Accounting & tax · Hong Kong companies
A Hong Kong company.
What has to be filed every year?
Many foreign founders trading with China hold a Hong Kong limited company. Registration is quick, but the company then has fixed annual obligations: an annual return, business registration renewal, audited accounts and tax returns. Here is the calendar and why it matters.
01 · The yearly calendar
Six recurring obligations
Exact dates depend on your incorporation date, financial year end and when returns are issued. These are the fixed items for an ordinary Hong Kong private limited company.
| Obligation | When | What it involves |
|---|---|---|
| Annual return (NAR1) | Within 42 days after each anniversary of incorporation | Filed with the Companies Registry. The on-time government fee is HK$105; late filing fees rise in steps from HK$870 to HK$3,480, and directors can face prosecution. [1] |
| Business registration renewal | Every year (or every three years), by the due date on the demand note | The Inland Revenue Department issues a demand note for the fee and levy. Display the current certificate at the business address. [2] |
| Audited financial statements | Every financial year | Prepared from the company’s books and audited by a Hong Kong certified public accountant before the profits tax return is filed. |
| Profits tax return (BIR51) | Usually issued in early April; first return around 18 months after incorporation | Normally due one month after issue; extended deadlines are available when filed through a tax representative. Attach the audited accounts and tax computation. [3] |
| Employer’s return (BIR56A) | Issued in April each year | Report salaries paid to employees and directors, and file within one month when a return is issued to the company. [4] |
| Company records | Ongoing | Keep the registered office, company secretary and significant controllers register up to date, and file changes such as new directors or addresses with the Companies Registry. |
02 · The audit
Why the audit drives everything
The profits tax return relies on audited financial statements, so the audit sets the pace for the whole year. An audit goes smoothly when the books are kept throughout the year rather than rebuilt at the deadline.
- Bank statements for every account the company holds, including any NRA or FTN account in mainland China.
- Sales and purchase invoices, contracts and shipping documents that explain each significant payment.
- Loans and capital: shareholder loans, capital injections and related-party balances, with supporting agreements.
- Expenses with receipts, and a clear record of any payments made on the company’s behalf.
Auditors and banks ask the same question: does the money match the business? Payments that cannot be explained by documents create delays in both places.
03 · Profits tax
Profits tax basics
- Two-tiered rates: for corporations, 8.25% on the first HK$2 million of assessable profits and 16.5% on the remainder. Among connected entities, only one can elect the lower tier. [3]
- Territorial basis: only profits arising in or derived from Hong Kong are taxed. An offshore claim is not automatic; it needs evidence of where the profit-producing activities took place.
- File even with losses or offshore profits: when a return is issued, it must be completed and filed by the deadline.
- Records: keep business records for at least seven years.
04 · China bank accounts
Why mainland banks care
If your Hong Kong company holds an NRA or FTN account in mainland China, the bank will review the company periodically. Typical requests include the latest annual return, a current business registration certificate and, once available, audited financial statements. A company with lapsed filings, or accounts that do not reflect the payments passing through its bank accounts, invites more questions and can put the account relationship at risk.
Keeping Hong Kong compliance current is part of keeping your China banking stable. See also why applications run into trouble.
05 · Mainland entities
If you also have a company in Shanghai
A mainland subsidiary has its own, separate obligations: monthly or quarterly tax filings, the annual report to the market regulator and an annual audit. See China company annual compliance for that calendar, accounting and tax services in Shanghai and our WFOE guide.
06 · Questions
Common questions
Does a Hong Kong company with no business still need an audit?
Generally yes: a Hong Kong limited company prepares audited financial statements every year even with little or no activity. A company that has been dormant throughout the period may qualify for exemptions, but that status has its own conditions and should be confirmed with your accountant.
When will my new company receive its first profits tax return?
For a newly incorporated company, the first profits tax return is typically issued around 18 months after incorporation. Keep proper books from day one so the first audit is not a reconstruction exercise.
Our profits come from outside Hong Kong. Do we still file?
Yes. Hong Kong taxes profits on a territorial basis, so profits sourced outside Hong Kong may not be taxable, but you still file the return and the claim must be supported by evidence of how and where the profits were earned. The Inland Revenue Department may ask questions.
How long must we keep records?
Business records sufficient to support the tax return should be kept for at least seven years.
Sources and scope
- Companies Registry: annual returns and late filing fees
- Inland Revenue Department: business registration
- Inland Revenue Department: profits tax and two-tiered rates
- Inland Revenue Department: employer’s returns
General information only. Fees, deadlines and exemptions change; confirm the current position with the Companies Registry, the Inland Revenue Department or your Hong Kong accountant.