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  • Form of entity

    Limited private companies

    Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the corporation. Directors are elected by the shareholders or the board of the corporation. Officer could be appointed by directors to run the day-to-day operations of the corporation.

    Note: Additional forms of entity structures also exist and could be useful in some instances but are not covered in this guide either because they are less commonly used types of entity structures or they are not as likely to be relevant to the reader.

    Last modified 25 Jun 2024

  • Entity set up

    Limited private companies

    • Up to 50 shareholders
    • Right to transfer shares restricted
    • Invitation to public to subscribe for any shares or debentures prohibited
    • Generally no personal liability of the shareholders
    • Taxed on its profits at a corporate level. No tax on capital gains or dividends with exceptions for certain foreign-sourced income
    • Typical corporate documents include:
      • Articles of association
      • Certificate of incorporation
      • Business registration certificate
      • Board resolutions
      • Shareholders' resolutions
      • Share certificates
      • Common seal (optional) and
      • Registers.

    Board of directors has overall management responsibility.

    Annual return, notification of changes (such as share capital and directors) and creation of certain charges must be filed with the Companies Registry.

    Limited public companies

    No restrictions on number of shareholders, right to transfer and invitation to public to subscribe for shares or debentures.

    Interim and annual report also to be filed with Hong Kong Stock Exchange if the public company is listed in Hong Kong Stock Exchange.

    Companies limited by guarantee (without a share capital)

    Same as limited private companies, except liability of shareholders limited by the company's articles to the amount that the shareholders undertake to contribute to the assets of the company in the event of it being wound up.

    Last modified 25 Jun 2024

  • Minimum capital requirement

    Limited private companies

    No minimum capital requirement.

    Last modified 25 Jun 2024

  • Legal liability

    Limited private companies

    Shareholders of a corporation are generally not liable for the debts of a corporation aside from their financial contribution to the corporation.

    Last modified 25 Jun 2024

  • Tax presence

    Limited private companies

    A limited private company is taxed on its business profits at a corporate level. There are no tax on capital gains or dividends except for certain foreign-sourced income pursuant to the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Ordinance 2022 and the Inland Revenue (Amendment) (Taxation on Foreign-sourced Disposal Gains) Ordinance 2023  which came into effect on January 1, 2023 and January 1, 2024 respectively.

    Last modified 25 Jun 2024

  • Incorporation process

    Limited private companies

    File Incorporation Form, Notice to Business Registration Office and Articles of Association with the Companies Registry.

    Last modified 25 Jun 2024

  • Business recognition

    Limited private companies

    Well regarded and widely used.

    Last modified 25 Jun 2024

  • Shareholder meeting requirements

    Limited private companies

    Save for an annual general meeting, regular meetings are not mandatory. The Companies (Amendment) Ordinance 2023 provides companies with greater flexibility to hold fully virtual or hybrid general meeting.

    Last modified 25 Jun 2024

  • Board of director meeting requirements

    Limited private companies

    Regular meetings are not mandatory unless required by a shareholders' agreement and/or articles of association. However, it is recommended to convene board meetings to approve corporate changes and significant transactions.

    Last modified 25 Jun 2024

  • Annual company tax returns

    Limited private companies

    Must annually file tax returns with the Inland Revenue Department.

    Last modified 25 Jun 2024

  • Business registration filing requirements

    Limited private companies

    Business registration with the Inland Revenue Department valid for 1 or 3 years is required.

    Last modified 25 Jun 2024

  • Business expansion

    Limited private companies

    There is usually no need to change the articles of association as the business expands, unless the business scope is clearly stated in the articles. There may be a need to change the nature of business stated in the business registration certificate.

    Last modified 25 Jun 2024

  • Exit strategy

    Limited private companies

    Exit usually takes place by:

    • Voluntary winding up of the company
    • Sale of shares or
    • Sale of assets.

    Last modified 25 Jun 2024

  • Annual corporate maintenance requirements

    Limited private companies

    • Annual general meeting: Generally required to hold an annual general meeting of shareholders within 9 months after the end of its accounting reference period. An annual general meeting may be held virtually unless the articles of the company expressly preclude it or require the meeting to be held at a physical venue. Audited financial statements must be tabled at the annual general meeting. The annual general meeting can be replaced by written resolutions by all shareholders. This requirement may be waived for certain companies.

