Procedures and Fees for Transfer of Shares in a Hong Kong Company
Unless otherwise indicated, the company mentioned in this quotation refers to a private company limited by shares incorporated in accordance with the Hong Kong Companies Ordinance.
Our fees for handling the transfer of shares (equity) of a company registered in Hong Kong are USD390 for the first and USD190 for the second transfer and thereafter. Our fee covers the preparation of share transfer documents (other than share transfer agreement), arrangement to have the documents stamped and payment of stamp duty etc.
For the purpose of processing a share transfer in Hong Kong, the Articles of Association, Certificate of Incorporation, the latest audited financial statements (or management accounts) and value of consideration are needed. If there is a share transfer agreement signed, it will also need to be attached.
Share transfer documents will be stamped by Electronic stamping. Traditional stamping on original copies of transfer documents is available for an extra service fee of USD50 if the transfer documents cannot be stamped by electronic stamping or as requested by client.
The process for transfer of share normally takes 2 to 3 working days, started from the day we receive the duly signed transfer documents. Same day service is available for an extra service fee of USD200.
A transfer of share(s) is not required to be registered with the Companies Registry and therefore the change of shareholder is not readily available for public inspection immediately in the Companies Registry. Instead, any such changes are reflected in the next Annual Return.
In accordance with the Hong Kong “Stamp Duty Ordinance? if the share transfer is a transfer between members within a group of companies, stamp duty on the transfer can be exempted upon application. Kaizen can handle the application for exemption upon request.
- Services and Fees for Share Transfer
Our fee for handling the transfer of share(s) (for Electronic Stamping only) in a private company registered in Hong Kong is USD390 for the first transfer and USD190 for the second transfer and thereafter. For a traditional stamping on original signed documents, extra service fee of USD50 will be charged.
The fee quoted above covers the following services in particular:
(1)
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Review Articles of Association of the subject company to check any restrictions imposed on share transfer.
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(2)
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Prepare Minutes of Directors?Meeting (or Written Resolution) and Share Transfer Instrument and Bought and Sold Note.
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(3)
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Arrange to have the Transfer Instrument and Bought and Sold Note executed and stamped by the Hong Kong Stamp Duty Office and payment of Stamp Duty.
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(4)
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Arrange to cancel the old share certificate held by the existing shareholder and issue new share certificate to the new shareholder (or existing shareholder).
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(5)
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Update the Register of Members.
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The transfer of shares from one shareholder to another person is counted as one transfer. The transfer of shares from one person to two persons or from two persons to one person are counted as two transfers.
Please note delivery charge and stamp duty are not included in the fees stated above. A detailed illustration of the calculation of stamp duty is provided in Section 5 of this quotation. Kaizen can draft or arrange a lawyer for preparation of a share transfer agreement upon request.
Rush service is available for an extra fee of USD200. With rush service, the whole process could be completed within the same day.
- Payment Terms and Methods
We currently accept Hong Kong Dollar check, cash or TT and credit card payment through PayPal only. If payment is settled through PayPal, an extra 5% service fee will be charged. Upon confirmation of order, we will issue fee note and email it together with detailed wire instructions to you. Because of the nature of services, we require full payment in advance. In addition, once service is commenced, no service fees will be refunded.
If China or Taiwan official tax invoice is required, value-added tax or business tax at the prevailing rate in the respective jurisdictions will be charged.
- Materials needed for Share Transfer
For the purpose of share transfer, we need to have the following materials:
(1)
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A copy of Articles of Association of the subject company;
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(2)
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A copy of the Certificate of Incorporation and the latest Annual Return;
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(3)
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The latest Register of Members;
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(4)
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The name of the seller (Transferor);
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(5)
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The number of shares to be transferred and the value of consideration;
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(6)
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A copy of the passport or identity card and residential address proof of the new shareholder (transferee);
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(7)
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The copy of the share transfer agreement, if any; and
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(8)
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A copy of the latest audited financial statements and/or latest management accounts if audited financial statements have not prepared or they are not up to date. In the case of a holding company, a copy of consolidated accounts or the latest audited financial statements for its subsidiary(ies) is/are also requested.
