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In order to strengthen the position as a global business and financial hub, the HKSAR Government has already put into place user-friendly fund redomiciliation mechanisms for Open-Ended Fund Companies and Limited Partnership Funds to attract existing foreign funds to establish and operate in Hong Kong. In order to strengthen the position as a global business and financial hub, the HKSAR Government has already put into place user-friendly fund redomiciliation mechanisms for Open-Ended Fund Companies and Limited Partnership Funds to attract existing foreign funds to establish and operate in Hong Kong. As a further step, a company re-domiciliation regime, enabling a company domiciled elsewhere to change its place of incorporation to Hong Kong while maintaining its legal identity as a body corporate, giving companies maximum business continuity and reduced administrative complexity, is on its road.
Key Features 1. Only an inward re-domiciliation regime is propsed i.e. a regime for foreign companies to re-domicile to Hong Kong but not vice versa.
2. The proposed regime will cover all 5 types of companies that could be formed in Hong Kong under the Companies Ordinance or their comparable types in the company's original place of incorporation.
3. The re-domiciled company will retain its legal identity (i.e. no new legal entity is created) upon completion of the re-domiciliation. The company’s property, rights, obligations and liabilities should not be affected.
4. The re-domiciled company would have the same rights and obligations as any other companies of its kind incorporated in Hong Kong (i.e. it should comply with the relevant requirements under the Companies Ordinance).
5. No economic substance test4for foreign companies to be eligible for the re-domiciliation.
Application Process 1. The proposed regime (including processing and approval of applications) will be administered by the Registrar of Companies
2. To ensure companies re-domiciling to Hong Kong are of good standing, few key factors should be attended to (1) compliance with the legal requirements on transfer of incorporation in the original place of incorporation (2) member and creditor protection and (3) solvency will be considered when processing the applications.
3. Upon successful application, the company will receive a certificate of re-domiciliation from the Companies. By then, the re-domiciled company will need to provide evidence of de-registration in its original place of incorporation within 60 days in order to complete the re-domiciliation process.
Tax Implication On Re-domiciled Company to Hong Kong The profits tax exposure of a Hong Kong company is determined by whether it carries on any trade or business in Hong Kong and derives any Hong Kong sourced profits from such trade or business. Generally speaking, a re-domiciled company would not affect the company's Hong Kong profits tax exposure except that (1) the profits tax liabilities of a company is dependent on its Hong Kong tax resident status and (2) the re-domiciliation would result in the redomiciled company becoming a Hong Kong tax resident.
The regime is under in consultation stage and that the government will introduce consequential amendments to the Inland Revenue Department to (1) provide guideline as to the redomiciled companies' tax obligations and to (2) deal with certain transitional tax matters.
Whatsapp : (852) 6499 4686 Phone : (852) 2186 6936 Email : info@intershores.hk Disclaimer: Whilst reasonable care has been taken in provision of information above, it does not constitute legal or other professional advice. INTERSHORES does not accept any responsibility, legal or otherwise, for any error omission and accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, readers are advised to take appropriate professional advice before committing themselves to any involvement in jurisdictions, vehicles or practice. |
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