Dec 23, 2024
Hong Kong is a leading destination for business and investment, renowned for the ease of doing business with the underpinning of a strong tradition of rule of law. To strengthen our position as a global business and financial hub, the Government proposed to introduce an inward company re-domiciliation regime (the Regime) which allows companies domiciled elsewhere to transfer their domicile to Hong Kong.
Under the Regime, non-Hong Kong incorporated companies that have successfully registered as re-domiciled companies under the Companies Ordinance (Cap. 622) (CO) are able to preserve their legal identity and maintain their business continuity. The Companies (Amendment) (No. 2) Bill 2024 (the Amendment Bill) was gazetted on 20 December 2024 to amend the CO and other related ordinances including the Inland Revenue Ordinance (Cap. 112) (IRO) in order to put in place the Regime in Hong Kong.
Hong Kong does not impose tax on the basis of residence or domicile. Under section 14 of the IRO, any persons, including corporations, partnerships, trustees and bodies of persons, carrying on any trade, profession or business in Hong Kong are chargeable to tax on all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong from such trade, profession or business.
If a non-Hong Kong incorporated company has carried on a trade, profession or business in Hong Kong before it re-domiciles to Hong Kong and has profits chargeable to tax from such trade, profession or business before its re-domiciliation, it will have profits tax liabilities from such profits. Re-domiciliation will not relieve the company from its profits tax liabilities in respect of the pre-domiciliation period.
If, however, a non-Hong Kong incorporated company has never carried on any trade, profession or business in Hong Kong before it re-domiciles to Hong Kong, no profits tax will be charged on the company for the period before it commences business in Hong Kong.
Please click into the following for more information:
Legislative Council Brief : Companies (Amendment) (No. 2) Bill 2024 (the Amendment Bill)
Inland Revenue Department : Company Re-domiciliation Regime