Accounting Services in Hong Kong: What Company Must File and When

Every Hong Kong company must keep accounting records, prepare financial statements, have them audited by an independent HKICPA-registered auditor, and file a Profits Tax Return. Unlike other jurisdictions, Hong Kong offers no audit exemption based on company size or turnover. Every company needs to be audited every year.  Get Started HK helps founders and SMEs organize their bookkeeping, reconcile bank transactions, prepare year-end accounts and keep their company ready for audit and tax compliance from start to finish.

Core Insights

• Every Hong Kong company needs to be audited every year regardless of size. Hong Kong grants no audit exemption based on turnover, headcount or asset size. Under Section 405 and 407 of the Companies Ordinance (Cap. 622), Only a dormant company may be exempted from audit, and the audit must be signed by a CPA (Practising) registered with the HKICPA.
• Accounting records must be kept for seven years, under two separate laws. Section 373 of the Companies Ordinance and Section 51C of the Inland Revenue Ordinance both impose a 7-year retention duty. Penalties reach HKD 300,000 under the Companies Ordinance and HKD 10,000 per return under the IRO.
• Your filing deadline depends on your financial year-end, not your incorporation date. Form BIR51 (Profits Tax Return – Corporations) is issued each April and due within one month. Under the IRD’s block extension scheme, a 31 December year-end (“Code D”) gets until mid-August, and a 31 March year-end (“Code M”) until mid-November, but only if a tax representative is appointed. You can appoint Get Started HK to apply for an extension. 
• Profits tax is 8.25% on the first HKD 2 million, 16.5% above. The two-tiered regime continues unchanged for 2026/27. The one-off 100% reduction for the 2025/26 year of assessment is capped at HKD 3,000 per business and was gazetted in May 2026. No application is needed; the IRD applies it to the final assessment.
• Offshore profits claims are won or lost in the accounting records. If you intend to claim offshore-sourced profits exemption, your records must evidence where the income-generating activities physically took place. Professional review makes them defensible.

Requirements	Rules	Deadline
Profits Tax Return	Companies file Profit Tax Return Form BIR51, issued in bulk on the first working day of April	1 month from date of issue
New Companies: 1st Tax Return	IRD issues the first profits tax return roughly 18 months after incorporation or commencement of business	~18 months, then 3 months to file
Profits Tax Rate	Two-tiered regime for qualifying companies	8.25% on first HKD 2million; 16.5% above
2025/26 tax reduction	One-off 100% reduction of final profits tax; applied automatically, no application required	Capped HKD 3,000 per case
Extensions	Only available where a tax representative holds written authorisation	Application before the submission date
Accounting records	Every Hong Kong company must keep records that correctly	Retain 7 years
Statutory audit	Required for all Hong Kong companies except to those applied for dormancy to the Government. Generally, no exemption for size or turnover	Annually
Who can audit	Must be a CPA (Practising) registered with the HKICPA; Overseas / other jurisdictions accountants cannot sign	–

5 Things Most Hong Kong Company Owners Get wrong

1. The “reporting exemption” is not an audit exemption

Hong Kong has no small-company audit exemption. All companies incorporated in Hong Kong must have their financial statements audited. The only exception is a company that has been formally declared dormant by special resolution delivered to the Companies Registry.

The confusion comes from two sources.

First, the reporting exemption under sections 359 to 366 of the Companies Ordinance (Cap. 622) allows eligible small private companies to prepare simplified financial statements under the SME-FRF/SME-FRS. This means fewer disclosures, not fewer audits.

Second, the Inland Revenue Department does not require audited accounts to be submitted with Form BIR51 where gross income does not exceed HKD 2 million. Owners frequently read this as “I don’t need an audit.”

In over 15 years of dealing with the Inland Revenue Department, we have seen this misreading repeatedly. The audit obligation sits in the Companies Ordinance and is enforced by the Companies Registry,  not in the Inland Revenue Ordinance. The IRD’s filing practice is an administrative concession about paperwork; it cannot waive a duty imposed by a different statute. The audited accounts must still be prepared and retained, and the IRD can call for them at any time.

2. Your annual return deadline has nothing to do with your financial year-end

Most owners assume every filing clusters around one annual event handled by their accountant. The annual return (Form NAR1) doesn’t. It goes to the Companies Registry within 42 days of your incorporation anniversary. It is a date fixed by whenever you happened to register, usually months away from your year-end and your tax return. For example, a company incorporated on 8 August files by mid-September every year, whether its tax submission runs to 31 December or 31 March. Two cycles, two regulators; being current on one tells you nothing about the other.

3. Switching accountants mid-year can cost you your extension

Hong Kong’s Block Extension Scheme attaches to your tax representative’s client list, not to your company. Tax representatives apply for filing extensions as a block, on behalf of every client on their annual list. Your company does not hold the extension in its own right.

This is why switching your accounting service in Hong Kong mid-season carries risk. Your extended deadline depends on an administrative step your new accountant must remember to take, not on anything your company has already done.

Each year the IRD sets a cut-off date. Clients appointed on or after that date are not included automatically in the block application, so two separate filings are needed: your incoming firm must notify the Inland Revenue Department of the new appointment, and your outgoing firm must report that it has ceased to act. If either notification is missed, the extension is lost and your return falls due on the original filing date.

