Hong Kong

On 28 February 2024 Hong Kong did what the market had been waiting eleven years for: it scrapped every surcharge on residential stamp duty. A foreign individual, a BVI company and a local owner of five flats all became liable for exactly the same duty as a Hong Kong permanent resident buying a first home. A HK$10,000,000 flat cost a non-resident HK$3,000,000 in stamp duty before 25 October 2023, HK$1,500,000 between 25 October 2023 and 27 February 2024, and HK$370,000 from 28 February 2024. The bill fell eightfold.

The Business Registration Ordinance (Cap. 310) requires every person carrying on business in Hong Kong to register that business with the Business Registration Office of the Inland Revenue Department (IRD) within one month of commencement and to pay two distinct amounts: the business registration fee and the levy that funds the Protection of Wages on Insolvency Fund. For certificates commencing on or after 1 April 2026 a one-year certificate costs HK$2,350(HK$2,200 fee plus HK$150 levy) and a three-year certificate HK$6,170 (HK$5,720 plus HK$450). Registration under Cap. 310 is not a licence to trade and says nothing about whether the business is lawful.

The Competition Ordinance (Cap. 619) is Hong Kong’s principal competition statute: Ordinance No. 14 of 2012, passed by the Legislative Council (LegCo) on 14 June 2012, gazetted on 22 June 2012 and brought fully into operation on 14 December 2015.

Three things in Hong Kong employment law moved at once in 2026. The continuous contract threshold fell from 18 hours a week to 17, with an alternative of 68 hours across four weeks. Offsetting of an employer’s mandatory MPF contributions against severance and long service payments has been abolished for service after 1 May 2025. And the statutory minimum wage has stood at HKD 43.1 an hour since 1 May 2026 — the first rate produced by a formula rather than settled by negotiation.

An employer in Hong Kong must enrol every employee aged 18 to 64 in a Mandatory Provident Fund scheme within the first 60 days of employment and remit monthly mandatory contributions of 5 per cent of relevant income from its own funds, plus 5 per cent deducted from the employee. The duty covers full-time and part-time employees alike. The regulator is the Mandatory Provident Fund Schemes Authority (MPFA).

The New Capital Investment Entrant Scheme is Hong Kong’s investor entry route, open for applications since 1 March 2024. The threshold is HK$30 million: at least HK$27 million in permissible assets and a mandatory HK$3 million into the CIES Investment Portfolio managed by the Hong Kong Investment Corporation. The scheme does not confer permanent residence on entry — it grants a limited period of stay, and the right of abode arises no earlier than seven years later.

Three separate regimes drive the effective profits tax rate of a Hong Kong company that earns from intellectual property and from passive income. The patent box gives 5% on the concessionary portion of IP income. The two-tiered profits tax rates give 8.25% on the first HKD 2,000,000 of assessable profits and 16.5% above. FSIE is not a relief at all: it deems specified foreign-sourced dividends, interest, IP income and disposal gains received in Hong Kong by a member of an MNE group to be Hong Kong sourced unless an exception is met.

The Personal Data (Privacy) Ordinance (Cap. 486) stands in 2026 substantially as it stood before the reform announced in January 2020: one of six proposed directions has been enacted. The Privacy Commissioner for Personal Data still cannot impose an administrative fine — every monetary penalty requires a conviction in court. Hong Kong has no mandatory breach notification duty. Artificial intelligence is governed not by statute but by guidance, none of which carries the status of a code of practice.

Salaries tax in Hong Kong is charged not on residents but on income “arising in or derived from Hong Kong” from an office, an employment of profit or a pension — residence and nationality are irrelevant. The controlling question is always where the source of employment is located, not where the services were physically performed. The answer determines whether the whole income, part of it, or none of it is taxable, and whether the 60-day rule is available at all.

Arbitration in Hong Kong is governed by Cap. 609, the Arbitration Ordinance — a statute built on the 2006 version of the UNCITRAL Model Law and in force since 1 June 2011. As at this article’s verification date the consolidated text of Cap. 609 carries a version date of 16 December 2022: the last instrument to amend it was Ordinance No. 6 of 2022 on outcome related fee structures (ORFS). The Hong Kong International Arbitration Centre, HKIAC, registered 582 new cases in 2025, of which 388 were arbitrations, with a total amount in dispute of HKD 126.2 billion.

The Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) is the Hong Kong statute under which, since 29 January 2024, an effective judgment of a Mainland Chinese court in a civil or commercial matter can be registered in the Court of First Instance of the Hong Kong High Court and enforced as if it were a Hong Kong judgment, and under which the holder of a Hong Kong judgment can obtain from the Hong Kong court a certified copy of that judgment, and a certificate in respect of it, for recognition and enforcement in the Mainland. The Ordinance implements the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region, signed by the Supreme People’s Court and the Government of the HKSAR on 18 January 2019 under Article 95 of the Basic Law. Compared with the earlier regime under Cap. 597, the new statute no longer requires an exclusive choice-of-court clause, covers non-monetary as well as monetary judgments, reaches judgments of courts at every level down to the Primary People’s Courts and extends to a defined range of intellectual property disputes. The registration application is made ex parte, the court fee is HK$1,045, the judgment debtor has 14 days after service of the notice of registration to apply to set the registration aside, and the gateway condition is a default in complying with the judgment that occurred within two years before the application.

Hong Kong's employment and talent visas are administered by the Immigration Department across several parallel schemes. The ones that matter to foreign nationals are the General Employment Policy (GEP) for employed professionals and for entrepreneurs, the Top Talent Pass Scheme (TTPS) for high earners and graduates of listed universities, and the Quality Migrant Admission Scheme (QMAS) for those without a job offer. All of them lead to the same destination: after seven years of continuous ordinary residence, the entrant and their dependants may apply for permanent resident status.

Hong Kong operates three separate capital-deduction mechanisms under profits tax: the enhanced deduction for research and development under section 16B and Schedule 45 (300% on the first HK$2,000,000 and 200% above it), the deduction for capital expenditure on acquiring intellectual property rights under sections 16E and 16EA (100% in one year for patent rights and know-how, five equal instalments over five years for six named rights), and the deduction for environmental facilities under section 16I (100% in the year the expenditure is incurred). These are three distinct regimes with different conditions, different prohibitions and different clawback rules on disposal.

Stamp duty on the transfer of Hong Kong stock is charged at an aggregate of 0.2% — 0.1% on each of the two contract notes — plus a fixed HKD 5 on the instrument of transfer. The charge is computed on the consideration or the value of the stock, whichever is higher. The governing statute is the Stamp Duty Ordinance (Cap. 117), Head 2 of the First Schedule, administered by the Stamp Office of the Inland Revenue Department.

Hong Kong has introduced the 15% global minimum tax for multinational groups with consolidated revenue of EUR 750 million or more — through an income inclusion rule (IIR) and its own domestic top-up tax, the Hong Kong minimum top-up tax (HKMTT). Both apply to fiscal years beginning on or after 1 January 2025. The obligation bites not at the point of payment but at the point of administration: the notification is due six months after the end of the fiscal year and the return fifteen months after it, and both are filed exclusively online through the Inland Revenue Department’s Pillar Two Portal.

Most entrepreneurs thinking about "two jurisdictions" imagine two offshore entities for tax reduction. The Hong Kong + UAE dual structure operates on a fundamentally different logic. These are two complementary jurisdictions with different geographic reach, different legal systems, and different banking ecosystems — which together deliver more than either achieves alone.

A Hong Kong profits tax return is not a self-initiated annual filing — it is a response to an individual notice from the tax authority. The obligation arises the moment the Inland Revenue Department (IRD) issues a notice under section 51(1) of the Inland Revenue Ordinance (Cap. 112). BIR51 serves corporations, BIR52 serves persons other than corporations, and BIR54 is used in respect of non-resident persons. The bulk issue of 2025/26 returns took place on 1 and 2 April 2026; the default filing period is one month from the date of issue for BIR51 and BIR52, and two months for BIR54.

There are two fundamentally different ways to close a Hong Kong company. Deregistration is the simplified administrative route under section 750 of the Companies Ordinance (Cap. 622), available to a solvent company that has stopped trading and owes nothing. Winding up is a formal liquidation with an appointed liquidator under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), used where the company still holds assets, owes liabilities or is in dispute with creditors. The gate to the first route is a written Notice of No Objection from the Commissioner of Inland Revenue: without it the Companies Registry will not accept the application.

