How to Dissolve Hong Kong Companies?
In the recent years, more and more domestic enterprises or individuals choose to register companies in Hong Kong because of its simple registration procedure, low tax rate, few tax categories, as well as its mature business environment and sound legal system. However, many enterprise don’t really start business or they are unwilling to operate their companies for some reason, so they just let them go without annual return or dissolution. But they don’t know the severe consequences of doing so.
According to the laws in Hong Kong area, annual return must be completed one year after the registration of the company. If not, there will be a cumulative fine. If you continue to ignore it, you will receive summons from the government. At the same tine, Hong Kong government will forcibly dissolve your company. Then, the company will have to pay the annual return fee and the accumulated fine. The company’s directors will also be blacklisted which will influence their personal reputation and their business in Hong Kong. Therefore, the Hong Kong company must be dissolved in time when it doesn’t operate anymore.
What’s the dissolution process of Hong Kong companies?
1. Application dissolution
Both the directors and legal secretaries can file an application.
2. To file an application, the following conditions must be met:
(1) The shareholders and directors of the company all agree to dissolve;
(2) The company has not started operations or business, or has not operated 3 months before the application is filed;
(3) The company has no outstanding debts;
(4) The company is not a party to any legal process;
(5) The company's assets do not include real estates located in Hong Kong;
(6) If the company is a controlling company, the assets of all subsidiaries of the company do not include real estate located in Hong Kong.
3. Dissolution Procedures:
(1) The applicant should file written documents to the Inland Revenue Department to apply for dissolution;
(2) The commissioner of the Inland Revenue Department will issue Notice of Not Objection the Dissolution of Company Registration if there is no tax problems within 1-2 months;
(3) After receiving Notice of Not Objection the Dissolution of Company Registration, the applicant can file a dissolution application to the Companies Registry. Then, the division chief will publish this application on Gazetee twice. After the first announcement, there will be a three-month-long opposition period. If the division chief doesn’t receive any oppositions, the second Gazetee announcement will be published, which means the company has been officially dissolved.
The dissolution process takes approximately 6-8 months. At the same time, it should be noted that during the application for dissolution of the Hong Kong company, the annual return chart must still be submitted on time until the Company Registry has notified the company that it has been dissolved.