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If Kaizen is the secretary of your Hong Kong company and is updating the books of accounts and also acting as the auditor of your Hong Kong company, then you only need to prepare items (4) to (7).
- Procedures and Time Frame for Share Transfer
The process for transfer of shares works like this:
(1)
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Client provides the information and documents required for the transfer; |
(2)
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Kaizen prepares the Instrument of Transfer and Bought and Sold Note and minutes (written resolution) and other transfer documents; |
(3)
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Kaizen then arranges the transferor and transferee to sign the transfer documents; |
(4)
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Kaizen delivers the transfer documents to the Stamp Duty Office for execution and payment of stamp duty. The Electronic Stamp Certificates would be issued by the Stamp Duty Office (Stamping on the original copies of signed transfer documents for a traditional stamping); |
(5)
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Kaizen then prepares new share certificates and update the Register of Members; |
(6)
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Kaizen delivers all documents to you.
| The Electronic Stamp Certificates can be obtained within one working days. We could provide a rush service for a traditional stamping and the whole process could also be done in one day, an additional service fee USD200 would be charged. (Exclusive the delay would be made by Stamp Duty Office.)
After the share transfer process is completed, the company should send an updated Register of Member to its banker to update its records with the bank.
- Calculation for Stamp Duty
In accordance with the Hong Kong “Stamp Duty Ordinance? the share transfer documents need to be stamped and a stamp duty at 0.13%* on the amount of consideration or net assets of the company will be charged and collected from the transferor and transferee respectively. The stamp duty is therefore 0.26% and payable HKD5 for each of instrument of transfer.
The amount of stamp duty to be paid is calculated as following:
(Amount of Consideration (or net assets of the subject company x % of interest to be transferred) x 0.13%) x 2 + HKD5
For example, Mr. A is transferring 10,000 shares, representing 50% of shareholding on Hong Kong Sample Company Limited to Mr. B for HKD100. The financial statements of Hong Kong Sample Company Limited shows a net asset of HKD1,000,000. Each of Mr. A and B will need to pay stamp duty as calculated below:
(HKD1,000,000 x 50% x 0.13%) x 2 + HKD5 = HKD1,305
In case where the transferor and transferee are member companies of the same group, the company can apply for exemption from payment of stamp duty in accordance with the Hong Kong “Stamp Duty Ordinance? Kaizen can help with the application for group relief of stamp duty. Our fee for this service will be quoted upon request.
*Stamp duty rate be raised to 0.13%, totaling 0.26% on 1 August 2021. The stamp duty rate before 1 August 2021 is 0.1%, totaling 0.2%.
- Electronic Stamping Condition
(1)
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The share(s) is/are owned by not more than 4 jointly-owned transferors; |
(2)
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The share(s) is/are transferred to not more than 4 jointly-owned transferees; |
(3)
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The share transfer involves the transfer of the full beneficial ownership; |
(4)
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It requires to provide a fixed amount of consideration. If value of share(s) or consideration in foreign currency, it requires to convert the share values to their equivalents in Hong Kong dollars; |
(5)
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Late stamping not exceeding 4 years with no request for remission of penalty; |
(6)
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Does not require adjudication on nominee agreement or sales and purchase agreement.
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- Documents to be Returned to Client after Processing
The following documents will be returned to client as proof of transfer:
(1)
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Board Minutes/Written Resolution authorizing the transfer(s); |
(2)
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Electronic Stamp Certificates with signed Instrument of Transfer and Bought and Sold Note (or Stamped Instrument of Transfer and Bought and Sold Note); |
(3)
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Updated Register of Members; |
(4)
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Share certificate(s). | |
