If you are a person who has a private company limited in Hong Kong, then you must be familiar with compliance with annual filing requirements. The annual filing requirements should be completed and then submitted to the inland revenue department for processing.
Hong Kong companies are made with the permission of Hong Kong authorities; that’s why there are some compliance obligations that the owners of Hong Kong companies should follow and complete when annual filing starts.
Here, we will guide you to have complete knowledge about the process, how it works, and which things are needed to complete the process of companies ordinance.
If you want to open a new Hong Kong company, you have to follow the following things:
These things are the primary ones that should be followed by Hong Kong private limited companies because it enables the inland revenue department of Hong Kong to keep a record of every company relocating to their country. Moreover, in this way, they will know whether each private company limited in Hong Kong is working correctly or not.
Now we will discuss the compliance obligations by the inland revenue department in detail for your complete understanding.
The director’s report is made with a combination of annual accounts records. Additionally, the company’s ordinance will help give a list that tells which report contents are added. Finally, one more list will be added, containing no contracts a particular private company made with other companies.
That list tells about the director’s material interest. Also, it signifies the progress of a private company in Hong Kong whether it made good relations with other companies, including foreign companies.
The next thing on the list of obligations is the annual accounts in which two lists will be made. One list will elaborate on the profits of the company. Another list will create a balance sheet about the profit and loss account of a specific private limited company.
That balance sheet must be audited by the Hong Kong registered auditors, which are the public accountants. Once auditing is completed, that balance sheet will be shown to the company’s shareholders in a general meeting 18 months after the company’s incorporation date.
After that, the company’s balance sheet can be presented to the shareholders at least once in the whole year. Moreover, the private limited companies should file their accounts recording receipts to the inland revenue department ird.
Every Hong Kong private company should make a schedule for an annual general meeting. Only those advanced companies that are cost-effective and flexible toward Hong Kong can be eligible for dispensing annual general meetings.
The IRD Department of Hong Kong has made criteria for when your company will be eligible for giving up on the annual general meeting. Those are given below:
Today Hong Kong has made this policy to give up on the annual general meetings, but in the past, even if one has a single-member company, you have to call for an AGM. These meetings are essential for companies’ registry records because the director will approve the accounting records in that meeting.
Any private limited company in Hong Kong needs to keep a record of all the conferences held in the company along with the calculation of minutes. The meetings it includes are among members of the company, directors, committee officers, etc.
According to the country of Hong Kong companies ordinance, each private limited company should keep the transfer registers along with directors and company secretary in Hong Kong. All these registers should be at the registered office address of a particular company.
Once you understand all the obligations, you come to know that there are many other things related to private companies’ compliance in Hong Kong. So now we will talk about what things should be told to the companies registry if you change anything in Hong Kong companies.
You should tell the company’s registry about particular changes in the company incorporated in Hong Kong. It comes out for various things as given below:
The Hong Kong companies should file an annual return minimum for one time in a year to the companies registry or inland revenue department. If private companies have made some changes in the company’s registered office or some other thing, you have to file the annual returns soon. It contains the following items:
Once the return file is made, it will be signed by a company director. Then the company secretary will submit it to the Hong Kong company’s registry 42 days after the first anniversary of business registration.
Filing annual returns must be done within 42 days after the general meeting each year, along with the guarantee of public companies. There are various things involved in the annual filing requirements, which we will discuss below.
Suppose you are filing the annual return to the company’s registry. In that case, private companies in Hong Kong under the companies ordinance need to file the whole process along with an authorized representative.
If your company is a dormant company, you don’t have any financial statements during the year after the incorporation date of the company. As a result, your company will be excluded from filing an annual tax return.
The annual return is a specified form of having the company’s particulars, such as the company’s registered office address, directors, company secretary, shareholders, etc. You don’t have to file the financial statements within the company’s registry.
If you haven’t provided the required information to the company’s registry about your Hong Kong company, you have to pay higher registration fees. Late submission after the due date enables the Hong Kong registered auditor and officers to fine you.
According to the Hong Kong accounting standards, every Hong Kong company should file a tax return together with audited accounts on an annual basis to the IRD of Hong Kong. The IRD of Hong Kong has to notify and issue the tax return filing to the private companies every year on the 1st of April.
To the newly commenced business, the IRD sends the notification after the 18th month of the incorporation date. Once getting the notification, the company must file the tax return within one month. Moreover, the companies can request an extension if they know they will not be able to file the annual tax return after the due date.
Some documents should be attached to the annual tax return file, and they are given below:
If you want that your Hong Kong company should have a valid name, then you have to follow the following requirements. The company name change includes:
All of these things are considered the same, and they will go through the same process for sure. Hong Kong business registration requires some valid company names, and they made a law for it. The company name’s law limits the Hong Kong resident, and foreigners who want to make their business registration done should follow these rules.
The company name should be only in English or Chinese language. However, it can be done with a mixture of English and traditional Chinese. Additionally, every private limited company name should end with the word “limited.”
The articles of association make the company’s constitution prove to be very important for business progress in Asian financial markets. It requires the following things:
The amendment in the articles of association is not very easy because you have to pass the special resolution among company shareholders to approve it together. However, if 75% of the company’s shareholders support the resolution according to the classes of shares, then the change can happen.
The business registration certificate should have the following things to be processed entirely:
Annual filing requirements of employer’s return need pensions and related forms along with payroll of at least seven years as an employee in a specific Hong Kong company. Moreover, notify the ird department of Hong Kong about any change in employee’s particulars.
The tax computation of annual return within profits tax return is done by inland revenue department ird even though you are a Hong Kong resident. Once the company has made a file for an annual return of an employee, it will be handed to the employee.
Online forms are available on the official website of IRD Hong Kong. After filing that employer’s return form, it will be submitted to IRD in physical condition after the transaction date. Annual tax returns and profits tax returns are a complete process that takes some time.
Once it is done, the employee will get notifications if they have approved their request. Typically the IRD of Hong Kong issues the employer’s return on the first business day of April on an annual basis as annual return.
If you are the first time getting an employer’s return, send the completely filled form to the IRD of Hong Kong and if you didn’t receive your form, then again notify the IRD in mid of April. If an employee’s return is failed in submission, you have to pay higher registration fees again and move forward with heavy penalties.
Hong Kong offers safety to the employees who are working in their country by giving them the employment ordinance. It contains statutory holidays, maternity protection, paid annual leave, payment of wages, sickness allowances, etc.
Hong Kong provides all the facilities to the employees regardless of their nationality. It includes various facilities and laws given below:
The fulfillment of corporate compliance requirements is the responsibility of the director or directors of the Hong Kong company. They have to make sure that either initial and final compliance needs are met with business progress or not. This process is vital for working in Hong Kong.
The Hong Kong company with non-compliance leads to heavy fines or even prosecution. That’s why business pros recommend hiring a professional firm that will help the directors to go through the process easier while working in Hong Kong.
In a financial year, there are many things that the director has to handle for getting proper compliance from the CR and IRD of Hong Kong. The professional firms are experienced in this work, and they know to make your Hong Kong company comply with the rules and regulations of the Hong Kong company’s ordinance.
We hope this article will ease you out after reading it thoroughly. Best of luck!