Express Vietnam for a structural analysis before deciding where to incorporate.
*Disclaimer
The information above is provided for general informational purposes only. Regulations relating to taxation, companies, beneficial ownership, economic substance and banking may change and depend on the specific circumstances of each case. Clients should obtain individual professional advice before implementing an international corporate structure.*
