How does share transfer work in Hong Kong

Shares are securities that represent a company's share capital and ownership interest. In the context of a Hong Kong company, shares are transferable; however, the following four points must be adhered to during this process:

a) Articles of Association

Firstly, the transfer of shares must comply with the company's articles of association. For instance, such a transfer requires approval from the other shareholders. If a shareholder believes that the transfer may adversely affect their returns, they have the right to refuse the transfer.

b) Transfer Documents

Following approval, the necessary transfer documents must be prepared. These documents include the terms and conditions of the transfer, the instrument of transfer, and the registration of the purchase and sale.

c) Stamp Duty

Thirdly, the documents must be stamped by the government, and a fee known as stamp duty must be paid. The amount of stamp duty will be assessed based on either the market value of the company or the value of the net assets as of the date of the transfer.

d) Audit Report

Finally, the company must provide its most recent audit report. If this report is more than three months old, a current financial report must also be submitted.

Once all necessary documents have been collected, they must be submitted to the government. The transfer process is considered complete following approval and stamping by the government.

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