Audit and accounts for a Hong Kong company

Updated 7 October 2026

The tax authority requires audited accounts from almost every company, and the annual return is due within 42 days. We prepare the accounts, arrange the audit and file everything on time.

In Hong Kong almost every company needs an audit: the Inland Revenue Department requires audited financial statements to be filed with the profits tax return, with an exception only for dormant companies that have formally declared they are inactive. In addition, a private company files an annual return with the Companies Registry every year, and the fee multiplies if it is late. Below: deadlines, fees, tax rates and how we work.

Who needs accounts and an audit in Hong Kong

• A trading or service company with turnover, even if its clients and suppliers are outside Hong Kong: every company files a return, and the territorial exemption is claimed in that return.
• A holding company receiving dividends, interest or gains on the sale of shares: such foreign-sourced income is taxed in Hong Kong if the company belongs to a multinational group and does not meet the exemption conditions.
• A company with no turnover that wants to file nil accounts: it needs formal dormant status, otherwise an audit is mandatory.
• An owner selling or closing the company: without accounts for every year the tax office will not issue its consent to deregistration, and a buyer will not take the company.

Annual return to the Companies Registry

A private company files an annual return every year except the year of incorporation, within 42 days after the anniversary of its incorporation date. The fee depends on how late the return is.

Profits tax and audit

• Rates. The first HK$2 million of profit, about $260,000, is taxed at 8.25%, the rest at 16.5%. Among connected entities, only one nominated entity can use the lower rate.
• Audit. Audited financial statements are filed with the company's profits tax return. Small corporations with income up to HK$2 million must also file supporting documents.
• Dormant companies. If a company has filed a special resolution with the Registry to become dormant, it is exempt from audit, and the Inland Revenue Department accepts its return without audited statements.
• Employer's return. If the company has staff, it files a separate annual employer's return of remuneration.

Deadlines step by step

Mandatory annual payments

The Hong Kong dollar is pegged to the US dollar within a 7.75-7.85 band; dollar amounts use a rate of about 7.8, rounded up.

Restrictions for certain nationalities

Hong Kong law does not restrict directors and shareholders by nationality: a citizen of any country can own a company, and there is no need to visit in person for accounts or an audit. Restrictions arise on the side of banks and auditors.

Hong Kong enforces UN Security Council sanctions, and banks also take US and EU sanctions lists into account. As a result, clients connected with Russia, Belarus, Iran and a number of other countries are checked for longer and more often asked to prove the source of funds and links with counterparties. An auditor will not sign the accounts without being able to verify the transactions on the account, so documents for every large deal are collected as it happens rather than at year end.

How we work

1. Checking the status. Whether there is activity, whether full audited accounts are needed or dormant status fits.
2. Collecting documents. Bank statements, contracts and invoices for the financial year.
3. Preparing the accounts under Hong Kong rules and calculating tax on the two-tier scale.
4. Arranging the audit with a Hong Kong auditor and closing their queries.
5. Filing the profits tax return with audited statements, the annual return within 42 days and the employer's return.
6. Supporting tax audits and, if the company is no longer needed, deregistering it.

Common mistakes

• Treating a company with no turnover as dormant automatically. The status arises only after a special resolution is filed with the Registry.
• Missing the 42 days. The fee jumps from HK$105 to HK$870 at once, and to HK$3,480 after 9 months.
• Using the lower rate in several group companies. Only one nominated company is entitled to it.
• No bank statements or contracts. Without them the auditor will not sign the accounts, and without an audit the return cannot be filed.
• Claiming offshore income without evidence. The tax office checks a territorial exemption against contracts, correspondence and where deals were concluded; without them the income is fully taxed.
• Letting business registration lapse. Operating without a valid certificate is an offence that is fined, and a bank asks for the certificate during its client review.

What we do

We prepare the accounts and arrange the audit, file the profits tax return, the annual return and the employer's return, support tax audits, apostille the accounts and deregister companies that are no longer needed. A nil return for a dormant company costs $3,500 with us, accounts and audit for an active company are billed by the hour from $90, and the employer's return $340. The full price list is in the table below, and the quote is fixed in writing. If you have no company yet, start with company registration in Hong Kong, and we can help open its account via business account in Hong Kong.

Fees

FAQ