Hong Kong introduces company re-domiciliation regime

Introduction

With the aim to strengthen Hong Kong's position as an international financial and business hub, Hong Kong has introduced an inward company re-domiciliation regime under the Companies (Amendment) (No. 2) Ordinance ("Amendment Ordinance"), which came into effect on 23 May 2025. The new regime, primarily contained in Part 17A of the Companies Ordinance (Cap. 622) ("CO"), is now accepting applications through the Companies Registry. The regime establishes a streamlined and cost-effective pathway for eligible non-Hong Kong incorporated companies to transfer their domicile to Hong Kong. Crucially, the regime eliminates the need for complex court procedures or winding-up processes whilst preserving companies’ legal identity and business continuity.

The regime arrives at a particularly opportune moment for overseas corporations, as traditional incentives for setting up companies in the offshore jurisdictions have gradually diminished due to the increasingly stringent economic substance rules. Against this backdrop, the regime is particularly attractive for companies with substantial Asia-Pacific operations seeking to align their domicile with their primary business activities and strategic focus. In addition, non-Hong Kong incorporated companies operating or listed in Hong Kong can reduce their regulatory compliance cost and burden associated with dual regulation in their place of incorporation and Hong Kong.

Eligibility Requirements

To qualify for re-domiciliation, a non-Hong Kong incorporated company seeking to re-domicile to Hong Kong must satisfy several eligibility requirements:

• Company Type: The applicant must be of a type that is the same or substantially similar to one of the following four types of companies, namely (a) a private company limited by shares, (b) a public company limited by shares, (c) a private unlimited company with a share capital, and (d) a public unlimited company with a share capital.
• Original Domicile: The jurisdiction where the applicant is currently incorporated or domiciled (“Original Domicile”) must have a regime permitting outward re-domiciliation to another jurisdiction, and the applicant has complied with the requirements of the law of the Original Domicile in this regard. Also, the applicant’s constitutional document must not prohibit such re-domiciliation. Currently, certain offshore jurisdictions, such as the Cayman Islands and British Virgin Islands, have established the outward re-domiciliation regimes.
• Members’ consent: The applicant must obtain its members’ consent in compliance with the laws of the Original Domicile and its constitutional documents. If neither of the above requires any members’ consent, the applicant must obtain a members’ resolution passed by a majority of at least 75% (i.e. at least 75% of the number of eligible members or members representing at least 75% of the total voting rights of all eligible members at a meeting or in writing).
• Creditor protection: The application must be made in good faith without intent to defraud its existing creditors.
• Timing: The applicant’s first financial year since incorporation has passed before the application date.
• Solvency: The applicant will be able to pay its debts as they fall due within 12 months of the application date. The applicant is not in liquidation and no liquidation proceedings against the applicant are ongoing or pending.
• Integrity: the Registrar of Companies (“CR”) may refuse the application if, in their opinion, the applicant is likely to be used for an unlawful purpose or for a purpose contrary to public interest. The applicant shall comply with all requirements in the CO in respect of re-domiciliation.

Application Process

Similar to the application process for incorporating a Hong Kong company, applicants can utilise a "one-stop approach" by submitting a single application to the CR, covering both re-domiciliation and business registration requirements. The CR normally processes and approves re-domiciliation applications within 2 weeks of receiving all necessary documents and information. Upon approval of the application, the CR will simultaneously issue both the certificate of re-domiciliation and the business registration certificate to the applicant (the "Re-domiciliation Date").

After successful re-domiciliation to Hong Kong, the re-domiciled company must take all reasonable steps to procure its deregistration in the Original Domicile as soon as practicable. The re-domiciled company must provide evidence of deregistration to the satisfaction of the CR within 120 days of the Re-domiciliation Date. Failure to deregister within the prescribed period may result in the re-domiciliation registration being revoked.

Legal and regulatory implications

Commencing from the Re-domiciliation Date, the applicant will be regarded as a company incorporated in Hong Kong for the purpose of the laws of Hong Kong, subject to certain exceptions such as airline corporations. Essentially, the re-domiciliation of the company does not create a new legal entity and does not affect the company’s identity, continuity, contracts, properties, rights, obligations, or liabilities of, or any legal proceedings commenced or continued by or against, the company. The re-domiciled company will have the same rights, and be subject to all the relevant requirements, under the CO in the same manner as a company formed and registered under the CO.

An applicant operating in the banking and insurance sectors would require prior assessment from the relevant regulatory authorities in Hong Kong before submitting a re-domiciliation application to the CR. In particular:

• Non-Hong Kong authorised institutions, holding companies of authorised institutions and approved money brokers should obtain prior approval from the Hong Kong Monetary Authority
• Non-Hong Kong incorporated insurers should obtain a letter of no-objection from the Insurance Authority

Tax implications

Generally, a company will be subject to Hong Kong profits tax on its profits arising in or derived from a trade, profession or business carried on in Hong Kong, regardless of where the company is incorporated or domiciled. Therefore, any non-Hong Kong incorporated company which has carried on a trade, profession or business in Hong Kong and has taxable profits arising in or derived from such trade, profession or business before re-domiciliation will remain liable for those profits tax liabilities. Conversely, if the company did not conduct any trade, profession or business in Hong Kong before re-domiciliation, no profits tax will be charged on the company in respect of the pre-domiciliation period.

In addition, the Amendment Ordinance has amended the Inland Revenue Ordinance to provide for, among others, certain transitional tax arrangements and elimination of double taxation. In particular, if (i) a re-domiciled company has already paid the foreign tax of substantially the same nature as Hong Kong profits tax in respect of its unrealised income or profit in the Original Domicile due to its re-domiciliation, and (ii) the actual income or profit derived by the re-domiciled company are taxed in Hong Kong after re-domiciliation, unilateral tax credits are available to the re-domiciled company to prevent the double taxation. The tax credit amount for a particular year of assessment is capped at the lower of (a) the foreign tax already paid or (b) the Hong Kong profits tax payable on that income, and any excess amount of foreign tax paid over the tax credit cap can be deducted when ascertaining the assessable profits of the re-domiciled company.

No Hong Kong stamp duty will be chargeable on the re-domiciliation process of the company. However, after re-domiciliation, any subsequent transfer of shares of a re-domiciled company will be subject to Hong Kong stamp duty.

Conclusion

Navigating the company re-domiciliation process requires careful planning and specialist guidance due to its complexity and time-sensitivity. To ensure a seamless transition, we recommend that any non-Hong Kong incorporated company considering re-domiciliation to Hong Kong should seek legal and tax advice at the earliest opportunity to assess feasibility and understand the implications of re-domiciliation.

Our corporate team has extensive experience in cross-border corporate restructuring and is well-positioned to guide you through the company re-domiciliation process. Our comprehensive service includes but not limited to conducting feasibility assessment, preparing re-domiciliation application and documents, coordinating with overseas counsel and regulatory authorities, and providing ongoing company secretarial support following your successful re-domiciliation.

If you have any questions or would like further details on the above issues, please contact our corporate team.

The information given in this document concerning technical legal or professional subject matter is for guidance only and does not constitute legal or professional advice.  Always consult a suitably qualified lawyer on any specific legal problem or matter. Bird & Bird assumes no responsibility for such information contained in this document and disclaims all liability in respect of such information.