Corporate Compliance in Hong Kong
Companies in Hong Kong are required to have:
- a registered office in Hong Kong;
- at least one company director who is a natural person, and either a resident or non-resident in Hong Kong; and
- one company secretary – either a natural person (ordinarily residing in Hong Kong), or a body corporate (having a registered office in Hong Kong).
So if you are looking to benefit from Hong Kong’s free trade policy and explore the world’s largest market of China, you can outsource all your company secretarial needs to us. We assist our clients in:
- incorporating a Hong Kong company
- complying with the Companies Ordinance of Hong Kong
- maintaining the statutory registers
- meeting various statutory deadlines and assisting with statutory compliance
- preparing and filing of annual returns to Hong Kong’s Company Registry
- preparing and filing all necessary corporate resolutions when required
- providing company directors and other responsible people with notice of meetings
- arranging for companies annual general meeting
- preparation of minutes of the meetings
No mandatory requirement of residency
Importantly, for Hong Kong company incorporation, it is not mandatory to be a resident of the city. So non-residents can work with a local company secretary, along with securing a local office space (both of which can be provided by us) to set-up a company in Hong Kong.
Additionally, by engaging our Hong Kong company secretarial services experts:
- you save costs as we do day-to-day accounts maintenance,
- you avoid penalties as we file everything on time and fulfil all the compliance requirements
- you can avail our remote services option
- you can benefit from our secondment services during the peak reporting season
- you get a dedicated team to ensure continuity and familiarity
Compliance Requirement from a Company Secretary in Hong Kong
In general, a Hong Kong company secretary has the following compliance requirement to take care off (all of which we provide).
1) Incorporation: Incorporate the company with a local address.
2) Registration: Register the company with the Business Registration Office of the Hong Kong’s Inland Revenue Department within one month of starting the business. (both points 1 and 2 can be done simultaneously by submitting From IRBR1 (Notice to Business Registration Office), along with the Form NNC1 (the Incorporation Form).
3) Licensing: Apply for any particular government Business licences, permits, certificates or approvals, which are necessary to start your business operations in Hong Kong.
4) Ownership: A Hong Kong company must always maintain up-to-date beneficial ownership information in the Significant Controllers Register.
5) Taxation: All newly incorporated companies are required to file their first profits tax return some 18 months after the date of company incorporation.
For existing companies, the profits tax returns are issued on the first working day of April every year, which must be filed within one month from the date of issue, or the date of submission specified on the profits tax return sent to the company.
In terms of filing of forms, depending on whether you are a corporation (Form BIR51), partnership business, or a non-resident person (Form BIR54), you must file the relevant forms to report your profits tax liability, along with the supplementary forms (BIRS1 to BIRS10) introduced this year.
6) Statutory Returns: Every company in Hong Kong must also ensure timely filing of statutory returns to the Companies Registrar in compliance with the Companies Ordinance (CO). These include annual returns (Form NAR1), any changes in the registered office address (Form NR1), or changes in particulars of company directors and company secretary (Form ND2B). Also required are certified true copies of the company’s financial statements including the report of the auditors and the report of the directors.
Do note that Form NAR1 is the form to be filled and submitted, as per sections 662 and 664 of the CO, within:
- For a private company: within 42 days after the anniversary of the date of incorporation every year.
- For a company limited by guarantee: within 42 days after the company’s return date i.e. the date nine months after the end of the company’s accounting reference period. Do note that the return date for a public company is six months after the end of the company’s accounting reference period. Accounting reference period denotes the time period for which the company’s annual financial statements are to be prepared.
Importantly, failure to file any of the above may result in prosecution and fines for company directors, company secretary, and any other responsible position holder in the company. The penalty (maximum) for every breach is HK$50,000, and a daily default fine of HK$1,000 for continuing offending.
7) Audit: All companies in Hong Kong must have their annual accounts audited by an independent and certified public accountant (CPA). This is as per Chapter 622 of Hong Kong’s Companies Ordinance. To ensure this happens is also the responsibility of the company secretary.
8) Apart from the above, general accounting and bookkeeping compliance requirements in Hong Kong include maintenance of accounts receivable; maintenance of ledgers – general, accounts payable, fixed assets; budgeting, financial statements, and bank reconciliation; reviews – monthly, quarterly or annual; and timely reports to the company board.