Procedures and Fees for Transfer of Shares in a Hong Kong Company-Company Formation_Trademark Registration_Tax Service - Hong Kong CPA

Hong Kong Company Share Transfer Procedures and Fees

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Hong Kong Company Share Transfer Procedures and Fees

Unless otherwise indicated, the company mentioned in this quotation refers to a private company limited by shares and public non-listed company incorporated in accordance with the Hong Kong Companies Ordinance.

Our fee for handling the transfer of shares (equity) of a company registered in Hong Kong is USD450 for the first and USD200 for the second transfer and thereafter. Our fee covers the preparation of share transfer documents (other than share transfer agreement), stamping of transfer documents and payment of stamp duty, but excludes the stamp duty.

For the purpose of share transfer in Hong Kong registered company, a copy of the Articles of Association, Certificate of Incorporation and a copy of the latest audited financial statements (or management accounts) are needed. If there is a share transfer agreement, it will also need to be provided.

Share transfer documents will be stamped by electronic stamping (E-stamping). Traditional stamping on original signed documents is available for an extra service fee of USD50 if the transfer documents cannot be stamped by electronic stamping or as requested by client.

It takes around 2 to 3 working days to complete the transfer procedures. Rush service is available where the process for transfer of share could be completed within the same day with an extra fee of USD150.

In accordance with the Hong Kong “Stamp Duty Ordinance”, if the share transfer is a transfer between members within a group of companies, stamp duty on the transfer can be exempted upon application. Kaizen can handle the application for exemption upon request.

The fees stated in the quotation are for general reference only and is subject to change from time to time.

Services and Fees for Share Transfer

Our fee for handling the transfer of share(s) (for Electronic Stamping only) in a private company registered in Hong Kong is USD450 for the first transfer and USD200 for the second transfer and thereafter by E-stamping. If E-stamping is not applicable, an extra service fee of USD50 will be charged.

The fee quoted above covers the following services in particular:

(1)	Answering client’s questions regarding the transfer of shares;
(2)	Review Articles of Association of the subject company and the Register of Members.
(3)	Review financial statements, calculation of stamp duty payable and advise client of the same;
(4)	Prepare Minutes of Directors’ Meeting and Share Transfer Instrument and Bought and Sold Note.
(5)	Arrange to have the Transfer Instrument and Bought and Sold Note executed and stamped by the Hong Kong Stamp Duty Office and payment of Stamp Duty.
(6)	Arrange to cancel the old share certificate held the existing shareholder and issue new share certificate to the new shareholder (and existing shareholder).
(7)	Update the Register of Members.

Note:

(1)	The transfer of shares from one shareholder to another person is counted as one transfer. The transfer of shares from one person to two persons or from two persons to one person are counted as two transfers.
(2)	Stamp duty is not included in the fees stated above. A detailed illustration of the calculation of stamp duty is provided in Section 5 of this quotation.
(3)	Same day service is available for an extra fee of USD150.
(4)	If a sales and purchase agreement is executed, the agreement should also be stamped.
(5)	Out-of-pocket disbursements are not included in the fee quoted above.

Payment Terms and Methods

Upon receipt of your confirmation of engagement, we will issue and send an invoice together with the wiring instructions to you for your settlement. When you arrange the payment, please put our invoice number of account number in the message section and then send email a copy of the remittance receipt to us for our records. Because of the nature of service, we require full payment in advance. And once the service is commenced, no refund of service fee will be made.

We accept cash, HKD check, TT and credit card through Paypal. An extra handling fee of 5% will be charged if paid by Paypal.

Materials needed for Share Transfer

For the purpose of share transfer, we need to have the following materials:

(1)	Copy of the Certificate of Incorporation, Articles of Association and the latest the latest Annual Return.
(2)	The latest Register of Members.
(3)	The name of the seller (Transferor).
(4)	The number of shares to be transferred and the value of consideration.
(5)	A copy of the passport or identity card (Hong Kong resident only) and residential address proof of the transferee.
(6)	The original copy of the share transfer agreement, if any.
(7)	A copy of the latest audited financial statements and/or the management accounts prepared up to a date within 3 months of the transfer.
(8)	A copy of consolidated financial statements (where the company is a holding company) or a copy of financial statements of each of its subsidiaries.
(9)	Where the company holds any real estate, a detailed list of properties.

