Cost to close a Hong Kong company

The Cost to Close a Hong Kong Company Varies by Method

The cost to close a Hong Kong company depends on the route it qualifies for. A solvent company with no liabilities or remaining assets can apply for deregistration, which carries lower government fees but still involves professional service costs. Liquidation is mandatory for a company with debts or unresolved disputes, or where assets remain to be realised. Liquidator and court fees make this process significantly more expensive. Government fees and professional rates change, so check official sources for current figures.

Hong Kong Company Deregistration Fee

Deregistration under section 751 of the Companies Ordinance (Cap. 622) is the lower-cost option. The application is made on Form NDR1 and must be accompanied by a notice of no objection from the Commissioner of Inland Revenue. The Hong Kong company deregistration fee payable to the Companies Registry is set by regulation and is relatively modest. Professional fees for preparing the application, settling final accounts and handling correspondence are the larger component. A corporate services provider or a solicitor typically charges a fixed fee for a straightforward deregistration.

Hong Kong Company Liquidation Cost

Where a company cannot use the deregistration route, liquidation is required. The Hong Kong company liquidation cost is substantially higher than deregistration. In a members' voluntary liquidation, directors must make a declaration of solvency and the members appoint a liquidator. The liquidator's fees are charged by the hour or as a fixed engagement and cover the work of realising assets, paying creditors and reporting to members. In a creditors' voluntary liquidation or a compulsory winding up, court fees and the liquidator's fees are generally higher still because the company is insolvent and the case is more complex.

Form NDR1 Fee Hong Kong

The application for deregistration on Form NDR1 must be submitted to the Companies Registry with a filing fee. The exact Form NDR1 fee Hong Kong is published on the Companies Registry's fee schedule and should be checked at the time of application, as the amount is revised periodically. No further Companies Registry fee is charged after deregistration is granted, but the company must have already settled all outstanding annual return registration fees and penalties before the application can proceed.

Liquidator Fees Hong Kong

The largest single cost in a liquidation is the professional charge for the liquidator. The liquidator fees Hong Kong are not fixed by statute. In a members' voluntary liquidation, the liquidator may quote a fixed fee based on the company's anticipated asset value and the expected time required. In a creditors' voluntary liquidation, the liquidator's fees are subject to approval by the creditors or the court. The liquidator also incurs disbursements such as gazette notices, postage and storage of company records. These costs are paid from the company's assets before any distribution is made to members or creditors.

Other Costs to Budget for

Before either route can begin, the company must complete its final audit and file its final profits tax return with the Inland Revenue Department. The audit fee is a separate professional charge. The notice of no objection from the Commissioner of Inland Revenue is free of charge, but the company must have no outstanding tax returns, no unpaid tax and no objection from any known creditor. Cancelling the business registration certificate with the Inland Revenue Department should also be arranged, and there is no fee for that step. The company must also settle any late filing penalties for overdue annual returns or tax returns before closing. The Companies Registry will not process a deregistration application if there are outstanding higher registration fees for late Form NAR1 filings.

Summary of Cost Structure

The table below sets out the typical cost categories for each closure method.

For the specific amounts payable to the Companies Registry and the Inland Revenue Department, visit the official fee schedules on the Companies Registry website and the Inland Revenue Department website, as these figures are outside the scope of this guide.