Once a private limited company is formed in Hong Kong, it must comply with all applicable federal, state, and local laws, statutes, policies, and regulations.
As of December 2021, there were 1,358,360 private companies in Hong Kong. One of the filing requirements for these private companies is the annual return filing.
Company Compliance
Any local private company or foreign company formed and incorporated in Hong Kong is required to file annual returns in compliance with the Companies Ordinance.
This article will explain what is required when filing an annual returns in Hong Kong.
Table of Contents
What is a Hong Kong Annual Return?
The Companies Ordinance requires that all incorporated private limited companies local to Hong Kong file an Annual Return with the Companies Registry.
The Annual Return contains information on the structure and the particulars of a company and is part of the registration process when registering a company in Hong Kong.
Profits Tax Return
There is also another government return that needs to be filed with the Inland Revenue Department. This return is known as the Profits Tax Return. It’s important not to confuse the two returns.
The Hong Kong Annual Return vs. the Profits Tax Return
It should be noted that there are actually two filings labeled as ‘returns’. These include the Annual Return and the Profits Tax Return.
The Annual Return contains information about the company’s structure such as company directors, company secretary, and shareholders.
The Profits Tax Return is a different return altogether. This return is used to file the company’s taxes with the government.
Filing an Annual Return With the Companies Registry
Any private limited business incorporated according to the Companies Ordinance in Hong Kong is required to submit an annual return for registration listing the particulars of the company and signed by a manager, director, authorized representative, or company secretary.
What’s Included in the Annual Return
The annual return only spells out information regarding the company such as the registered office address, shareholders, directors, and secretary, and does not include any financial information.
Where and When to File the Annual Return
This return must be filed with the Registrar of Companies and delivered to the registrar within 42 days of the anniversary of the date the business was incorporated, which is also known as the company’s return date.
The statutory time limit regarding the delivery of the return can not be extended by the Registrar of Companies and there is no annual return waiver of fees.
Filing a Profits Tax Return With the Inland Revenue Department
Any company formed in Hong Kong must file the company’s taxes along with annual audited reports with the Inland Revenue Department of Hong Kong.
Documents that must be included with the filing are a profit & loss statement, a balance sheet, the auditor’s report, and a tax computation showing the profit or loss.
Profits Tax Return Notification
The Internal Revenue Department sends out a notice each year regarding the filing.
For companies that are newly incorporated, the notice is sent around the 18th month after the business was incorporated. The return then needs to be filed within a month of the notice.
What is Needed Before an Annual Return Can Be Filed in Hong Kong?
A business must first complete several requirements before filing an Annual Return in Hong Kong in order to have all of the information needed for the filing. The business must have met the following requirements:
- The business must have a registered address in Hong Kong that is not a P.O. Box
- A company secretary must be assigned who is an individual or a corporate company that resides in Hong Kong
- The company must have an appointed auditor unless the company is listed as dormant with the Companies Registry
- The company must have one shareholder who is a local person, a body corporate, or a foreigner. The shareholder must be over 18.
- There must be a director who is a local or a foreigner and over 18 years of age
- The company must contact the Companies Registry if there has been a change in the registered address, if there is a new company secretary or director, if any information on the director or secretary has changed, if the company has changed its name, if there are new resolutions that have been passed, if the statutory books are located anywhere other than the registered office, or if there is an allotment or issuance of new shares
- The business registration must be renewed one month prior to the expiration
- The Business Registration Certificate must be visible to all and located in a central area of the business
- The company must have held an Annual General Meeting within 18 months of the incorporation date and had subsequent meetings within every 15 months. The company’s financial accounts and annual returns must be accessible at these meetings.
- Business licenses must have been prepared as needed
Documents to Have on File
These records should be kept on file at all times:
- The company must have the following documents on file: share certificates, registers, current financial records, the company seal, minutes of all meetings, and Articles of Association
- The company must have the Incorporation Certificate and the Registration Certificate on file
- The business must have met the deadlines and the requirements of the Companies Registry and Hong Kong’s Tax Authority
- The business must keep up to seven years of financial records on file
- Business records must include records of income & expenditures, a paper trail for the entries, and a record of assets & liabilities.
How to File an Annual Return in Hong Kong
There are specific documents that need to be included when the Annual Return is delivered.
The original signed Annual Return Hong Kong form should be included along with copies of Hong Kong’s Certificate of Incorporation, Hong Kong’s Company Business Certificate, Hong Kong’s Company M&A, and ID cards of shareholders and directors.
Documents should also include the D1, D3, and R1 forms of the Company Incorporation Papers.
How to Submit an Annual Return in Hong Kong
The return can be submitted in one of two ways; either in hard copy form or electronic form. Either way, the Companies
Ordinance requires that companies file the Annual Return every year around the company’s anniversary date. The form used to file the Annual Return is the AR1 form.
Hard Copy
If submitting a hard copy, you can deliver the annual return in person or post the annual return along with a check for the annual registration fee, due at the delivery of an annual return, made out to ‘Companies Registry‘.
Electronically
You can also file the annual return electronically along with the annual registration fee through the Companies Registry portal which is accessible 24 hours a day.
What Happens if a Hong Kong Annual Return is Filed Late?
Failure to deliver an annual return or in cases of late delivery, the company and its officers will be affected in two ways.
One way is that of a penalty that will result in having to pay higher registration fees for the late delivery of an annual return to the registrar.
The other consequence is a possible prosecution and fines for the company and the officers for not meeting the requirements set forth by the Companies Ordinance.
Substantially Higher Registration Fees in Hong Kong For the Late Delivery of the Annual Return
The yearly registration fee is payable for the late submission and delivery of Annual Returns increases in substantial increments based on how late the Annual Return is filed.
The higher registration fees are based on the date of delivery and companies are still required from the company due to there being a no waiver of fees.
Late Fees
The renewal fee for the registration of Annual Return, if delivered more than the following days after the anniversary of incorp:
42 days after but within 3 months – HK$870
3 months after but within 6 months – Hk$1,740
6 months after but within 9 months – Hk$2,610
More than 9 months – HK$3,480
Contact Us
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FAQ
What happens if the yearly return of a local private company is delivered to the Registrar beyond the prescribed time period?
A higher registration fee results if the return of a local private company is delivered beyond the company’s return date. There are higher registration fees for the late delivery of returns for registration.
Do you still need to file a return annually for a Hong Kong-registered company if there has been no change in the details of the company?
Yes even if there has been no change in the particulars of the company since the last return was filed.
Are there any fees that need to be paid when submitting the return annually?
Yes, the registration fee for Hong Kong companies must be included along with the return. The annual registration fee payable is made out to the ‘Companies Registry’.
What is the anniversary date of a company?
The anniversary date of Hong Kong companies refers to the date the company was incorporated.
