On 20 December 2024, the Hong Kong Government published a Bill to amend the Companies Ordinance to introduce a mechanism for redomiciliation. The bill was tabled in the Legislative Council on 8 January 2025. Once passed, foreign companies will be able to transfer their incorporation to Hong Kong while maintaining their legal personality and business continuity.
The main provisions of the proposed redomiciliation regime are:
- Redomiciliation procedure:
Companies that meet the established requirements will be able to redomicile to Hong Kong without having to liquidate or reincorporate. This will preserve their legal identity and business continuity.
- Tax considerations:
A redomiciled company will be treated as incorporated in Hong Kong for tax purposes. However, under Hong Kong's territorial tax system, it is not subject to income tax until it commences business operations in the region.
Under certain conditions, unilateral tax credits may be granted for taxes paid on unrealized profits in the jurisdiction of original incorporation or domicile.
Transitional tax mechanisms will be introduced to clarify the tax treatment of various assets and liabilities. However, these measures do not apply to companies that were already doing business in Hong Kong prior to redomiciliation.
"The redomiciliation mechanism is designed to ensure a level playing field for all market participants and simplify the process of relocating a business to Hong Kong. This helps to increase the attractiveness of Hong Kong for foreign companies interested in a stable and favorable business environment."
By contacting us, you will receive:
Advice on redomiciliation of companies to Hong Kong, including an analysis of requirements and procedures.
Consultations on tax planning and tax optimization in accordance with Hong Kong legislation.
Assessment of the benefits and potential risks of moving a business to Hong Kong.
Support for the redomiciliation process, including preparation of necessary documents and interaction with regulatory authorities.
Support on corporate governance issues, including development of internal policies and procedures that comply with local requirements.
