Hong Kong Company Annual Renewal and Maintenance Costs
Unless otherwise advised, the Hong Kong company in this article refers to a private company limited by shares incorporated/registered in accordance with the Hong Kong Companies Ordinance.
Once after incorporation, a Hong Kong incorporated company is required by the Hong Kong Companies Ordinance and Inland Revenue Ordinance to update its books of accounts, prepare financial statements and arrange audit of its annual financial statements and file certain returns with both the Hong Kong Companies Registry (company registration authority) and Inland Revenue Department (tax authority). This article aims to explain briefly those compliance requirements and the related costs.
The annual costs to be expected to maintain a private company limited by shares registered in Hong Kong in good standing could be divided into two parts. The first part is fixed and considered to be the basic or minimum costs required and is fixed and the second part is varied and determined by the nature of the business, volume of transaction and amount of turnover and a few other factors.
1. Annual Maintenance Costs
After a company is officially registered in Hong Kong, it will have certain compliance requirements. These compliance requirements could be divided into two categories, one with fixed fees and another with variable fees, as listed in the table below. The total amount represents the minimum costs to maintain a trading company (with a turnover of less than USD650,000) in good standing in Hong Kong.
||Compliance Requirements with Fixed Fees
||Business Registration Certificate renewal fee
||Annual Return statutory filing fee
||Provision of first year Company Secretary
||Provision of first year Registered Office
||Annual General Meeting
||Compliance Requirements with Variable Fees
||Updating books of accounts (a monthly fee of USD50 is to be charged assuming less than 20 transactions per month)
||Financial statements statutory audit (assuming trading company with a turnover of less than USD650,000)
||Tax computation and filing of profits tax return
||Filing of Employer’s Return (per employee)
1. The annual retainer for provision of Company Secretary covers the following services:
(1) Provision of one Corporate Company Secretary (Kaizen Secretaries Limited acts as Company Secretary);
(2) Preparation and filing of Annual Return;
(3) Filing of notice of change of registered office and business address; preparation of minutes;
(4) Filing of notice of change of directors and secretary.
2. The annual cost for provision of Registered Office covers the following services:
(1) Provision of one street address as Registered Office of your Hong Kong company;
(2) Forward government mails to any location specified by clients. Please note handling fee of USD3 plus actual postage will be charged for each batch of mails forwarded.
(3) Please note the Registered Office is not to be used for business purpose unless otherwise agreed by Kaizen.
3. The annual maintenance/compliance fees are expected in the second year and thereafter and the variable fees are for general reference only and represents the minimum you should budget for the purpose of maintaining a Hong Kong company in good standing.
2. Annual Maintenance Fee Dates and Penalties
(1) Renewal of Registered Office and Company Secretary
Our Company Secretary and Registered Office services are to be renewed on the anniversary of incorporation and fees are to be paid 1 month before the anniversay date..
(2) Filing of Annual Return
An Annual Return is required to be filed within 42 days after the anniversary of incorporation together with the payment of a statutory filing fee of HKD105 (USD14).
Consequences of Non-filing or Filing Late
Companies have to pay higher registration fees for filing Annual Returns late. For a local private company having a share capital , the registration fee payable for the late delivery of an Annual Return is:
|If the Annual Return is delivered:
||more than 42 days after but within 3 months after the anniversary of incorporation
||more than 3 months after but within 6 months after the anniversary of incorporation
||more than 6 months after but within 9 months after the anniversary of incorporation
||more than 9 months after the anniversary of incorporation
In addition, companies which fail to file annual returns or file annual returns late are liable to prosecution and, if convicted, pay the fines imposed by the court. The maximum level of fine for a company which failed to comply with the requirements for completing and filing annual return is a fixed penalty of HK$50,000 and a daily default fine of HK$700.
(3) Renewal of Business Registration Certificate
The Business Registration is due for renewal around one month before and after it is expired. The current business registration fee is HKD450 (USD60) per annum. Late renewal will attract a penalty of HKD300 (USD40). Further delay will result in court proceeding and extra fine.
As the filing of Annual Return, renewal of Business Registration Certificate and Registered Office and Company Secretary services are due at the same time. Therefore, we normally send out notice of the annual renewal for all these items two months before they fall due and payment is expected at least 3 weeks before due date so as to allow us time to process the annual renewal.
Please note that our primary means of communication is email so please make sure we are being notified immediately should you change your email address.
(4) Annual Statutory Audit and Filing of Profits Tax Return
If a company choose to have its accounting year ended on 31 March, it is required to have its financial statements audited and the profits tax return filed with the Inland Revenue Department (Hong Kong Tax Authority) on or before 15 November the same year.
Late filing of Profits Tax Return will initially result in a fine of HKD1,200 (USD155) and further delay may result in court proceeding and extra fines.
For further information or assistance, please call us:
Hong Kong Office: +852 2341 1444
Singapore Office: +65 6883 1061
Shenzhen Office: +86 755 8268 4480
Shanghai Office: +86 21 6439 4114
Beijing Office: +86 10 6210 1890
or send email to email@example.com.