To suspend or cease your business activities in Hong Kong, you have two options: dormancy or deregistration. Both are relatively straightforward and inexpensive but do not achieve the same goal.
Dormancy: The purpose of the "dormancy" is to suspend your activity temporarily, with the aim of resuming it later. The procedure is as follows:
- 1.The company must deliver a special resolution to the Companies Registry declaring that the company will become dormant.
- 2.The Companies Registry must approve and register this resolution.
- 3.The company will become dormant (i) as of the date of delivery of the special resolution or (ii) as from any later date that is specified in the special resolution.
Once the company is declared dormant, it shall not have any accounting transactions. This will exempt the company from accounting obligations (i.e. preparation of Management Accounts and Audit Report), as well as from some yearly reporting (i.e. Annual Return and Profits Tax Return). It can be re-activated easily, from the moment it runs new transactions.
Deregistration: The purpose of the “deregistration” is to permanently cease the activity of the company. As long it can prove it has no outstanding debt and has paid all its taxes, it can simply apply for deregistration with the Companies Registry. The procedure is as follows:
- All shareholders shall agree to the deregistration;
- The company shall not have commenced business or shall have ceased all business operation during the 3 months preceding deregistration;
- The company shall not have any outstanding liabilities nor be involved in any legal proceedings;
- Its assets (and those of its subsidiaries, if any) shall not consist in any immovable property situated in Hong Kong;
- It shall have obtained a "Notice of No Objection” issued by the Inland Revenue Department (“NNO”).
Within 3 months from the date of issuance of the NNO, the company shall apply for deregistration with the Companies Registry. The whole deregistration procedure generally takes around 9 months.
Fidinam Can Help
Looking for assistance to pause or cease your business? Wondering about your options? Feel free to reach out to us via the form below.