    • Annual Return: Generally required to be filed with the Companies Registry within 42 days after the date to which the return is made up to with updated company's information, including the shareholders' and the directors' information.

    • Audited financial statements: Required to be prepared up to the end of the financial year of the company in accordance with the Hong Kong GAAP.

    • Renewal of Business Registration Certificate (depends on its 1 year or 3 years validity period)

    Last modified 25 Jun 2024

  • Director / officer requirements

    Limited private companies

    At least 1 director; at least 1 director must be a natural person.

    For more information on directors’ duties, see our Global Guide to Directors’ Duties.

    Last modified 25 Jun 2024

  • Local corporate secretary requirement

    Limited private companies

    Company secretary must be either a Hong Kong corporate or an individual who is a Hong Kong resident (who cannot also be the sole director of the company).

    Last modified 25 Jun 2024

  • Local legal or admin representative requirement

    Limited private companies

    None beyond the required natural director, company secretary and designated representative to provide assistance relating to the company’s significant controllers register.

    Last modified 25 Jun 2024

  • Local office lease requirement

    Limited private companies

    None required.

    Last modified 25 Jun 2024

  • Other physical presence requirements

    Limited private companies

    Each Hong Kong company must have a registered office in Hong Kong.

    Last modified 25 Jun 2024

  • Sufficiency of virtual office

    Limited private companies

    Sufficient.

    Last modified 25 Jun 2024

  • Provision of local registered address by law firm or third-party service provider

    Limited private companies

    Allowed.

    Last modified 25 Jun 2024

  • Provision of local director or corporate secretary by law firm or third-party service provider

    Limited private companies

    Allowed. Starting from March 1, 2018, company service providers are required to apply for a Trust or Company Service Provider License from the Registrar of Companies.

    Last modified 25 Jun 2024

  • Nationality or residency requirements for shareholders, directors and officers

    Limited private companies

    None, except for the company secretary (see local corporate secretary requirement).

     

    Last modified 25 Jun 2024

  • Restrictions regarding appointment of nominee shareholders or directors

    Limited private companies

    None, except 1 natural director is required.

    Last modified 25 Jun 2024

  • Summary of director's, officer's and shareholder's authority and limitations thereof

    Limited private companies

    Directors are appointed by the shareholders or the board (if permitted by the articles of association), and the board of directors is the highest authority in the management of the corporation and governs the organization by establishing broad policies and objectives. In contrast, officers may be appointed by the directors to oversee day-to-day operations of the corporation.

    Last modified 25 Jun 2024

  • Public disclosure of identity of directors, officers and shareholders

    Limited private companies

    Identity of directors and shareholders is publicly disclosed in filings with the Companies Registry. Particulars of directors are partially available in the public filings.

    On October 24, 2022, the usual residential addresses and full identification numbers (collectively, Protected Information) of directors and company secretaries were replaced with correspondence addresses and partial identification numbers for public inspection. In addition, starting from December 27, 2023, incumbent or former directors may apply to the Companies Registry to have their Protected Information previously submitted replaced with correspondence addresses and partial identification numbers. Only “specified persons” are able to access the Protected Information upon application.

    Starting from March 1, 2018, companies incorporated in Hong Kong (except for listed and exempted companies) are required to create and maintain a significant controllers register. The register will not be publicly available but should be open for inspection by law enforcement officers upon demand.

    Last modified 25 Jun 2024

  • Minimum and maximum number of directors and shareholders

    Limited private companies

    A minimum of 1 shareholder and a maximum of 50 shareholders (otherwise the company will become a public company). A minimum of 1 natural director and no maximum number of directors.

    Last modified 25 Jun 2024

  • Minimum number of shareholders required

    Limited private companies

    1 shareholder is sufficient.

    Last modified 25 Jun 2024

  • Removal of directors or officers

    Limited private companies

    Removal of directors is generally allowed in general meeting (written resolution is not allowed) by an ordinary resolution of shareholders, but note special procedures apply (eg, the director must be given the right to be heard before a decision).

