Financial Crime World

Hong Kong Financial Reporting Requirements: What Businesses Need to Know

Hong Kong companies are required to comply with annual filing obligations to ensure adherence to the territory’s regulatory framework. This includes submitting an Annual Return and financial statements to the Companies Registry, as well as filing Profits Tax Returns with the Inland Revenue Department.

Accurate Audited Financial Statements are Crucial

Companies must maintain accurate accounting records in accordance with Hong Kong Financial Reporting Standards. These records should be regularly updated and audited by a CPA registered in Hong Kong. The financial statements must include:

  • Balance sheets
  • Income/Profit statements
  • Loss accounts
  • Auditor reports

Annual Return: A Must for Hong Kong Companies

The Annual Return (NAR1) must be filed with the Companies Registry within 42 days of the company’s incorporation anniversary. This includes information about:

  • Company officers
  • Share capital
  • Shareholder information
  • Registered office address

Failure to submit the annual return on time can result in late fees.

Annual Registration Fees Vary by Company Type

Registration fees vary depending on the type of company. For private companies limited by shares, the fee is HK$105 for timely submissions and increases incrementally for late submissions. Companies limited by guarantee face similar fee structures, while public companies pay a higher registration fee of HK$140.

Profits Tax Returns: A Necessity for Limited Hong Kong Companies

All limited Hong Kong companies must submit annual tax returns with supporting documents, including:

  • Assessed profits
  • Adjusted losses
  • Audited financial statements

Dormant firms and those exempt under the Inland Revenue Ordinance are exceptions to this rule.

Business Registration Requirements: Display Your Certificate

Companies must renew their original Business Registration Certificate (BRC) before the anniversary date of incorporation and display it at their place of business.

Remuneration Paid to Employees: Accurate Record-Keeping is Essential

Companies with employees must maintain accurate payroll records and report remuneration information on the annual Employer’s Return form. This includes:

  • Salaries
  • Bonuses
  • Pension plans
  • Basic wages
  • Leave pay
  • Education expenses
  • Business-sponsored employee residences

Annual General Meetings: A Requirement for Hong Kong Companies

Every Hong Kong company must hold at least one Annual General Meeting (AGM) within the financial year. Private companies not subject to larger conglomerates must hold an AGM within nine months of the fiscal year end.

Conclusion

Understanding these filing requirements is crucial for businesses registered in Hong Kong. For more information or clarification, it is recommended to consult with a professional financial advisor or the Hong Kong Companies Registry.