Hong Kong Limited Company - Legal & Compliance requirements

In Hong Kong, a limited company is required to handle various legal and compliance matters annually to ensure its operations comply with relevant regulations. Below is an overview of the key statutory obligations and compliance requirements:

1. Filing the Annual Return with the Companies Registry

• Legal Basis: Companies Ordinance (Cap. 622)

• Details: The Annual Return (Form NAR1) must include company information such as directors, company secretary, shareholders, and registered office address.

• Filing Deadline: Within 42 days after the anniversary of the company's incorporation (for private companies). Late submission will incur penalties.

• Purpose: To maintain the transparency and public accessibility of the company's registered information.

  
  

2. Filing a Profits Tax Return with the Inland Revenue Department (IRD)

• Legal Basis: Inland Revenue Ordinance (Cap. 112)

• Details: The company must report its financial status, including business income, profits, and expenses, along with audited financial statements.

• Filing Deadlines:

  • For newly incorporated companies: Within 3 months of receiving the first Profits Tax Return from the IRD.

  • For other companies: Annually, as specified in the tax return issued by the IRD (usually within 1 month after the financial year-end).

• Purpose: To calculate the amount of profits tax payable (generally at a rate of 16.5%).

  
  

3. Maintaining a Company Secretary and Registered Office

• Legal Basis: Companies Ordinance (Cap. 622)

• Requirements:

  • Company Secretary: Every company must appoint a company secretary responsible for ensuring compliance with statutory requirements (e.g., filing legal documents).

  • Registered Office: The company must maintain a valid registered office address for receiving government and legal correspondence.

• Purpose: To ensure the company operates in compliance with the law.

  
  

4. Keeping Company Records and Accounting Books

• Legal Basis: Companies Ordinance (Cap. 622)

• Requirements:

  • Maintain complete company records, such as the register of members and minutes of board meetings.

  • Retain financial records for at least 7 years, including details of income, expenses, assets, and liabilities.

• Purpose: To provide transparency in the company’s financial and operational activities for audits and inspections.

  
  

5. Auditing Financial Statements

• Legal Basis: Companies Ordinance (Cap. 622)

• Requirements: Companies must appoint a qualified practicing accountant to audit their financial statements annually, which must then be approved at the annual general meeting (AGM).

• Purpose: To ensure the accuracy and reliability of the company’s financial status.

  
  

6. Other Tax-Related Responsibilities

• Employer’s Return:

  • If the company employs staff, it must submit an Employer's Return (Form IR56) to the IRD annually, detailing employees’ salaries and tax details.

• Business Registration Certificate Renewal:

  • The company must renew its Business Registration Certificate with the IRD each year and pay the applicable fee.

    
    

7. Holding an Annual General Meeting (AGM)

• Legal Basis: Companies Ordinance (Cap. 622)

• Requirements:

  • Private companies may choose to dispense with holding an AGM, but financial statements must still be approved in writing within the statutory timeframe.

• Purpose: To allow shareholders to review and approve the company’s financial statements and other significant matters.

  
  

8. Filing Other Statutory Documents for Changes

• If there are any changes to the company, the following documents must be filed with the Companies Registry:

  • Change of company name (Form NR1)

  • Change of director or company secretary information (Forms ND2A or ND2B)

  • Change in shareholding or share capital (Form NSC1)

    
    

Summary

The key annual compliance tasks for a Hong Kong limited company include:

1. Filing the Annual Return with the Companies Registry.

2. Submitting the Profits Tax Return and other tax-related documents to the IRD.

3. Ensuring the validity of the company secretary, registered office, and Business Registration Certificate.

4. Maintaining company records and financial transparency, and appointing an auditor to audit the financial statements.

   
   

By fulfilling these statutory obligations on time, companies can avoid penalties and legal risks, ensuring their operations remain compliant.

May 2025

Dr. Anthony Lai and Mr. Herbert Kwoon