How to keep your Hong Kong company in good standing?

Setting up a company in Hong Kong is straightforward and can be completed within one week. However in order to keep your Hong Kong company in good standing, you are required to meet 3 compulsory legal requirements. In the event you are unable to meet these requirements, the company may be struck off by the Hong Kong Companies Registry.

Secure a local registered address

Hong Kong Companies Registry requires every business, local or offshore, to have a local registered office address before it can be duly registered. The local registered address serves as an avenue for correspondence between you and the government authorities. All mails from the government will be sent to this address and for this purpose, the government requires the address to be operation and accessible during normal office hours. Tetra Consultants can provide you a local registered address. Our service includes receiving and collecting all business correspondences on your behalf. Once engaged, your business can use the address on business cards, letterheads, company stamps and other corporate correspondences. Additional services we provide include call forwarding and mail forwarding. For a minimum handling fee, we will courier the mails to your preferred address periodically.

Appoint a local company secretary

In order to comply with the Companies Act, you are required to appoint a resident company secretary immediately after incorporation. Tetra Consultants will serve as your company secretary and fulfil all duties required, including filing annual returns and providing reminder service prior to the filing deadline.

Accounting and tax obligations

• Book-keeping and maintaining records

All Hong Kong Companies are required to keep proper records and accounts of business transactions. Your company must maintain proper records of its financial transactions and retain the source documents, accounting records and schedules, bank statements and any other records of transactions connected with your business. Each company is free to choose any month end as its accounting year end date however the first accounting period can cover a period no longer than 18 months from the date of incorporation. Once the accounting year end date is chosen then the company must produce its accounts every 12 months using the same accounting year end date. The tax year end in Hong Kong is 31 March and we therefore suggest to clients that they select 31 March for their accounting year end date to coincide with the date when tax returns will be issued by the Hong Kong tax authorities.

• Appoint Auditors

The Hong Kong Companies Act states that every active company must get its financial statements and accounting records audited by an auditor on an annual basis.

• Annual Return Fillings (Form NAR1)

Unless your company has applied for a dormant status, you are required by law to file annual return (Form NAR1) with the Companies Registry on the anniversary of its incorporation. The annual return (Form NAR1) details the corporate structure of the company including details of the shareholders, directors and company secretary. Failure to comply with this will result in late penalties and the company directors and shareholders are liable to prosecution and fines. Tetra Consultants will timely and accurately prepare and file the annual return on behalf of our clients.

• Renew Hong Kong Business Registration

Your Hong Kong company is required to renew your business registration annually. Tetra Consultants will provide reminder service prior to the deadline.

• Tax Filling

Your Hong Kong company is required to file annual tax return with the Inland Revenue Department within one month from the date of notification. In order to accurately file annual tax return, Tetra Consultants will assist you to prepare and submit balance sheet, auditor’s report, profit and loss account and tax computation.

• Reporting of remuneration paid to employees

Your Hong Kong company is required to submit a return to the Hong Kong tax authorities before 30 April each year detailing the remuneration paid to your employees during the year to 31 March. If you have paid no remuneration, you are still required to file and inform the government of the same. Tetra Consultants will timely and accurately complete your firm’s financial statements, corporate tax returns and managing auditors on your behalf and without the need for you to travel.