Guide to Hong Kong Annual Filing Requirements and General Compliance

Hong Kong is one of the most attractive destinations for investors due to its open oriented business policies.

Hong Kong is one of the most attractive destinations for investors due to its open oriented business policies. In Hong Kong, company incorporation is easy as any entrepreneur can wish for, but to maintain a legal business status, you have to follow the annual compliance requirements of Hong Kong. Under the law, every foreign and local company must file the Hong Kong annual filing requirements with the companies’ registry (CR) and Inland Revenue Department (IRD).

Basic Annual Compliance Requirements:

To maintain your business status legal and active, you should pay due attention to the following basic annual compliance requirements:

1. Renewal of Business Registration: Every business is required to renew their business registration at least one month before the expiry date to meet the compliance obligations of the CR. Business registration in Hong Kong may be valid from one to three years.

2. Renewal of Company’s Registered Office and Secretary: Local and foreign companies are required to appoint a Hong Kong resident as the company secretary. The company secretary may be a real individual or a body corporate.

Companies should have a local registered office but not P.O Box. The address must be provided to the companies registry (CR) to receive notices and other documents from Hong Kong Authorities.

3. Financial Accounting and Auditing: All the Hong Kong firms should appoint an auditor unless in dormant status. The accounting record must be prepared following the Hong Kong accounting standards. And the accounting record should be retained by the entity for seven years from the date of transaction.

A company accounting record includes:

• The receipt and payment register or income and expenditure register.
• Record of business assets and liabilities
• Proper record of daily cash received and payments with supporting documents.
• The necessary supporting documents to verify the entries in the book of accounts. Like vouchers, bank statements, company invoices and other relevant documents.

4. Corporation Record: Companies are advised to maintain record of the following documents for at least up to 10 years at the company’s registered office after the date of production.

• Company corporation certificate (CI).
• Business registration certificate.
• Articles of Association.
• Records of company’s meetings and minutes.
• Seal of the Company
• Company’s members and directors register
• Business licenses if applicable

5. Annual General Meeting: Every company must hold an annual general meeting to meet the compliance requirements. For newly registered firms the time period for holding their first AGM is 18 months from the date of formation while for others 15 months following the previous or within 9 months after the end of the company’s financial year.

Company’s audited income statement and balance sheet prepared according to the FRS framework approved by directors and presented to the shareholders within 21 days before the annual general meeting.

Following companies are not required to hold AGM under the laws

• SMEs or single member company
• Companies in Dormant state

6. Annual Tax filing and Entity’s Return: All companies are required to file an annual return (form, NAR 1) with CR and annual profit tax return with IRD.

7. Notify Companies Registry for changes of Company Particulars: Under the law, it is mandatory to notify CR of changes in any company particulars within 15 days from the date of change. The changes may be:

• • Change of company’s registered office
  • Change of company’s secretary of director
  • Change of company name
  • Issuance of new share

Hong Kong Annual Filing Requirements:

Local and foreign companies are required to file their annual filing requirements with Hong Kong Companies Registry (CR) and Inland Revenue Department (IRD).

1. Filing of Annual Return with CR (Companies Registry):

• The active private limited companies are required to file their annual return signed by the company’s secretary, managers and authorized representatives with the CR. Dormant companies are exempted from filing their annual return.
• The annual return by active companies must be filed with the CR annually within 42 days following the company’s incorporation date.
• In case of no change from the last return, companies are required to file form AR2 or AR3.
• Late filing may be subjected to higher registration fees and fines.

2. Filing of Annual Tax Return with IRD (Inland Revenue Department):

• Every company incorporated under the Hong Kong laws, must file their annual tax return also known as profit tax return (PTR) along with its audited financial statements with the IRD.
• Audited accounts include the company’s balance sheet, auditors report, profit and loss statement and calculation of tax computation.
• Annual tax return is released by the Inland Revenue Department in the month of April every year.
• Profit tax return must be submitted with the IRD within 1 month from the issuance date.
• Late submissions may result in fines and penalties by the authorities.

For further assistance and professional advice regarding compliance with the Hong Kong Company Registrations, contact us now. We will ensure all your concerns are eliminated and all the requirements are met to avoid any conflicts with the IRD.