How long must I keep accounting records in Hong Kong

How Long Must I Keep Accounting Records in Hong Kong

Keep your company's accounting records for seven years. The Companies Ordinance (Cap. 622) mandates this period for every Hong Kong incorporated company, trading or dormant.

Hong Kong Accounting Records Retention Period

The retention period is seven years from the transaction date or the financial year-end, whichever is later. Records must be sufficient to show and explain the company's transactions and disclose its financial position with reasonable accuracy. Directors must produce records that allow a reader to understand the company's financial position without relying on memory or external sources.

Seven Years Record Keeping Hong Kong

The seven-year rule covers all underlying documents, not just the final accounts. This includes invoices, receipts, bank statements, contracts, vouchers, and any other supporting documents. The requirement applies to both paper and electronic records. If you keep records outside Hong Kong, you must still send to and keep in Hong Kong accounts and returns sufficient to disclose the financial position.

Companies Ordinance Record Keeping

The Companies Ordinance (Cap. 622) requires accounting records be kept for seven years after they are made. Failure to do so is an offence; directors may be held personally liable. Keep records at the company's registered office or another place the directors think fit. Notify the Companies Registry of the location on Form NR2 if it is not the registered office.

What the Records Must Contain

Your accounting records must show and explain the company's transactions. They must disclose the financial position with reasonable accuracy at any time. Directors must be able to produce a balance sheet and profit and loss account from the records at any point during the seven-year period. The records must also enable the auditor to carry out the statutory audit and prepare the audited financial statements delivered to the Companies Registry with the annual return.

Application to Dormant Companies

A dormant company is not exempt from the seven-year requirement. Even if declared dormant with no significant accounting transactions, it must retain whatever records exist for the full seven years. The exemption from delivering an annual return does not extend to the underlying accounting records. Directors remain responsible for ensuring the records are kept and available for inspection.

Practical Steps

Directors must ensure the company's accounting records are stored securely and retrievable throughout the seven-year period. If the company closes, the records must still be kept for the remainder of the seven years. The Inland Revenue Department also expects records to be kept for seven years, running from the end of the relevant year of assessment. Disposing of records before the seven years have passed risks prosecution and penalties.