4. Filing electronically buys an extra month, at no cost

You can get one extra month by filing electronically. If a tax representative acts for you, and your return, financial statements and tax computation are all filed electronically, you can get a further one month on top of the standard block extension date. There is no fee. The only change is how the documents are submitted.

You must apply before the original due date. This is a decision to make at the start of the filing cycle, not a way out once the deadline is close.

The extra month only holds if every e-filing condition is met. If they are not, the IRD treats the further extension as void ab initio,  as if it had never been granted at all. The normal extension date applies instead backdated.

So a company that planned around the extra month and then failed to complete a fully electronic submission is not just short of a concession. It is late, measured against the earlier date it thought it had moved past. Many accounting firms never mention this option, simply because paper filing is what they have always done.

5. “Dormant” is a legal status you must apply for, not a description of your activity

A company is only dormant once its shareholders pass a special resolution and deliver it to the Companies Registry under section 447 of the Companies Ordinance (Cap. 622). Dormancy starts when the Registry receives it and cannot be backdated. Until then, the law treats your company as active, and audited financial statements are required every year, however empty the bank statements are.

This catches holding and shelf companies. The owner stops trading, files nothing, and assumes the audit requirement ended with the business activity. Years later, usually when selling the company or opening a bank account,  they find audits were owed for the whole period and must be prepared retrospectively. Fixing it costs far more than the resolution would have.

Dormancy is not permanent either. It ends automatically the moment the company enters into an accounting transaction, apart from a few permitted exceptions, and the audit obligation resumes from that point. Two limits: dormancy does not remove your tax obligations. If the IRD issues a Profits Tax Return, you must file it.

What’s Legally Required

Your company has three separate obligations, set by two different regulators. They are not one job, and they do not all go to the same place.

Owners tend to bundle everything into “doing the accounts.” That is usually where something gets missed.

Accounting records answer to the Companies Registry under Cap. 622. You need proper books, sufficient to show and explain your transactions and to allow financial statements to be prepared from them, and you must retain them for 7 years.

Statutory Audit also falls under Cap. 622: an annual audit by a CPA (Practising) registered with the HKICPA. There is no small-company exemption here. The only companies that escape it are dormant ones.

Profits Tax Return is the Inland Revenue Department’s requirement, under the Inland Revenue Ordinance. That means Form BIR51, submitted with your audited financial statements, a tax computation, and any applicable supplementary forms.

What to Look For in an Accounting Service in Hong Kong

Ask who signs the audit report. This is the first question, because it’s the one legal requirement nobody can work around. Many providers advertising “accounting and compliance” do bookkeeping only and refer the audit out. That’s perfectly normal, but you should know the name of the practice doing it, and whether their fee is inside or outside your quoted package. A provider who is vague here is quoting you an incomplete price.

Check the TCSP licence if they also act as your company secretary or registered office. Providing company secretarial services, a registered address, or nominee directors is “trust or company service business” under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615), and it requires a licence. Licences run three years, and there’s a public register at tcsp.cr.gov.hk you can search in under a minute. 

Establish who owns each deadline in writing. Your NAR1 runs off your incorporation anniversary, your audit off your financial year-end, your BIR51 off the IRD’s issue date. Three clocks and the gaps between them are where filings get dropped. A good provider will hand you a calendar unprompted. A weak one will say “we’ll just take care of it.”

Why Using AI Entirely May Not Work for Government Compliance

AI is genuinely useful across much of this work, and this section below is not an argument against using it. In fact, our accountants also use it to smoothen the work. But Hong Kong’s compliance regime is built on a foundation software cannot occupy.

• Your financial statements must be audited by a CPA (Practising). There is currently no small-company or software exemption, and no model can hold a practising certificate. Where AI hits a wall in Hong Kong compliance, it’s almost never because the task is too hard and simply it is because the law names a licensed human.
• Filings require an accountable signatory. When a service provider files your profits tax return, the IRD requires a signed confirmation from you that the return and supporting documents are correct and complete. The system is built around identifiable parties who can be held responsible.
• Liability lands on people. Late delivery of an annual return is an offence under section 662 exposing the company and every responsible person, your directors or your company secretary personally. A tool cannot absorb that risk, and a confident wrong answer costs you exactly as much as a confident wrong answer from a human, minus the insurance and the professional accountability.
• The judgement calls are the expensive part. Offshore profits claims, deductibility, related-party pricing, going concern. These are positions you may have to defend to an assessor years later, and what protects you is a documented reasoning trail someone qualified stands behind.

Why You Need a Professional

The honest framing isn’t AI versus a professional. AI is genuinely good at the volume work: categorising transactions, reconciling, chasing missing receipts, drafting schedules, first-pass document review. Used well, it compresses the part of your compliance bill that scales with transaction count.

What it cannot supply is the three things you’re actually paying a firm for: a signature the government will accept, a judgement someone professional will defend on your behalf, and a calendar that isn’t yours to forget. Those are the deliverables.

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Frequently Asked Questions

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Many of our accounting clients first come to us when they register a company in Hong Kong — if you’re at that stage, our incorporation packages include guidance on getting your accounting set up from day one.