We are often asked how do I close down my Hong Kong Company?
There are two ways to close down a Hong Kong Company:
(a) De-registration; and
(b) Winding Up
Although both procedures will result in the dissolution of the company, the processes involved with each are significantly different.
Certainly of the two the simpler (and less expensive) option is Deregistration and that is the option that we will be examining in this article today.
The first thing to note is that the Deregistration option is only available if the company doesn’t owe any money to outside parties.
To be able to proceed with de-registration there are a number of conditions that must be fulfilled:
1. The De-registration application must be agreed to by ALL shareholders
2. The company must never have commenced business OR ceased business operation for more than 3 months immediately before the de-registration application
3. The company must have no outstanding liabilities (e.g. accounts payable, amounts due to third parties etc.)
4. The company must have no outstanding returns required to be filed with government (e.g. Annual Return, Business Registration fee & Tax Return etc.)
5. The company is not a party to any legal proceedings
6. The company’s assets must not consist of any immovable property situated in Hong Kong
7. If the company is a holding company, none of its subsidiary’s assets must consist of any immovable property situated in Hong Kong
8. The company must not be a company specified in section 749 of the Companies Ordinance (ie as stated below):
(a) a public company
(b) an authorized institution under Banking Ordinance (Cap 155)
(c) an insurer under Insurance Companies Ordinance (Cap 41)
(d) a corporation licensed under Part V of Securities and Futures Ordinance (Cap 571)
(e) an associated entity under Part VI of Securities and Futures Ordinance (Cap 571)
(f) an approved trustee under Mandatory Provident Fund Schemes Ordinance (Cap 485)
(g) a company registered as a trust company under Part VIII of the Trustee Ordinance (Cap 29)
(h) a company having a subsidiary that falls within item 1-7 above OR
(i) a company that fell within item 1-7 above at any time during the 5 years immediate before the application for de-registration
The good news is you do not need to visit HK during the whole procedure – everything can be done via email and courier.
The whole process takes around 6 months to complete after original documents are submitted to the relevant government agency (ie assuming no objection is received by the government during the de-registration process)
Important to Note:
• once the company is dissolved, all property (including credit balances in bank accounts, motor vehicle, landed property, etc.) and rights vested in or held on trust for the company immediate before the dissolution is vested in the HK government as bona vacantia
• If your HK Company has a Bank Account you’d be well advised to ensure that you properly close your Company’s account directly with the relevant bank (to begin the process you will need to present a board resolution to the bank formally authorising the account to be closed).
• Following deregistration, you will need to keep company records for at least 10 years.
OFFSHORE COMPANIES INTERNATIONAL LTD.