New Pathway for Overseas Companies to Re-domicile to Hong Kong

Hong Kong officially launched its inward company re-domiciliation regime with the gazetting of the Companies (Amendment) (No. 2) Ordinance 2025. This new regime offers a court-free process that allows eligible non-Hong Kong incorporated companies to relocate their domicile to Hong Kong while retaining their corporate identity and ensuring business continuity. It is specifically designed for inward re-domiciliation and applies only to companies from jurisdictions that permit the transfer of domicile. This initiative represents a significant change in Hong Kong's corporate landscape, strategically aimed at attracting foreign enterprises and investments, particularly those traditionally based in offshore jurisdictions. 

Eligible Companies to Re-domicile to Hong Kong:

1. The new regime is applicable to certain categories of companies as defined by the law of their original domicile, which must correspond to or be substantially similar to the following types outlined in the Hong Kong Companies Ordinance:

·       Private companies limited by shares

·       Public companies limited by shares

·       Private unlimited companies with a share capital

·       Public unlimited companies with a share capital

Note: Companies limited by guarantee without a share capital are not eligible to re-domicile to Hong Kong under the current regime.

The regime is designed to encompass companies of various structural types that meet the criteria related to integrity, member and creditor protection, and solvency. Applicant companies will not be required to undergo an economic substance test, consistent with the practices of most jurisdictions that have established a re-domiciliation regime.

 2. Protection of Creditors and Shareholders' Consent: If the law governing the place of incorporation or the company's constitutional documents stipulates that member consent is necessary for re-domiciliation, the company must verify its compliance with this requirement. In the absence of such a requirement, the company must obtain a resolution for re-domiciliation, which must be duly passed by at least 75% of its eligible members, either during a meeting or in writing.

3. Compliance with Laws of the Original Jurisdiction: The laws of the company's original domicile must permit outward re-domiciliation. The company is required to comply with all pertinent legal requirements in its original jurisdiction, ensuring that the re-domiciliation process is legally valid.

4. Minimum Incorporation Period: The company must have been incorporated for a minimum of one financial year on or before the date of the re-domiciliation application.

5. Solvency: The company must demonstrate solvency and must not be subject to any existing orders or pending petitions or proceedings for winding up or liquidation in its jurisdiction of incorporation.

6. Integrity and Protection of Creditors: The company must not intend to utilize the re-domiciled entity for unlawful purposes or for objectives contrary to the public interest. The application must not be aimed at defrauding the company’s existing creditors and must be submitted in good faith.

Legal and Tax Implications

• Registered Office: The registered office of a re-domiciled company must be located in Hong Kong.

• Compliance with Local Regulations: Upon re-domiciliation, companies will be regarded as locally registered entities and must adhere to the relevant requirements set forth under the Companies Ordinance (CO).

• Continuity of Legal Entity: Re-domiciliation does not establish a new legal entity and will not impact the business continuity of the company. This process ensures that the company's property, rights, obligations, liabilities, and contractual and legal processes remain unaffected.

• Tax Considerations: Generally, a company, irrespective of its place of incorporation or domicile, will be subject to Hong Kong profits tax on profits arising in or derived from trade, profession, or business activities conducted in Hong Kong. To mitigate double taxation, re-domiciled companies may claim unilateral tax credits against the Hong Kong profits tax payable on income earned after re-domiciliation. If a company has been assessed with a tax of a substantially similar nature to Hong Kong profits tax in its original jurisdiction upon exit or de-registration, it may also claim a unilateral tax credit.

Application Process

The Companies Registry has implemented an efficient procedure for processing re-domiciliation applications. Upon receipt of a complete submission accompanied by all necessary documentation, the Registrar of Companies expects to process applications within approximately two weeks. This expedited timeline underscores Hong Kong's commitment to upholding its reputation for business-friendly administrative practices.

Successful applicants are issued a certificate of re-domiciliation, which initiates significant post-approval obligations. Within 120 days of receiving the certificate (or a longer period if approved by the Registrar), the company must complete the deregistration process in its original jurisdiction and submit evidence of this deregistration to the Hong Kong authorities. This requirement ensures proper closure in the home jurisdiction and formalizes the company’s new status as a Hong Kong-domiciled entity.

Note: For companies operating in the insurance and banking sectors, non-Hong Kong-incorporated authorized insurers, authorized institutions, holding companies of authorized institutions, or approved money brokers must obtain prior assessment from the Insurance Authority or the Hong Kong Monetary Authority, as applicable, before submitting an application for re-domiciliation.

Conclusion

 As Hong Kong continues to enhance its corporate governance ecosystem, the re-domiciliation regime serves as a testament to the jurisdiction’s adaptability and proactive approach in addressing the needs of contemporary global business. Its implementation is expected to significantly influence corporate structuring decisions throughout the Asia-Pacific region in the future.

Should you have any inquiries or require assistance in this regard, please do not hesitate to contact us at info@brasia.hk.