Hong Kong Launches Inward Re-domiciliation Regime

Further enhancing Hong Kong’s profile as a leading global business and financial hub, the government’s new inward re-domiciliation regime will provide an attractive and efficient mechanism for international companies to re-domicile in Hong Kong. This will allow re-domiciling companies to maintain their original legal identity, continue with business operations and avoid costly and complex legal procedures.

The Companies (Amendment) (No. 2) Bill 2024 (the Amendment Bill) was gazetted on 20 December 2024, and the new regime amends the Companies Ordinance (Cap. 622) (“CO”), mirroring efforts among international financial centres to attract overseas companies and deepen the domestic financial services sector. First reading of the Bill took place in the Legislative Council on 8 January 2025 and the regime takes effect on 23 May 2025.

Upon re-domiciliation to Hong Kong, companies would generally have the same rights as any similar locally incorporated company, including qualifying as Hong Kong resident under most double tax treaties, and would also be required to comply with the relevant CO requirements. Following re-domiciliation, companies would retain all property, rights, obligations and liabilities, with no impact on contractual and legal processes.

Provisions under the new regime are only made for the inward re-domiciliation of companies. The changes come after Hong Kong’s successful introduction of a re-domiciliation scheme for open-ended fund companies and limited partnership funds in 2021 and follows a broadly positive public consultation exercise.

Re-domiciling Companies to Hong Kong

The legislation applies to four types of companies (or equivalent types in the original jurisdiction): private companies limited by shares, public companies limited by shares, private unlimited companies with a share capital and public unlimited companies with a share capital. Companies limited by guarantee without share capital, as typically adopted by non-profit organisations, and other types of companies which are not specified in the CO are not included in the regime. Importantly, for a company to be eligible for re-domiciliation to Hong Kong, outward re-domiciliation must be permitted in its original jurisdiction. There are also no requirements related to economic substance in terms of asset values, revenue or number of employees, and companies of all sizes that meet the criteria are eligible to apply for re-domiciliation.

Certain tax implications of the re-domiciliation regime have been highlighted by the Inland Revenue Department (“IRD”), notably there will be no impact on a company’s tax obligations in its home jurisdiction, while transitional tax matters including allowable deductions and specified allowances will be dealt with by amendments to the Hong Kong Inland Revenue Ordinance (“HKIRO”). Tax credits will be utilised to avoid double taxation where required, and stamp duty obligations in Hong Kong will not arise provided that there are no changes or transfers in the beneficial ownership of a company’s assets after re-domiciliation.

In terms of the process for re-domiciliation to Hong Kong, upon payment of the relevant fee and submission of the application form and supporting documents, the Registrar of Companies will register the applicant as one of the four types of companies listed above, with an indicative turnaround time of around two weeks. Upon receipt of a certificate of re-domiciliation issued by the Registrar of Companies, the company will be required to be de-registered in its original jurisdiction and submit evidence to the Registrar of Companies showing that the de-registration has been completed within 120 days.

This is a highly significant development for Hong Kong’s financial services industry with potentially wide-ranging impact and providing companies with a host of benefits attached to being supervised under Hong Kong’s robust, transparent and efficient regulatory regime. Previously where an international business holding assets is looking to re-domicile, the only option would be to transfer these assets from the original domicile, which would incur various fees and have considerable tax implications, as well as a requirement for two sets of accounts and audits. It also highlights the recent trend of international financial centres encouraging businesses to consolidate operations in one jurisdiction.

The Maples Group – Expert Guidance in Hong Kong

The Maples Group’s fiduciary services team is well established in Hong Kong with broad expertise across the corporate regulatory environment. As such, we are well positioned to assist with inward re-domiciliation of companies and manage the transition process, as well to provide the ongoing company secretarial services as required. Leveraging our global institutional infrastructure and expertise in entity management, our professionals are renowned for providing high touch service and supporting our clients at every stage of the corporate life span. If you have any questions about the new inward re-domiciliation regime in Hong Kong, please contact one of the professionals below or your usual Maples Group contact.

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