A Complete Guide to HK Company Share Transfers

August 1st, 2020 by

As part of its business life, it is quite common that the share capital of your company will be reorganized at some point in time.

This may be the case when you sell your business or attract a new investor

In this guide, we address the main considerations for HK company share transfers.

When do share transfers take place?

There are several circumstances in which you may transfer or sell all or part of the shares of your Hong Kong company:

  • a transfer of shares between existing shareholders in the context of an internal or group reorganization
  • a transfer of shares as part of the sale of your company

What are the preconditions for any share transfer?

There are several key actions that you should take before transferring the shares of your company:

  • Checking your company’s articles of association for any limitations or restrictions on share transfers
  • Reviewing your company’s shareholders agreement (if any) for the same possible limitations or restrictions (for example lock-up periods during which shares cannot be freely transferred)
  • Ensuring that appropriate board resolutions or general meeting resolutions authorizing the transfer have been passed
  • Verifying that the other shareholders have been offered to purchase the shares to be transferred and have waived such right (in case of the pre-emptive right granted to the other shareholders)

What documents are required for a share transfer?

You will need to prepare the following documents and information for any transfer of shares of your Hong Kong company:

  • The share purchase agreement, also known as equity transfer agreement (not mandatory but strongly recommended)
  • Bought and Sold notes, also known as Contract Notes
  • Instrument of Transfer
  • Application letter to be submitted to the Inland Revenue Department (IRD)
  • Latest audit report audit
  • Certified management accounts dated no more than 3 months for the company and its subsidiaries
  • If the company has not yet started a business, a letter confirming the same in replacement of the audit report and management accounts.

Are share transfers subject to administrative procedures?

Share transfers of Hong Kong companies are subject to very limited administrative procedures.

From a legal standpoint, the sale or transfer of shares of a Hong Kong company becomes effective on the date of signing of the relevant share transfer documents (meaning on the date indicated on the share purchase agreement, the bought and sold notes, and the instrument of transfer).

However, the name of the acquirer of the shares can only be entered in the Company’s Register of Members after a stamping procedure with the Hong Kong Inland Revenue Department (this stamping procedure is further detailed below).

Please note that share transfers do not need to be immediately reported to the Hong Kong Companies Registry.

Information regarding share transfers affecting a Hong Kong company is only disclosed to the Companies Registry once a year upon the filing of the company’s annual return (NAR1 Form).

What is the stamp duty applicable to share transfers?

Any transfer of the shares of a company in Hong Kong is subject to payment of a stamp duty levied by the Inland Revenue of Hong Kong.

This stamp duty is basically a tax on transfers and sales of company shares.

There are several key aspects that you should know about stamp duty:

  • The amount of stamp duty payable is 0.2% of the highest purchase price for the transferred shares or the net assets of your company. The amount of the company’s net assets are determined based on the latest audit report or management accounts of your company
  • There is a deadline to proceed with the stamping documents. If the share transfer documents are signed in Hong Kong, this deadline is two (2) days after the sale. The deadline is thirty (30) days if the share transfer documents are signed outside of Hong Kong.

Let’s look at a real-life example:

Clara owns all 100 shares of Gold Dragon Limited.

Clara sells all such 100 shares to Michelle for HK$ 1,000,000.

The net assets value of Gold Dragon Limited is HK$ 800,000 (based on its audited accounts).

Then the stamp duty payable on the share transfer is HK$ 1,000,000 x 0.2% = HK$ 2,000.

What are the penalties in case of late stamping?

Penalties for late stamping and payment of stamp duty are progressive.

The penalties start at twice and may reach up to ten times the amount of stamp duty normally due.

How to speed up the payment of stamp duty on a share transfer?

Legally speaking, the name of the buyer can only be entered in the company’s Register of Members (also known as Register of Shareholders) after the applicable stamp duty is paid.

In order to speed up the stamp duty process, we recommend that the purchase price for any transfer of the shares of your company be expressed in Hong Kong dollars.

If expressed in Hong Kong dollars, the Hong Kong Inland Revenue Department will be able to assess and calculate the amount of the stamp duty fee immediately on the same day.

On the contrary, if the purchase price is expressed in another currency then the Inland Revenue Department may take a few days to proceed with the currency conversion.

This will delay the completion of the transfer of your shares.

What happens at the end of the share transfer process?

Upon completion of a share transfer, the buyer receives a share certificate.

The company has two (2) months to issue such a share certificate.

Your company’s register of members must also be updated to include the name of the buyer within 2 months.

Finally, the Significant Controller Register of your company may also have to be updated.

How long does it take to complete a share transfer?

We have extensive experience handling share transfers and stamping procedures.

Preparing the application documents only takes a couple of hours if you use the services of Air Corporate.

In order to avoid any delay, you should anticipate the preparation of your company’s audit report and the latest management accounts.

Air Corporate can of course assist you with this part. Sign up with Air Corporate to get a clear share structure setup.

Focus on your business, we take care of the rest.


1. Who is responsible for paying stamp duty on a share transfer in Hong Kong?

The responsibility for paying stamp duty on a share transfer in Hong Kong falls on the purchaser of the shares.

2. Are there any restrictions on the transfer of shares in Hong Kong companies?

In general, there are no restrictions on the transfer of shares in Hong Kong companies, unless the company’s articles of association or any agreements between shareholders contain provisions that restrict share transfers.

However, certain types of companies, such as listed companies or companies in regulated industries, may be subject to additional regulations and restrictions on share transfers.

3. How long does it take to complete a share transfer in Hong Kong?

The timeline for completing a share transfer in Hong Kong can vary depending on a number of factors, such as the complexity of the transfer, the number of shareholders involved, and the responsiveness of the relevant authorities.