    Last modified 25 Jun 2024

  • Required and optional officers

    Limited private companies

    None, except director and company secretary.

    Last modified 25 Jun 2024

  • Board meeting requirements

    Limited private companies

    Notice to all directors, but directors can agree to short notice.

    Last modified 25 Jun 2024

  • Quorum requirements for shareholder and board meetings

    Limited private companies

    If a company has only 1 member, that member present is a quorum of a general meeting of the company. Otherwise, 2 members is a quorum of a general meeting of the company subject to a higher threshold in the articles of association.

    Quorum of board meetings depends on the articles of association of the company.

    Last modified 25 Jun 2024

  • Must a bank account be opened prior to incorporation, and must the bank account be local?

    Limited private companies

    Not necessary. A company can have a bank account anywhere.

    Last modified 25 Jun 2024

  • Auditing of local financials. If so, must the auditor be located in local jurisdiction, and must the company's books be kept locally?

    Limited private companies

    Audit of financial statements by registered Hong Kong auditors is required, but such audited financial statements are not publicly available. A company’s accounting records must be kept at its registered office or any other place that the directors think fit. If a company’s accounting records are kept at a place outside Hong Kong, the accounts and returns with respect to the business dealt with in those records must be sent to, and kept at, a place in Hong Kong.

    Audited accounts must be approved by the board and tabled at annual general meeting.

    Last modified 25 Jun 2024

  • Requirement regarding par value of stock

    Limited private companies

    No par value.

    Last modified 25 Jun 2024

  • Increasing of capitalization if needed

    Limited private companies

    The company may:

    • Increase its share capital by allotting and issuing new shares in certain circumstances
    • Capitalize its profits, with or without allotting and issuing new shares
    • Allot and issue bonus shares with or without increasing its share capital
    • Convert all or any of its shares into a larger or smaller number of shares

    Last modified 25 Jun 2024

  • Summary of how funds can be repatriated from your jurisdiction (ie dividends or redemption)

    Limited private companies

    Funds can be repatriated abroad via dividends, redemption (if the relevant shares are issued as redeemable shares), or share buyback. Different rules and procedures apply in each case.

    Last modified 25 Jun 2024

  • Restrictions on transferability of shares

    Limited private companies

    Shares can generally be transferred, but a company may refuse to register the transfer. Note also that the transfer documents must be duly stamped or adjudicated before the transfer can be registered by the company.

    Last modified 25 Jun 2024

  • Obtaining a name and naming requirements

    Limited private companies

    No name reservation system. Name must generally end with "Limited." There are specific words that relate to the government and certain industries, which are prohibited.

    Last modified 25 Jun 2024

  • Summary of "know your client" requirements

    Limited private companies

    Professional service providers complete customer due diligence according to guidelines issued by the Companies Registry on compliance of anti-money laundering and counter-terrorist financing requirements for Trust or Company Service Providers.

    Last modified 25 Jun 2024

  • Approval requirements for amending charter document

    Limited private companies

    Generally, the Articles of Association can be amended by special resolution of shareholders.

    Last modified 25 Jun 2024

  • Licenses required to conduct business in jurisdiction

    Limited private companies

    Generally, no license is required, except business registration with the Inland Revenue Department. Certain businesses require special licenses (e.g. telecommunications).

    Last modified 25 Jun 2024

  • Process of purchasing and utilizing a shelf company

    Limited private companies

    Shelf companies can be purchased from 3rd-party service providers, but are less common nowadays.

    Last modified 25 Jun 2024

  • Key contacts
    Anderson Lam
    Anderson Lam
    Partner DLA Piper Hong Kong [email protected] T +852 2103 0722 View bio
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Auditing of local financials. If so, must the auditor be located in local jurisdiction, and must the company's books be kept locally?

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Hong Kong, SAR

Limited private companies

Audit of financial statements by registered Hong Kong auditors is required, but such audited financial statements are not publicly available. A company’s accounting records must be kept at its registered office or any other place that the directors think fit. If a company’s accounting records are kept at a place outside Hong Kong, the accounts and returns with respect to the business dealt with in those records must be sent to, and kept at, a place in Hong Kong.

Audited accounts must be approved by the board and tabled at annual general meeting.

Last modified 25 Jun 2024

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