7. Maintenance of a HK Company
All Hong Kong companies are required to file Annual Return and renew its Business Registration Certificate every year.
- Annual Return must be filed to Hong Kong Companies Registry within 42 days of every anniversary
- Late filing will subject to penalty
- The purpose of this document is to report the up-to-date company structure to Hong Kong Government
- It is compulsory to file this document even if there was no change in the company structure
- Any limited companies are obligated to report to the Company Registry of any changes of the company structure within 14 days after the change. Typical changes of company structure include but not limited to:
- Change of Director or Company Secretary
- Transfer of shares
- Change of Company Name or registered office addres
Section 51C of the Inland Revenue Ordinance requires every company in Hong Kong to keep sufficient records in the English or Chinese language of its income and expenditure to enable the assessable profits to be readily ascertained. Such records shall be retained for a period of not less than 7 years.
A Hong Kong limited company usually needs to file two tax returns each year
- An Employer's Return of Remuneration Pensions to report employees' salaries
- Profit Tax Return to report the profit of the company
An Employer's Return of Remuneration Pensions:
- It has to be filed in April every year
- The fiscal year is fixed from April 1 to March 31 of following year
- The employer should complete and file the Employer's Return for each employee in the company irrespective whether the employee rendered service inside or outside of Hong Kong
Profit Tax Return:
- The first Profit Tax Return will be issued by Inland Revenue Department 18 months after the date of incorporation
- The profit tax return will be filed every year afterwards
- The company has the right to choose their own financial year
- The Profit Tax rate in Hong Kong is 8.25% for the first HK$2 million of assessable profits, and 16.5% for assessable profits above HK$2 million.
- If a limited company has no setting in Hong Kong and does not generate business in Hong Kong during the year, the company can apply to offshore claim and has the Profit Tax waived