In this post, we are discussing the annual obligations of your Hong Kong company.
It is pretty simple: each year, your company needs to go through administrative formalities:
Your company needs to renew its Business Registration Certificate.
This document confirms that your company is still registered with the tax authorities in Hong Kong, known as Inland Revenue Department.
The process is straightforward, your company will receive a new Business Registration Certificate by post and simply need to pay the relevant business registration fee in time.
Your company must prepare and file an Annual Return known as Form NAR1 with the Companies Registry of Hong Kong.
To put it simply, this form is a snapshot of your company’s organization on the date of its anniversary.
It allows the authorities to keep track of all updated information about your company such as its:
There is a certain time limit to file this Annual Return, meaning that you need to pay attention as progressive penalties will apply in case of delay.
What follows is important: the fact that your Annual Return is filed once a year on the anniversary date does not mean that any change regarding your company shall only be reported on that date.
On the contrary, most changes affecting your company must be reported within 15 days from their effective date.
This is for example the case of:
These changes must be reported to the Companies Registry as soon as they occur.
This is important because if you forget to report these changes in time and wait for the anniversary date to report them, the officers of the Companies Registry will notice the problem.
This will result in complications and delays which will make your life difficult and lead to penalties.
Your company should hold an Annual General Meeting, meaning a yearly meeting of the shareholders during which they review its financial performance and accounts, and discuss the overall strategy.
The Annual General Meeting may take place physically, which is often the case for relatively mature companies with several shareholders.
For smaller companies with a limited number of shareholders, this meeting will actually take place “on paper” with the shareholders simply signing the relevant resolutions.
Regarding the timing for the Annual General Meeting, it does not necessarily need to take place on the company’s anniversary date.
Actually, the date of the Annual General Meeting will be set depending on the date when your company ends its financial year.
Each year your Company will need to prepare and file a Profit Tax Return (Form BIR51) with the Inland Revenue Department of Hong Kong.
The type of information to be reported in this Return and ultimately the tax that your company will pay depends on many factors such as whether:
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