The identification document of the transferee must be certified by Kaizen or a lawyer, accountant or attesting officer.

Procedures and Time Frame for Share Transfer

In a smooth case, a transfer of share can be completed in two days (with the electronic stamping) or three days (with traditional paper stamping) after Kaizen receives the duly signed documents. Same day service is available for a fee of USD150.

Step	Description	Day
1	Client confirms with Kaizen of the engagement for transfer of shares, and at the same time deliver to Kaizen the materials listed in Section 3.	1
2	Kaizen reviews the materials provided by client and confirm with client the amount of stamp duty payable. (Note 1)	1
3	Kaizen issues and send its invoice (for service fee and stamp duty payable) to client and client settles our invoice.	Client schedule
4	Kaizen arranges to verify the identification documents of the transferee. Or client can arrange certification and deliver the certified copy to Kaizen.	Client schedule
5	Kaizen prepares share transfer documents and deliver them to client.	1
6	Client signs the share transfer documents and return the signed documents Kaizen	Client schedule
7	Kaizen arranges to have the share transfer documents stamped	1
8	Kaizen prepares new share certificate, updates the register of member and register of significant controller.	1
9	Kaizen delivers capital increase documents to client for retention/safe custody. Process completed	1
Total: 2 days up

Note:

(1)	The amount of stamp duty payable calculated by Kaizen based on the material provided by client could be different from that assessed by the Stamp Duty Office. The final amount is to be determined by the Stamp Duty Office. If the amount determined by the Stamp Duty Office is higher than that calculated by Kaizen, client will need to make up the difference.
(2)	In a complicated case where Kaizen is not able to determine the amount of stamp duty payable, Kaizen may need to send the transfer documents to Stamp Duty Office for assessment. This will increase both the time and costs.
(3)	A transfer of share(s) is not required to be registered with the Companies Registry and therefore the change of shareholder is not readily available for public inspection in the Companies Registry. Instead, any such changes are reflected in the next Annual Return.
(4)	After the share transfer process is completed, the company should send an updated Register of Member to its banker to update its records with the bank.

Calculation for Stamp Duty

In accordance with the Hong Kong “Stamp Duty Ordinance”, the share transfer documents need to be stamped and a stamp duty at 0.1% on the amount of consideration or net assets of the company (whichever is higher) will be charged and collected from the transferor and transferee respectively. The total stamp duty payable therefore is 0.26%.

The amount of stamp duty payable is calculated as following:
(Amount of consideration (or net asset value of the subject company x percentage of interest to be transferred) x 0.1%) x 2 + HKD5

The HKD5 is applicable to each document to be stamped. In the case where there are duplicate bought and sold note, an additional stamp duty of HKD5 will be payable.

For example, Mr. A is transferring 10,000 shares, representing 50% of shareholding on Hong Kong Sample Company Limited to Mr. B for HKD100. The financial statements of Hong Kong Sample Company Limited shows it has net total assets of HKD1,000,000. Each of Mr. A and B will need to pay stamp duty as calculated below:
(HKD1,000,000 x 50% x 0.1%) x 2 + HKD5 = HKD1,005

In case where the transferor and transferee are member companies of the same group, the company can apply for exemption from payment of stamp duty in accordance with the Hong Kong “Stamp Duty Ordinance”. Kaizen can help with the application for group relief of stamp duty. Our fee for this service will be quoted upon request.

Electronic Stamping Condition

The stamping of share transfer documents by E-stamping has the following limitations:

(1)	The share transfer involves the transfer of the full beneficial ownership.
(2)	If the value of share(s) or consideration is stated in a currency other than Hong Kong dollar, it is required that the share values be converted to their equivalents in Hong Kong dollars.
(3)	Late stamping not exceeding 4 years with no request for remission of penalty.
(4)	Adjudication on nominee agreement or sales and purchase agreement cannot be requested.

Documents to be Returned to Client after Processing

The following documents will be returned to client as proof of transfer:

(1)	Stamped Instrument of Transfer and Bought and Sold Note;
(2)	Stamped share transfer agreement (if applicable);
(3)	Updated Register of Members;
(4)	Updated Register of Transfers;
(5)	Confirmation of significant controller and register of significant controller;
(6)	Board minutes/written resolutions authorizing the transfer(s);
(7)	Share certificate(s).

Hong Kong Company Share Transfer Procedures and Fees

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