Hong Kong introduces inward company re-domiciliation regime

The Companies (Amendment) (No.2) Ordinance 2024, which introduces an inward company re-domiciliation regime in Hong Kong, was approved by the Legislative Council on 14 May and will be open for application from 23 May.

Non-Hong Kong incorporated companies that fulfil the requirements in respect of company background, integrity, member and creditor protection, and solvency will be permitted to apply to re-domicile to Hong Kong while maintaining their legal identity as a body corporate and ensuring business continuity.

The property, rights, obligations and liabilities, as well as the relevant contractual and legal processes of the companies, will not be affected during the process. If the company’s actual similar profits are also taxed in Hong Kong after re-domiciliation, the government will offer unilateral tax credits to eliminate any double taxation.

The re-domiciliation regime applies to four types of companies that can be formed in Hong Kong or comparable overseas incorporation types:

• Private companies limited by shares.
• Public companies limited by shares.
• Private unlimited companies with a share capital.
• Public unlimited companies with a share capital.

The type of company under the law of its original domicile must be the same or substantially the same as the proposed type in the Hong Kong re-domiciliation application.

In general, re-domiciled companies will be regarded as companies incorporated in Hong Kong. They will have the same rights as any Hong Kong-incorporated companies of their kind and will be required to comply with the relevant requirements under the Companies Ordinance.

The amendment ordinance puts in place a simple and accessible mechanism for company re-domiciliation. Previously, to re-domicile in Hong Kong companies wishing were obliged to undergo complicated and costly judicial procedures associated with either winding up in the original domicile and incorporating a new body corporate in Hong Kong, or entering into a court-sanctioned scheme of arrangement to convert into a wholly-owned subsidiary of a Hong Kong incorporated company.

“It addresses the demand of companies incorporated elsewhere with major business in Hong Kong for re-domiciliation and is conducive to our efforts in proactively attracting enterprises and investment, thereby generating business for local professional services sectors as well as increasing investment and job opportunities,” said Secretary for Financial Services & the Treasury Christopher Hui.

A re-domiciled company is required to de-register from its original domicile within 120 days of the issuance of the certificate of re-domiciliation in Hong Kong. Documents evidencing the deregistration must be submitted to Registrar of Companies and failure to comply with the deregistration requirement will result in revocation of the re-domiciliation registration.

From 23 May, the Companies Registry will set up a new thematic section on its website to provide the application details and relevant information. The Integrated Companies Registry Information System will also be enhanced to process applications.