A Hong Kong employer does not withhold income tax from an employee's pay. Its tax duty is a reporting duty: file the annual Employer's Return (Form BIR56A together with Forms IR56B) and notify the Inland Revenue Department during the year of every hire, cessation and departure using Forms IR56E, IR56F and IR56G. Running in parallel is the labour perimeter: the Employment Ordinance (Cap. 57), the Minimum Wage Ordinance (Cap. 608), the Mandatory Provident Fund Schemes Ordinance (Cap. 485) and the Employees' Compensation Ordinance (Cap. 282). The two perimeters are procedurally unconnected, but a breach of either is a criminal offence rather than an administrative one.

Hong Kong is a free port: no customs tariff is charged on the import or the export of goods. The Trade and Industry Department puts it directly: “Hong Kong is a free port. We pursue a free trade policy and do not maintain barriers on trade. No tariff is charged on import or export of goods.” The absence of a tariff is not the absence of obligation: almost every import and export requires a declaration within 14 days, four categories of goods bear excise duty, and dozens of categories require a licence.

A licence from Hong Kong’s Securities and Futures Commission (SFC) is mandatory for anyone carrying on a business in one of the regulated activities listed in Part 1 of Schedule 5 to the Securities and Futures Ordinance (Cap. 571). The Schedule lists thirteen activities, but only eleven are live: Types 1 to 10 and Type 13. For each activity a corporation must have at least two approved Responsible Officers (ROs), the prescribed paid-up share capital, and liquid capital maintained at all times under the Financial Resources Rules.

Hong Kong is preparing four new licensing regimes for virtual asset service providers — dealers, custodians, advisers, and asset managers — supplementing the already-established regime for trading platforms (VATP), through amendments to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).

A Money Service Operator (MSO) is a person who, in Hong Kong and as a business, provides a money changing service or a remittance service and must therefore hold an MSO licence granted by the Commissioner of Customs and Excise under Part 5 of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615, AMLO). The licence runs for two years, an application for its grant has cost HK$3,810 plus HK$945 for each person subject to the fit-and-proper test since 15 May 2026, and operating without a licence carries a fine of up to HK$1,000,000 and up to two years’ imprisonment. The feature that sets the MSO apart from Hong Kong’s other AMLO licences is that an MSO is listed as a “financial institution”, so a breach of the customer due diligence duties in Schedule 2 is a criminal offence, not merely a disciplinary matter.

A trust or company service provider (TCSP) licence is mandatory in Hong Kong for anyone who, by way of business, provides other persons with a registered office, director or secretary services, a nominee shareholder or a trustee. The regime sits in Part 5A of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) and is administered by the Companies Registry. A licence runs for three years; at the end of June 2026 there were 7,412 licensees.

A Hong Kong stablecoin issuer licence is required of any person who, in the course of business, issues a specified stablecoin in Hong Kong, or issues outside Hong Kong a stablecoin referenced wholly or partly to the Hong Kong dollar. Licensing is administered by the Monetary Authority (HKMA). The regime has been in force since 1 August 2025.

A family investment vehicle in Hong Kong is charged to profits tax at 0% where it is managed by an eligible single family office and the aggregate net asset value under that office’s management is at least HK$240,000,000. The legal basis is Schedule 16E to the Inland Revenue Ordinance (Cap. 112), inserted by Ord. No. 8 of 2023 and applying from the year of assessment commencing 1 April 2022. This is not an automatic exemption. It requires an irrevocable written election, annual satisfaction of quantitative thresholds, and at least two qualified full-time employees in Hong Kong.

Hong Kong has no separate crypto tax and no digital-asset provisions in the Inland Revenue Ordinance. Profits from digital assets fall within profits tax under the ordinary machinery of section 14 of Cap. 112 where they are trading profits with a Hong Kong source; capital gains are not taxed at all. The only Inland Revenue Department guidance on the substance is DIPN 39 (Revised) of March 2020, which has not been updated since. The practical consequence is that everything turns on the line between trading stock and a capital asset, and that line is drawn by the intention at acquisition and by nine questions set out by the Court of Final Appeal.

A DNFBP — a designated non-financial business or profession — is one of five categories of person to which the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) applies the customer due diligence and record-keeping requirements of Schedule 2. Four of those categories hold no TCSP licence: accounting professionals, legal professionals, estate agents and Category B precious metals and stones registrants. This article deals with those four.

