Choosing a Jurisdiction for Overseas Incorporation: What to Know in 2025

With Korea’s passage of the Yellow Envelope Act in August 2025 and the December 2025 tax reform raising every corporate-tax bracket by one percentage point — lifting the top rate from 24% to 25% effective FY2026 — inquiries about overseas company formation have surged. However, setting up and running a company in a jurisdiction where you don’t live is never simple. In this article, we explain which jurisdictions are best for overseas incorporation and their key pros and cons.

Hong Kong

Hong Kong serves as a gateway to China and Southeast Asia. Electronic filings via the Companies Registry’s e-Registry can be processed in as little as one hour, while paper filings typically take around four working days.

• Corporate tax: Two-tier system (8.25% up to HKD 2M, 16.5% thereafter)
• Other benefits: No dividend tax or capital gains tax, 100% foreign ownership, no local partner required
• Requirements: Registered office, local company secretary, annual audit and tax filings

BVI (British Virgin Islands)

BVI is a traditional offshore jurisdiction with 0% corporate income tax and no public disclosure of shareholder or director details. Commonly used for holding companies, asset ownership, and SPVs.

• Advantages: No tax burden, simple regulations
• Challenges: Difficulties opening bank accounts due to global regulatory pressure
• ESR: Companies must demonstrate real activity
• New rules: Annual financial return required for FY2023 onwards (first filings due in 2025 for calendar-year filers); beneficial-ownership filing in effect from 2 July 2025 (non-public), with a 1 January 2026 compliance deadline

United States – Delaware

Delaware is the most common jurisdiction for U.S. startups and venture-backed companies.

• Preferred structure: VCs generally prefer Delaware C-Corps
• Corporate tax: 8.7% on Delaware-apportioned income
• LLC costs: Flat $300 annual tax (paid by June 1 each year)
• Banking: EIN, incorporation docs, and ID required; some banks require in-person visits
• Timeline: Incorporation typically within 1–2 business days

Singapore

Singapore is a politically and economically stable hub with strong financial, accounting, and legal infrastructure.

• Headline rate: 17%
• Tax incentives: Start-Up Tax Exemption (first 3 YAs): 75% off first S$100k, 50% off next S$100k (up to S$125k exempt per YA); Partial Tax Exemption thereafter
• Tax treaties: Network of around 100 DTAs (98 full DTAs plus limited DTAs and EOI arrangements)
• Requirements: At least one locally resident director
• Challenges: Higher setup/maintenance costs vs Hong Kong; strict annual accounting and audit

Conclusion

• Hong Kong: Fast setup, low taxes, financial hub
• BVI: No taxes, but regulatory and banking hurdles
• Delaware: VC-friendly, ideal for U.S. startups
• Singapore: Strong infrastructure and incentives, but higher costs