Accounting and audit support in Hong Kong
Hong Kong audits every company and exempts only dormant ones, and the reporting exemption relieves disclosure rather than the audit. We build the year so it can be signed.
Audit exemption
Освобождение
dormant only
только спящие
Annual return in
Годовой отчёт за
42 days
42 дня
Annual return fee
Пошлина отчёта
HK$105
105 HK$
Records not kept
Нет записей
up to HK$100,000
до 100 000 HK$
When you need accounting and audit support in Hong Kong
Somebody told you the audit is optional
It is not. Every company here has its statements audited, and the only way out is dormancy, which is a legal state rather than a description of a quiet year.
The reporting exemption sounded like relief
It trims what has to be disclosed and it leaves the audit exactly where it was. Owners who read it as an exemption from auditors lose a year finding out.
The books were kept in a spreadsheet
An auditor signs an opinion on evidence rather than on totals. A year assembled from bank exports has to be rebuilt before anyone can express a view on it.
You went dormant without the paperwork
Trading stopped, so the company was treated as dormant. Dormancy is entered deliberately, and a company that merely went quiet still owes an audit.
The annual return date crept up
It runs from the anniversary of incorporation and has its own fee ladder. Missing it costs many times the ordinary charge, and it has nothing to do with the tax year.
What you get
- A clear answer on whether dormancy is available to you
- Books an auditor can trace to contracts and bank records
- A close calendar built backwards from the audit
- The annual return delivered inside its own window
- Records kept in a form the revenue department accepts
What is required for accounting and audit in Hong Kong
The Hong Kong question is never how big you are. Neither the audit nor the record-keeping duty has a revenue threshold anywhere in it, and the relief most owners think they hold turns out to relieve something else entirely.
The same service with no country in it lives at accounting support; the return, its date and the positions in it sit with profits tax returns, and our Hong Kong page carries the remaining local work.
Three states a company can be in
Ordinary company
Directors prepare financial statements for each financial year under section 379, and section 405 requires those statements to be audited. Size never enters the test.
Within the reporting exemption
Disclosure gets lighter: no auditor's remuneration, no true and fair requirement under section 380(7), no true and fair opinion under section 406(1)(b), no business review. The audit itself stays.
Dormant
The only genuine exemption, under section 447. It is a status the company enters by resolution and maintains by having no accounting transactions, and losing it restores the audit.
What the revenue department asks separately
Section 51C of the inland revenue ordinance requires every person carrying on a business here to keep sufficient records, in English or Chinese, so that assessable profits can be readily ascertained. They are retained for not less than seven years.
That duty runs on its own, independent of company law and of whether anyone asks to see anything. Failing it without reasonable excuse carries a fine of up to HK$100,000, and the department does not have to prove tax was lost.
The filing the calendar forgets
A private company delivers its annual return on form NAR1 within 42 days of the anniversary of incorporation. Inside the window the registration fee is HK$105; outside it the ladder runs from HK$870 to HK$3,480.
A private company with a share capital does not attach its financial statements to that return, which is why the audit and the annual return are two separate deadlines that owners routinely merge into one.
Sources: preparation, audit and the reporting exemption — Companies Registry on accounts and audit, sections 379, 380(7), 405, 406(1)(b) and 447; the annual return, its window and the fee ladder — Companies Registry, annual return; records and the fine — Inland Revenue Department, record keeping, section 51C.
Stages of work
Settling the company's state before anything else.
Ordinary, within the reporting exemption or genuinely dormant. Each answer produces a different year, and the last one is available far less often than owners hope, so we test it against the conditions rather than against the turnover.
Rebuilding whatever the opening balances rest on.
Prior statements, the last audited figures, unreconciled accounts and anything carried forward without support. An opening balance nobody can explain becomes an audit qualification no matter how clean the current year is.
Posting against evidence rather than bank lines.
Contracts, invoices, acceptance, payroll and intercompany agreements are attached to the entries they justify. Foreign currency balances get consistent dates and rates, because inconsistent ones surface in the audit and not before.
Closing on a calendar built backwards.
The close dates are set from when the audit must finish rather than from when the month ends. Reconciliations, cut-off, accruals and fixed assets have named owners and a decision date for every open item.
Running the audit as a query log.
Schedules and confirmations are delivered in one indexed set, auditor questions are tracked to closure, and agreed adjustments are posted with the reasoning preserved rather than pasted over.
Keeping the two registry dates apart.
The annual return is diarised from the incorporation anniversary and delivered inside 42 days; the audited statements follow the financial year. We carry both dates, and the seven-year archive, into the next cycle.
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