A director of a Hong Kong company is any person occupying the position of director “by whatever name called” (s. 2(1) of the Companies Ordinance (Cap. 622)), together with any shadow director in accordance with whose directions the company’s directors are accustomed to act. A director’s duties in Hong Kong in 2026 consist of three layers: the codified duty to exercise reasonable care, skill and diligence under s. 465 of Cap. 622; the fiduciary duties of the common law, summarised in the eleven principles of the Companies Registry’s “A Guide on Directors’ Duties”; and dozens of specific obligations on accounting records, registers and filings, for breach of which a director is personally liable as a responsible person under s. 3 of Cap. 622. A director’s liability arises on four independent fronts: civil liability to the company (s. 466); criminal liability for contraventions of Cap. 622 and related ordinances (fines from HK$10,000 to HK$700,000 and imprisonment of up to two years under Cap. 622 itself, and up to five years for fraudulent trading under s. 275 of Cap. 32); personal liability for the company’s debts in the event of fraudulent trading; and disqualification for between one and fifteen years under Part IVA of Cap. 32.

A Hong Kong company carries two parallel, procedurally unconnected annual obligations: filing an Annual Return (Form NAR1) with the Companies Registry, and filing a Profits Tax Return (Form BIR51) with attached audited financial statements with the Inland Revenue Department (IRD).

The Protection of Critical Infrastructures (Computer Systems) Ordinance — Cap. 653 — is the first statute in Hong Kong’s history to impose binding cybersecurity obligations. It was passed by the Legislative Council on 19 March 2025, assented to on 27 March 2025, and brought into operation in its entirety on 1 January 2026. It does not reach every company: it reaches a narrow population of designated critical infrastructure operators across eight sectors, and imposes on them three categories of duty — organisational, preventive, and incident reporting and response.

Company re-domiciliation to Hong Kong is the statutory process by which a non-Hong Kong incorporated company transfers its place of incorporation to Hong Kong while retaining the same legal identity, corporate history, assets, contracts, banking relationships and liabilities. No new entity is created and no winding-up or court scheme is required: the company continues as the same body corporate, now governed by Hong Kong law.

A Certificate of Resident Status (CoR) is the document the Hong Kong competent authority issues to a Hong Kong resident who needs proof of residence in order to claim benefits under a Comprehensive Double Taxation Agreement or Arrangement (CDTA). Since 12 June 2023 the Inland Revenue Department has decided applications purely on the plain definition of "resident of Hong Kong" in the relevant agreement, without separately assessing economic substance. The certificate is free, the target processing time is 21 working days, and a single application can cover up to three calendar years.

An objection to a Hong Kong tax assessment must reach the Commissioner of Inland Revenue within one month after the date of the notice of assessment, and an appeal against the Commissioner’s determination must reach the Clerk to the Board of Review within one month after that determination is transmitted to the taxpayer. Both periods are set by the Inland Revenue Ordinance (Cap. 112) and both are hard deadlines, extendable only on a narrow set of grounds. Lodging an objection does not suspend the obligation to pay: Hong Kong runs a pay-first, argue-later system. Payment can be held over, but holding over is a discretion of the Commissioner, not an entitlement of the taxpayer.

Transfer pricing in Hong Kong is governed by Part 8AA of the Inland Revenue Ordinance (Cap. 112), introduced by the Inland Revenue (Amendment) (No. 6) Ordinance 2018. The regime rests on two substantive rules — the arm's length principle for transactions between associated persons (section 50AAF) and the attribution of profits to a permanent establishment (section 50AAK) — supported by three tiers of documentation: master file, local file and country-by-country report. Departmental Interpretation and Practice Notes Nos. 58, 59 and 60 set out how the Inland Revenue Department applies them.

A Hong Kong trust is governed by the common law and by the Trustee Ordinance (Cap. 29), not by a dedicated trusts statute; the trust itself is not a legal person, and the taxpayer is the trustee. Hong Kong trust law took its present substance on 1 December 2013, when the Trust Law (Amendment) Ordinance 2013 came into force, and has not changed in substance since; the consolidated version of Cap. 29 is nevertheless dated 23 May 2025, because of consequential amendments made by the company re-domiciliation regime.

Hong Kong offers two domestic fund vehicles: the open-ended fund company (OFC), a corporate structure with variable capital and segregated sub-funds, and the limited partnership fund (LPF), a contractual structure built for private equity and venture capital. As at July 2026 the Companies Registry recorded 765 OFCs and 1,842 LPFs. Both rely on the unified funds exemption in section 20AN of the Inland Revenue Ordinance (Cap. 112), but the conditions differ — and only an OFC can access the Government grant administered by the SFC.