Typically, a share transfer can take anywhere from a few days to several weeks to complete. It is advisable to seek professional advice and plan ahead to ensure a smooth and timely share transfer process.

Certificate of Incumbency? What It Is & How to Get One

August 1st, 2020 by


Obtaining a Certificate of Incumbency can be an easy process if you have the right business support, but don’t just let a secretary take care of it for you and forget it.

It’s still a crucial document in your company’s formation, and you should read on to know what goes behind a Certificate of Incumbency.

You’ll never know when you might need it.

What is a Certificate of Incumbency?

A Certificate of Incumbency (also known as incumbency certificate) is a document issued by an independent third party; usually a regulated professional such as a lawyer, public notary, or certified public accountant.

The purpose of a certificate of incumbency is to independently confirm certain information about your Hong Kong company.

This information usually includes:

  • Name of your company
  • Identity of its directors
  • Identity of its shareholders
  • Identity of its company secretary
  • Identity of its ultimate beneficial owners (also known as UBO)
  • Date of incorporation
  • Registered address
  • Business address (if different from your registered address)
  • Amount and currency of its share capital
  • Number of shares

There is no prescribed format or standard wording for a certificate of incumbency.

If there is some specific information that you need to see reflected in the certificate, it is better that you expressly inform the third party that will prepare it.

Why do you need a Certificate of Incumbency?

There are many circumstances in which you may need a certificate of incumbency for your Hong Kong company.

Here are some examples:

  • Opening of a bank account: when your company applies for the opening of a bank account in Hong Kong (with HSBC, DBS, Bank of China, or Hang Seng Bank), the bank usually requires that you present an incumbency certificate in order to confirm the particulars of your company (names of shareholders, directors, UBOs, date of incorporation, registered address, business address)
  • Applying for a loan: a bank may also request that you provide a certificate of incumbency when your company applies for a loan as part of a background check
  • Applying for a public subsidy: the government may ask for a certificate of incumbency before a public subsidy can be awarded to your company
  • Visa application: certain jurisdictions may ask for a certificate of incumbency when your company applies for a business visa for some of your employees or legal representatives

Who can issue a Certificate of Incumbency?

There is no legal prescription on who can issue a certificate of incumbency for a Hong Kong company.

A person asking for a certificate of incumbency regarding your company will usually expect that it is issued by an independent third party (meaning by a person who is not a shareholder, director, or employee of your company).

It is usually expected that the independent third party is a regulated professional.

In Hong Kong, this includes lawyers, public notaries, or certified public accountants.

You should also know that the Hong Kong Companies Registry can also issue a document equivalent to a certificate of incumbency which is known as a Hong Kong Company Particulars Report.

A Hong Kong Company Particulars Report issued by the Company Registry provides a summary of the key information about any HK company (i.e. registered office address, principal place of business, share capital, name of current directors).

You can obtain a Company Particulars Report on the Companies Registry website at a cost of HK22.

However, the Hong Kong Company Particulars Report does not include updated information about your company’s shareholders or ultimate beneficial owners.

This is why you may still need the services of an independent professional third party when required to produce a Certificate of Incumbency for your HK company.

What does a Certificate of Incumbency Show?

A Certificate of Incumbency differs depending on the local institutions your business is subscribed to, but generally, a certificate of incumbency shows a brief version of the company’s Articles of Association.

That means you can expect to have the company name, legal vehicle, Shareholders, Directors, UBOs, and more.

Does a Certificate of Incumbency Expire?

A Certificate of Incumbency does not expire.

However, you will be periodically requested to provide your Certificate of Incumbency not older than 3 months.

Does a Certificate of Incumbency need to be notarized?

If your company’s certificate of incumbency is issued by a regulated professional (lawyer or CPA), it is unusual to require the certificate to be notarized.

In case the certificate of incumbency is issued by a third party other than a regulated professional, you may still be required to have it notarized.

In this case, it is more efficient to arrange the preparation of the certificate by a public notary from the beginning.

Where Can You Get a Certificate of Incumbency?

At Air Corporate, we can help issue your Hong Kong company Certificate of Incumbency.

Some of our team members include regulated professionals such as lawyers and CPAs who can issue any type of certificate of incumbency.

We also provide our assistance if you need to obtain your Company Particulars Report with the Companies Registry.

If you set up your company with Air Corporate or appoint us as your Hong Kong company secretary, our service includes the preparation and issuance of 1 certificate of incumbency for your HK company each year.

Register your company today and get your incumbency needs sorted with the experts.

Focus on your business, we’ll take care of the rest.


1. What information is included in a Certificate of Incumbency?

A Certificate of Incumbency normally contains the company’s name and location as well as the titles, addresses, and signatures of the current officers and directors. It could also have details on the individuals who are permitted to sign documents on the company’s behalf as well as the officers’ and directors’ power to do so.

2. How long does it take to obtain a Certificate of Incumbency?

The time it takes to obtain a Certificate of Incumbency can vary depending on the jurisdiction and the complexity of your company’s organizational structure. In some cases, it may be possible to obtain a certificate in a matter of days, while in others it may take several weeks or even months.

3. Is a Certificate of Incumbency the same as a Certificate of Good Standing?

No, a Certificate of Incumbency is not the same as a Certificate of Good Standing.

An organization’s ability to conduct business in a certain state and compliance with all relevant state rules and regulations will both be certified by a Certificate of Good Standing. However, a Certificate of Incumbency, it is certified by the legitimacy of a company’s executives and directors as well as their positions and power.

4. Can a Certificate of Incumbency be used for international business transactions?

Yes, a Certificate of Incumbency can be used for international business transactions. Many foreign banks and governments may require a Certificate of Incumbency as part of their due diligence process before engaging in business with a company.