BVI and Cayman holding companies and economic substance
BVI and Cayman companies are still used as holding or financing intermediates. They must meet local economic-substance rules and CRS reporting of controlling persons. Registration is not the same as substance.
ESR
Pure holding companies often face a reduced substance test. Licensed activity, headquarters functions or relevant income usually require local people, expenditure and decision records, per the rules then in force.
CRS
If the intermediate is a Passive NFE, controlling persons may still be reported. The ownership chart should match the bank self-certificate.
Mainland indirect transfers
Changes to offshore holdings should be read with Mainland rules on indirect transfers by non-residents (SAT Announcement [2015] No. 7, as then in force). An offshore step does not stand alone.
Case-specific decisions differ — book a consultation with our advisers.
The content of this page is general professional information and does not constitute tax, legal or investment advice. For specific cases, please consult a Hong Kong practising accountant or tax adviser, or refer to official publications of the IRD / SFC / HKMA / CR.