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Accounting, Auditing, and Taxes Maintenance Service in Hong Kong

Accounting Service

Let us handle the complicated and time consuming paperwork! You can focus on developing your business while we will take care of your financial statement and accounting records according to the Hong Kong standard.

After registering a company in Hong Kong, a minimal level of publicity will be given to its operations and structure. There are requirements to deliver documents for registration and certain information needs to be stored at the Companies Registry. Thus, it is important to look for the right incorporation service provider which can provide you with on-going support.

After registering a company in Hong Kong, a minimal level of publicity will be given to its operations and structure. There are requirements to deliver documents for registration and certain information needs to be stored at the Companies Registry. Thus, it is important to look for the right incorporation service provider which can provide you with on-going support.

Let us handle the complicated and time consuming paperwork! You can focus on developing your business while we will take care of your financial statement and accounting records according to the Hong Kong standard.

Section 373 of the Companies Ordinance

According to s. 373 of the Companies Ordinance, a Hong Kong company must keep accounting records that are adequate to explain transactions of the company, and to disclose the company’s financial position and performance with reasonable accuracy.

The record may be kept in hard copy form or electronic form. It is mandatory for a Hong Kong company to keep accounting records for 7 years from the end of the financial year. In the case the company fails to keep adequate records, director of the Hong Kong company shall be liable to a fine or even imprisonment.

Audit Arrangement

To check on directors’ work, a Hong Kong company is required to carry out auditing. Accounting records of a Hong Kong company is an internal checking on the company’s financial position while auditing is an independent check conducted by an external party. Requirements of audit report is listed in section 392 – 428 of the Companies Ordinance.

For details to arrange an audit report in Hong Kong, please contact our accounting team.

Having New Investors

Shares Allotment & Shares Transfer

After your company is registered, you may require additional funds to expand your business. To invite new shareholders or to increase overall share capital, there are some important points to note and these trivial steps can be time consuming. Hence, you need an incorporation agent who are willing to provide you with on-going support at an affordable cost.

“In practice, one has to queue up at the Inland Revenue Department for around 3 to 4 hours to complete the shares registration process even though all documents are prepared and completed.”

While company may increase its membership by allotment of its shares, selling your shares or business are usually more complicated. Transfer of shares is governed by Div 4 of the Companies Ordinance. For limited companies in Hong Kong, directors have discretion in approving or refusing a transfer. If the company refused registration of a transfer, the transferee and transferor can request for explanation. Alternatively, transferee and transferor can apply to the Court for an order.

Issue of share certificates on transfer

Once a person becomes a member or shareholder of the company. The company needs to issue a share certificate. A share certificate generally specifies the total number of shares held by a party. According to s.155 of the Companies Ordinance, there is a time limit of 2 months to issue new share certificates after the day on which the transfer is filed. In general, a Hong Kong company shall not register a transfer of shares if the transmission does not receive a proper instrument of transfer.

Profits Tax

Profits Tax - Deductible Expenses

Companies carrying on business in Hong Kong have to pay tax on profits which are generated in Hong Kong. The Assessable Profits means the net profits during the basis period while all outgoings and expenses incurred during the production of profits are generally allowed as deductions.

In determining the deduction from assessable profits, clients shall note that the followings are specifically not allowed:-

  • Private expenses which is not for the purpose of producing the profits;
  • Expense of a capital nature;
  • Expenses relating to premises not occupied or used to generate profits;
  • Contribution made to MPF scheme ( see our MPF page for details)

Want to know more? Contact our accountant for details.

Salary Tax

Salary Tax ( The 60 Days Rule)

The salaries tax exemption under section 8(1A) only applies if the taxpayer has performed his service in connection with his employment outside of Hong Kong. In determining whether the service shall be deemed as performed in Hong Kong, no account shall be taken of services rendered in HK during visits of less than a total of 60 days in the year of assessment.

In other words, a person is not required to pay salary tax to the HKSAR government if he visits Hong Kong for less than 60 days. However, we kindly ask our client to note that ‘visit’ is defined as a short or temporary stay at a place and one must only be temporarily staying in Hong Kong in order to qualify for this exemption.

Feel free to contact our incorporation staff for more information.

2019-20 Budget - Tax Measures & other Government support

Hong Kong Financial Secretary has set the 2019-20 budget on 27 February 2019. Below is a summary of the proposed budget.

Profit (Corporate) Tax

  1. Corporate Tax rate for the first HK$2 million of profits is reduced to 8.25%.
  2. Corporate Tax rate on remaining profits is 16.5%.
  3. Offshore profit is not taxable by Hong Kong authority.
  4. Losses can continue to be carried forward for each accounting year.
  5. Hong Kong has no capital gain tax and no withholding tax on payment.
  6. There is no tax on dividend.
  7. Business Registration licence fee is waived for financial year 2019/20.
  8. Increase funding for Technology Voucher Programme. The new ceiling is HK$400,000.
  9. Increase funding for the Dedicated Fund on Branding, Upgrading and Domestic Sales.

Salaries (Personal) Tax

The progressive tax rate for salary income remains as below for the financial year 2019/20.

Personal Income

Progressive Tax Rate %

First HK$50,000

2%

Next HK$50,000

6%

Next HK$50,000

10%

Next HK$50,000

14%

Remaining income

17%

Should you have any questions, feel free to contact our licenced CPA and Chartered secretary at info@getstarted.hk.

Need instant advice? Feel free to contact us! Call +852 2813 7600