Hong Kong and Singapore are catching up with the British Virgin Islands and Cayman Islands as the preferred places for companies to register, a survey has found.
Offshore Incorporations Ltd (OIL), which sells offshore shell companies, said more multinationals would set up in Hong Kong and Singapore in the next five to 10 years.
The popularity of the Virgin Islands and Cayman Islands as destinations for offshore companies will diminish as new tax agreements between countries undercut the advantages of the islands as tax havens.
OIL's chief executive, Martin Crawford, said 62 per cent of the last 100 companies that listed on the Hong Kong stock exchange registered in the Cayman Islands.
But more of these firms would choose to incorporate their subsidiaries in Hong Kong, Crawford said.
'We saw a growth in demand for structures which combine off- and onshore elements since last year and it has been growing faster than expected since then,' he said.
Offshore companies have long been a popular tool for tax avoidance, fund management and asset protection because it is difficult for outsiders to get to the ultimate beneficiary of the company. But regulatory amendments introduced by the Organisation for Economic Co-operation and Development in 2008 have improved the transparency of the taxation systems of these offshore jurisdictions. That, plus treaties between countries to avoid double taxation on multinationals, has reduced the attraction of offshore companies.