How to close a Hong Kong branch or representative office of a foreign company

Close a Hong Kong Branch: Steps and Forms

Closing a Hong Kong branch is not the same as winding up a local company. The branch exists as a registered non-Hong Kong company under Part 16 of the Companies Ordinance (Cap. 622). Two routes are available. Deregistration suits a solvent branch with no liabilities. Liquidation applies where liabilities remain or the branch is insolvent. Both routes require a notice of no objection from the Inland Revenue Department (IRD). Both require final accounts and a final tax return. Both require cancellation of the business registration certificate.

Hong Kong Branch Deregistration

Deregistration is the simpler route. The branch must have ceased business. It must have no outstanding liabilities. It must hold the consent of its parent company. File Form NN1 (Application for Deregistration of a Registered Non-Hong Kong Company) with the Companies Registry.

Before filing, obtain a written notice of no objection from the Commissioner of Inland Revenue. The IRD issues this only after confirming no outstanding tax liabilities and receiving all required returns, including the final profits tax return.

Cancel the business registration certificate with the IRD by notifying them in writing and surrendering the certificate. The IRD confirms the cancellation. That confirmation is a prerequisite for the deregistration application.

The Companies Registry publishes a Gazette notice upon receiving Form NN1 and the IRD notice of no objection. If no objection is raised within three months, the branch is dissolved. Deregistration takes effect on the date the Registrar publishes the notice of dissolution in the Gazette.

Hong Kong Branch Liquidation

A branch with outstanding liabilities or insolvency cannot use deregistration. It must be wound up.

For a solvent branch, a members' voluntary liquidation applies. The directors of the non-Hong Kong company make a declaration of solvency. A liquidator is appointed to realise assets, settle liabilities, and distribute any surplus. The liquidator files Form NN3 (Notice of Appointment of Liquidator of a Registered Non-Hong Kong Company) with the Companies Registry.

An insolvent branch requires a creditors' voluntary liquidation. The liquidator convenes a meeting of creditors and files the appropriate forms. In either case, the liquidator must submit final accounts and a final return to the IRD and obtain a notice of no objection before the branch can be dissolved.

Compulsory winding up by court order is also possible, typically on a creditor's petition. The court appoints a liquidator who follows the same steps.

Close Representative Office Hong Kong

A representative office is not a registered non-Hong Kong company under Part 16 of Cap. 622. It is registered only with the IRD under the Business Registration Ordinance (Cap. 310). The steps are narrower:

1. Cease all business activities.
2. File a final profits tax return with the IRD.
3. Cancel the business registration certificate by notifying the IRD in writing and surrendering the certificate.
4. Obtain a notice of no objection from the Commissioner of Inland Revenue confirming no outstanding tax liabilities.
5. Notify the Companies Registry if the representative office was also registered as a non-Hong Kong company. This is uncommon but possible. If it was not, no Companies Registry filing is needed.

The representative office is dissolved once the IRD confirms the cancellation and issues the notice of no objection.

Non-Hong Kong Company Closure Hong Kong

Part 16 of Cap.622 governs closure of a branch or representative office that is a registered non-Hong Kong company.The branch is not a separate legal entity.Its liabilities remain those of the parent company.The parent company must settle all Hong Kong liabilities before the branch is dissolved.

The steps:

• Cease business operations in Hong Kong.
• Settle all outstanding liabilities,including tax,employee entitlements,and contractual obligations.
• File final audited financial statements and a final profits tax return with the IRD.
• Obtain a notice of no objection from the Commissioner of Inland Revenue.
• Cancel the business registration certificate.
• Apply for deregistration on Form NN1 if solvent,or appoint a liquidator on Form NN3 if insolvent.
• The Companies Registry publishes a Gazette notice.After three months with no objections,the branch is dissolved.

Forms and Filing Requirements

Three forms matter.

Form NN1: Application for Deregistration of a Registered Non-Hong Kong Company.For solvent branches with no liabilities.

Form NN3: Notice of Appointment of Liquidator of a Registered Non-Hong Kong Company.For voluntary liquidations where a liquidator is appointed.

Form IRBR1: Application for Cancellation of Business Registration.Filed with the IRD to cancel the business registration certificate.

The IRD does not provide a standard form for the notice of no objection.Write to the Commissioner of Inland Revenue requesting the notice,attaching final accounts and the final tax return.The IRD issues the notice once satisfied.

Final Audit and Final Return

The IRD requires final audited financial statements covering the period from the end of the last accounting period to the date of cessation of business.A Hong Kong certified public accountant must audit these accounts.File the final profits tax return(Profits Tax Return - BIR51)together with the audited accounts.The IRD assesses any final tax liability and issues the notice of no objection only after all tax is paid.

Business Registration Certificate

Cancel the business registration certificate separately with the IRD.Notify the IRD in writing of the cessation of business and surrender the certificate.The IRD issues a confirmation of cancellation.The Companies Registry will not process the deregistration or dissolution without this step.

Outstanding Liabilities

Settle all outstanding liabilities before closure.These include:

• Tax liabilities:profits tax,property tax,stamp duty.
• Employee entitlements:wages,severance pay,long service pay.
• Contractual obligations:rent,supplier invoices.
• Any other debts.

If liabilities remain,deregistration is not available.The branch must enter liquidation.The liquidator realises assets to pay creditors.Alowing a branch to be struck off without settling liabilities does not extinguish the parent company's obligations.

Struck Off Vs.Deregistration

The Registrar may strike a registered non-Hong Kong company off the register if there is reasonable cause to believe it is not carrying on business.Being struck off is not a substitute for deregistration or liquidation.The parent company's obligations and outstanding liabilities survive.Alowing filings to lapse does not extinguish them.The branch may be restored to the register by administrative restoration or court order,but that is a separate process.Follow the deregistration or liquidation steps set out above.

Summary of Steps

For further details,refer to the Companies Registry website(cr.gov.hk)and the Inland Revenue Department website(ird.gov.hk).