Annual filing and general compliance requirements for Hong Kong companies

The purpose of this article is to give a summary of the current legal obligations for Hong Kong private limited companies regarding annual filing and statutory compliance.

Fundamental Obligations for Compliance

To comply with the regulations, a private limited company in Hong Kong must:

Have a local registered address (P.O. Box is not permissible). Hong Kong Company Formation can furnish a registered address for your new company at Unit 1411, 14/Floor, Cosco Tower, 183 Queen's Road Central, Sheung Wan, Hong Kong.!
Appoint a local resident company secretary (either an individual or a body corporate). We can serve as your company secretary!
Have at least one director who is a natural person and above 18 years of age, regardless of nationality (local or foreign).
Have at least one shareholder who is a person or a body corporate, above 18 years of age, and can be a local or foreigner.
Appoint an auditor, unless the company is classified as "dormant" under the Companies Ordinance, meaning it has had no relevant accounting transactions during a financial year.
Notify the Companies Registry of any alterations to registered particulars, including but not limited to the registered address, shareholder and director information, company secretary details, and changes to share capital:

Notification of change in registered office address must be made within 15 days after the date of change.
Notification of appointment or cessation of the company secretary and director must be made within 15 days from the date of appointment or ceasing to act.
Notification of change in particulars of secretary and director must be made within 15 days from the date of change of particulars.
The submission of statutory form NNC2 must be done within 15 days from the approval of the special resolution to alter the company name.
Notification of the passing of a special resolution or certain other resolutions must be made within 15 days after the passing of the resolution.
The company has a requirement to inform within 15 days following the modification if there is any relocation of its statutory books from the registered office.
Notification of any allotment or issue of new shares must be made within one month after the allotment or issue.

Renew the business registration one month before expiry annually or every three years, depending on the validity of the Certificate. Display the Business Registration Certificate at the principal place of business at all times.
The company is required to convene an Annual General Meeting (AGM) within 18 months of the incorporation date, and subsequently, hold AGMs every calendar year with no more than a 15-month interval between each meeting. The directors must present the company's financial accounts, including the Profit and Loss Account and Balance Sheet, in compliance with Hong Kong's Financial Reporting Standards (FRS) framework, and prepare a directors' report in conjunction with the annual accounts.
Comply with the annual accounts filing deadlines and requirements of Hong Kong's Companies Registry and Tax Authority, which will be elaborated later in the article.
Maintain certain records and documents at all times, such as the Incorporation Certificate, Business Registration Certificate, Articles of Association, minutes of all meetings of directors and members, updated financial records, company seal, share certificates, and registers (such as members register, directors register, and share register).
Maintain necessary business licenses, if applicable.
Maintain accurate and detailed accounting records that allow assessable profits of the business to be easily determined. The records must be kept for seven years from the transaction date. Failure to do so will result in penalties. In the event that accounting records are maintained outside of Hong Kong, the returns should be retained in Hong Kong. Starting from January 1st, 2005, Hong Kong has implemented a Financial Reporting Standards (FRS) framework, which relies on the International Financial Reporting Standards (IFRS) that are issued by the International Accounting Standards Board (IASB)..

The company's business records must consist of:

Books of accounts that record receipts and payments, or income and expenditure
The company needs to file the Annual Return once a year (excluding the year of its incorporation) within 42 days of its incorporation anniversary.
A record of the business's assets and liabilities
The business is required to maintain a daily record of all the money received and spent, accompanied by relevant details of the receipts or payments.

Requirements and Deadlines for Annual Filing

The Inland Revenue Department (IRD) and Companies Registry mandate that both local and foreign companies, including registered branches and incorporated subsidiaries, in Hong Kong comply with annual filing requirements. Below are the compulsory annual filing obligations that private limited firms need to comply with in Hong Kong.

Submission of Annual Return to Companies Registry

A Hong Kong-incorporated private limited company is obliged to submit an Annual Return to the Companies Registry. This return must be signed by a director, company secretary, manager, or authorized representative. Nonetheless, a private company that has applied for a dormant status under the Companies Ordinance, which indicates that it had no relevant accounting transactions during a financial year, is exempted from submitting annual returns.

An Annual Return is a specified form that includes particulars of the company such as the registered office address, shareholders, directors, secretary, and others. There is no need to file the company's financial accounts with the Companies Registry.

The company needs to file the Annual Return once a year (excluding the year of its incorporation) within 42 days of its incorporation anniversary. Even if the information in the previous return has not changed, a new annual return must still be submitted before the due date.

Late filing incurs a higher registration fee, and the company and its officers are susceptible to prosecution and fines.

Submitting the yearly tax declaration to the Inland Revenue Department (IRD)

In accordance with company law in Hong Kong, all companies established within Hong Kong are required to submit an annual Tax Return (also known as the Profits Tax Return) and audited accounts to the Inland Revenue Department of Hong Kong (IRD).

IRD will issue notifications for Tax Return filing on April 1st of each year, while newly incorporated companies will receive their notification on the 18th month after incorporation. Companies are required to file their Tax Return within one month from the date of notification but may request an extension if necessary. Failure to submit the tax return by the due date may result in penalty charges or prosecution.

Supporting documents must be attached when filing the Tax Return such as:

The company's balance sheet, auditor's report, and Profit & Loss Account for the basis period
A tax computation indicating how the assessable profits (or adjusted losses) were calculated

The responsibilities of directors in a Hong Kong company

The directors of a company in Hong Kong bear the responsibility of ensuring compliance with initial and ongoing regulatory requirements. Not meeting the requirements could lead to penalties or legal action. It is recommended to seek the assistance of a professional firm to guarantee adherence to the statutory rules and regulations set forth by the Hong Kong Companies Ordinance