Hong Kong Taxation
What tax does Hong Kong company need to pay every year?

Bascially, Hong Kong companies are only required to pay profits tax annually, if any tax payable. The profits tax rate for the first $2 million of profits is 8.25% and profits above that amount will continue to be subject to the tax rate of 16.5%; for unincorporated corporations in sole proprietorship or partnership, the two-tiered profits tax rate is 7.5% and 15%. If the company is not profitable, there is no need to pay profits tax.

What is the year end of Hong Kong company?

Generally, 31 March to 31 December of each year for the basis period of taxation is general Hong Kong Company's year ended but not compulsory.
Actually, the date can accord to the companies choice. Moreover, Hong Kong company has maximum 18 months for the first year's basis period of taxation.

Does Hong Kong need to levy tariffs on imported/exported commodities?

Generally imported/exported commodities need not be levied tariffs, except tobacco, liquor and petroleum. But import/export commodities must be declared at customs.

Can dondation can be deducted under Inland Revenue Ordinance?

Donation granted to recognizable charitable organisation is permitted to be deducted,
but total donation as required shall not be less than $100 and not more than 35% of assessable profits.

Can the losses of previous year to offset this year profits?

Losses incurred in a taxable year can be carried forward and used to offset the profits of the company in subsequent years.

What is Provisional Profits Tax payable?

Profits Tax shall be levied according to the actual profits of the taxable year. Since the profits of one year shall be determined only after the end of year,
Inland Revenue Department will levy provisional tax before the end of that year. After the profits of relevant year are assessed in the following year, the provisional tax already paid can be deducted from the Profits Tax payable of this year.

My Hong Kong company only opens collect and pay bills for other China Company, Any process accounting, auditing and tax declaration should be done?

Yes. Even if the company in Hong Kong only performs the role of collecting and paying for others, it shall be deemed as agency service business,
and its income shall be the commission for collection and payment for others.

My Company only opens an bank account at a foreign bank; shall the business conducted by my company be free from tax declaration?

No. According to Inland Revnue Ordinance, all Hong Kong company has the obligation to declare its financial condition to Inland Revenue Department,
no matter its business takes place in Hong Kong or not. When this company does not have its source of income in Hong Kong, it can apply the exemption from taxation.

My spouse and I have two children, so can each of us apply for child allowance of one child?

One of the couple should apply for all child allowance.

How is it determined whether the dependent's parents are usually living in Hong Kong?

Inland Revenue Department will consider their social and economic relations in Hong Kong, the objective factors referable of which include:

  • The number of days staying in Hong Kong
  • Any fixed residence in Hong Kong
  • Any property to reside in foreign country
  • Any job or business activities in Hong Kong or foreign country
  • Any relatives are living in Hong Kong or in foreign country

Generally, if dependent parents are living in foreign country for a long time, the number of days staying in Hong Kong is limited or only of home-visiting nature,
then they will not be deemed to be always living in Hong Kong by Inland Revenue Department, even if they hold Hong Kong permanent resident ID cards.

I pay living cost of $30,000 to my mother every year, and intend to apply for "dependent parent allowance" (DPA), then in which section of the tax declaration form shall I input the amount of living cost?

"Dependent parent allowance"(DPA) is subject to your parents' residence, ages and dependence for the application
When the dependent is always living in Hong Kong, aged 55 or above in this year, and given not less than $12,000 for a whole year,
they are entitled to apply for DPA.

I have much more question about the taxation, how can we find out the assist?

You can call Inland Revenue Department 187 8088 or you can contact us for seeking the professional advise.

Hong Kong Company
What are the requirements for incorporating a limited company in Hong Kong?

Incorporating a Hong Kong limited Company requires at least one natural person aged 18 or above acting as shareholder and director.
In additional, a Hong Kong address must be provided as a registered address and a Hong Kong resident or professional company must be act as the statutory secretary of the Company.

Can Mainland resident incorporate Hong Kong Company?

Yes. The Hong Kong Companies Ordinance has no restriction on the nationality of shareholder/director.

How long will it take for incorporating a Hong Kong Company?

Generally, it will take 5 workdays but most shortest incorporation days is within 1 workday.

Do the business nature have to be filled on the Business Registration Certificate?

The nature of business must be reported by the company to the government within one month of its commencement.

What is Company Secretary?

According to the Hong Kong Companies Ordinance, limited company shall appoint a Company Secretary,
whose function is to be in charge of arranging meetings, keeping minutes of meetings, and presenting statutory documents to governmental department in order to ensure the company meets statutory requirements.

What is the qualification for Company Secretary?

Hong Kong resident who are 18 years old or above, or Limited Company registered in Hong Kong is qualified.

What if there is no eligible person to act as statutory secretary of the company?

You can appoint the other company to provide the relevant service, we can also provide it.

What documents are needed in opening bank account?

Bank will generally ask for the following documents:

  • The original minutes of meetings approving opening of account
  • Certificate of Incorporation (copy certified by accountant)
  • Business Registration Certificate (copy certified by accountant)
  • Notice of appointment of director and secretary (copy certified by accountant)
  • Articles of Association (copy certified by accountant)
  • ID card/passport of each director
  • Proof of personal address of each director
  • The document for business prove

Any limitation for cash withdrawal from Hong Kong bank?

Capital in Hong Kong is freely circulated without limitation and also come in and go out of Hong Kong, other than any limitation from each bank policy.

Can Oversea or Chinese residents operate the bank account of a Hong Kong company?

Yes. Generally, the banks only require account operator holding valid passport or travel permit and ID card.

Can a company open several bank accounts?

Enterprise can open several accounts according to their needs, but every account has the same function and position.

Can a Hong Kong company be deregistered?

Yes, but it is conditional upon the following:

  • Mutual consent reached by all shareholders;
  • No running or operating any business of the company, or stop operating for more than 3 months before applying for deregistration;
  • No unpaid indebtedness, including government charges and taxes;
  • Notice of No Objection issued by the Commissioner of Inland Revenue obtained;
  • Afterward, we should submit the relevant information to Company Registery and Gazette; and When there is no body to object about 3 months, then will be complete.

Should Annual Return be submitted during the period of application for Hong Kong Company deregistration?

Yes. The company still needs to submit the Annual Return until the Companies Registry notifies the company of its deregistration.

What if a company fails to conduct an Annual Examination?

It will be fined. For late renewal of Business Registration Certificate, the company is subject to pay a fine of HK$300 every single year in additional to the payment of all outstanding government fees.
For late filing of an Annual Return, the amount of the fees or fine increases as shown below.
Delivery Date HK$
Within 42 days after the anniversary of incorporation 105
More than 42 days after but within 3 months after the anniversary of incorporation 870
More than 3 months after but within 6 months after the anniversary of incorporation 1,740
More than 6 months after but within 9 months after the anniversary of incorporation 2,610
More than 9 months after the anniversary of incorporation 3,480

The shareholders and directors of the company are liable to prosecution and, if convicted, pay the default fines. For each default, the maximum amount of the fine is HK$50,000.

Does your company provide audit services for the application for government subsidy?

Yes, we assist enterprises to apply for government subsidies in different stage, including BUD Fund, Technology Voucher, etc.