Once after incorporation, a Hong Kong incorporated company is required by the Hong Kong Companies Ordinance and Inland Revenue Ordinance to update its books of accounts, prepare financial statements and arrange audit of its annual financial statements and file certain returns with both the Hong Kong Companies Registry (company registration authority) and Inland Revenue Department (tax authority). This article aims to explain briefly those compliance requirements and the related costs.
The annual costs to be expected to maintain a private company limited by shares registered in Hong Kong in good standing could be divided into two parts. The first part is fixed and considered to be the basic or minimum costs required and is fixed and the second part is varied and determined by the nature of the business, volume of transaction and amount of turnover and a few other factors.
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Annual Maintenance Costs After a company is officially registered in Hong Kong, it will have certain compliance requirements. These compliance requirements could be divided into two categories, one with fixed fees and another with variable fees, as listed in the table below. The total amount represents the minimum costs to maintain a trading company (with a turnover of less than USD650,000) in good standing in Hong Kong.
Note: 1. The annual retainer for provision of Company Secretary covers the following services: (1) Provision of one Corporate Company Secretary (Kaizen Secretaries Limited acts as Company Secretary); (2) Preparation and filing of Annual Return; (3) Filing of notice of change of registered office and business address; preparation of minutes; (4) Filing of notice of change of directors and secretary. 2. The annual cost for provision of Registered Office covers the following services: (1) Provision of one street address as Registered Office of your Hong Kong company; (2) Forward government mails to any location specified by clients. Please note handling fee of USD3 plus actual postage will be charged for each batch of mails forwarded. (3) Please note the Registered Office is not to be used for business purpose unless otherwise agreed by Kaizen.
3. The annual maintenance/compliance fees are expected in the second year and thereafter and the variable fees are for general reference only and represents the minimum you should budget for the purpose of maintaining a Hong Kong company in good standing. |
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Annual Maintenance Fee Dates and Penalties (1) Renewal of Registered Office and Company Secretary Our Company Secretary and Registered Office services are to be renewed on the anniversary of incorporation and fees are to be paid 1 month before the anniversay date. (2) Filing of Annual Return An Annual Return is required to be filed within 42 days after the anniversary of incorporation together with the payment of a statutory filing fee of HKD105 (USD14). Consequences of Non-filing or Filing Late
(3) Renewal of Business Registration Certificate The Business Registration is due for renewal around one month before and after it is expired. The current business registration fee is HKD2,250 (USD290) per annum. Late renewal will attract a penalty of HKD300 (USD40). Further delay will result in court proceeding and extra fine. As the filing of Annual Return, renewal of Business Registration Certificate and Registered Office and Company Secretary services are due at the same time. Therefore, we normally send out notice of the annual renewal for all these items two months before they fall due and payment is expected at least 3 weeks before due date so as to allow us time to process the annual renewal. Please note that our primary means of communication is email so please make sure we are being notified immediately should you change your email address. (4) Annual Statutory Audit and Filing of Profits Tax Return If a company choose to have its accounting year ended on 31 March, it is required to have its financial statements audited and the profits tax return filed with the Inland Revenue Department (Hong Kong Tax Authority) on or before 15 November the same year. Late filing of Profits Tax Return will initially result in a fine of HKD1,200 (USD155) and further delay may result in court proceeding and extra fines. |
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