Your obligations
What Hong Kong law requires from every limited company
Hong Kong's tax system is simple, but it is not "no paperwork". Three things are compulsory every year, regardless of whether your company made a profit, traded in Hong Kong, or traded at all.
1. Proper books of account
Section 373 of the Companies Ordinance: records that explain every transaction and allow accurate financial statements, kept for 7 years.
2. Annual statutory audit
Financial statements prepared under HKFRS (or the SME-FRS) and audited by a Hong Kong CPA (Practising) — no size exemption.
3. Profits Tax Return
Filed with the IRD together with the audited accounts and a tax computation — even if a loss is reported or an offshore claim is made.
Late or missing returns are expensive. The IRD issues estimated assessments, surcharges of 5–10% and penalties of up to three times the tax undercharged. Directors can be prosecuted. Banks routinely ask for the latest audited accounts during periodic reviews — a missing audit can lead to account closure.
What we do
The complete accounting cycle, under one roof
Bookkeeping & management accounts
- Monthly, quarterly or annual bookkeepingFrequency matched to your volume and reporting needs
- Bank, payment-gateway and marketplace reconciliationsStripe, PayPal, Amazon, Shopify, Airwallex, Statrys
- Accounts receivable & payable ledgers
- Multi-currency accounting (HKD, USD, EUR, CNY and more)
- Management reports: P&L, balance sheet, cash flowMonthly or quarterly, with commentary on request
- Cloud accounting set-up and migrationXero or QuickBooks Online, with bank feeds
Financial statements & statutory audit
- Annual financial statements under HKFRS or SME-FRS
- Audit file preparation and schedulesWe prepare everything the auditor needs — fewer questions, lower audit fees
- Coordination of the statutory audit with partner CPA firmsIndependent Hong Kong CPA (Practising) firms
- Audited accounts for bank reviews, investors and visas
- Consolidated group accounts where required
- Dormant company accounts and declarations
Tax compliance
- Profits Tax Return (BIR51) and tax computation
- Offshore profits claim preparation and IRD correspondenceWith our tax advisers — see Tax Planning
- Employer's Return (BIR56A / IR56B) for staff
- Provisional tax, holdover applications and objections
- Responses to IRD enquiries and field audits
- Certificate of Resident Status for treaty benefits
Payroll & MPF
- Monthly payroll calculation and payslips
- MPF enrolment, contributions and remittance statements
- Employment contracts and leave records
- Salaries Tax guidance for directors and expatriates
Packages
Fixed annual fees, sized to your business
We price by the number of transactions and the complexity of your operations — not by the hour. You know the full-year cost before we start. Every package includes the audit coordination and the Profits Tax Return.
| Package | Starter | Growth | Scale |
|---|---|---|---|
| Typical profile | New or small company, up to ~120 transactions / year | Active trading or services, up to ~600 transactions / year | High-volume e-commerce, multiple currencies, staff |
| Bookkeeping frequency | Annual | Quarterly | Monthly |
| HKFRS / SME-FRS financial statements | |||
| Statutory audit coordination | |||
| Profits Tax Return & computation | |||
| Management reports | Quarterly | Monthly + commentary | |
| Xero subscription & bank feeds | Optional | ||
| Payroll & MPF | Up to 3 staff | Up to 10 staff | |
| Dedicated accountant | Shared | ||
| Indicative annual fee | from US$1,500incl. audit fee | from US$3,200incl. audit fee | Custombased on volume |
Fees are indicative and depend on transaction volume, number of bank accounts and currencies, inventory, and group structure. Audit fees are set by the independent CPA firm and passed through at cost. Dormant company package (accounts + dormancy declaration) available from US$650.
Bundle and save. Clients who combine accounting with our company secretary service receive a discounted annual compliance package and a single renewal invoice covering everything.
Annual cycle
How a typical year looks with iCorp.HK
- Year-end closeWe reconcile all accounts, chase missing documents and finalise the trial balance.Month 1
- Financial statementsHKFRS accounts and full audit schedules prepared and sent to the CPA firm.Month 2
- AuditAuditor's queries handled by us; you sign the directors' report and representation letter.Month 3–4
- Tax filingTax computation and Profits Tax Return filed with the IRD before the (extended) deadline.Month 4–5
Key tax dates
Profits Tax Returns issued
Bulk issue by the IRD on the first working day of April.
Deadline — 31 March year-end
Extended deadline under the block extension scheme for represented clients.
Deadline — 31 December year-end
Extended deadline; a further extension to 31 January applies for loss cases.
First return for new companies
Issued ~18 months after incorporation; 3 months to file, with first accounts covering up to 18 months.
We recommend a financial year-end of 31 March or 31 December for most clients — it aligns with the IRD's extension scheme and gives the longest filing window. We'll advise on the best date when you onboard.
Tax efficiency
Offshore profits claims — done right
Hong Kong taxes profits by source, not residence. If your contracts are negotiated and concluded abroad, your goods never touch Hong Kong, and your team operates outside the city, your profits may be non-taxable in Hong Kong. But the claim has to be supported by evidence — and the IRD scrutinises every one.
- Eligibility assessment before you rely on exemption
- Documentation framework: contracts, correspondence, travel and shipping records
- Preparation of the claim within the Profits Tax Return
- Handling IRD enquiry letters and follow-up questions
- Advice on substance, FSIE rules and double-tax treaty interaction
- Alternative: Certificate of Resident Status where treaty benefits are more valuable
Audited accounts are still required for offshore companies — an exemption from tax is not an exemption from audit. Learn more about tax planning →
Getting started
Switching accountants or starting fresh is simple
- Bank and payment statementsFull-year statements for every account, gateway and marketplace — or simply connect bank feeds in Xero.
- Sales and purchase invoicesUploaded to a shared folder or captured automatically with Dext / Hubdoc.
- Prior-year audited accounts and tax filingsIf the company has traded before — we review them for issues and carry forward balances.
- Key contracts and agreementsLoans, leases, service agreements, shareholder loans — anything that affects how transactions are recorded.
Behind on filings? We routinely bring companies with several years of outstanding accounts up to date, negotiate with the IRD on penalties and get the company back on a clean schedule.
FAQ
Accounting & audit in Hong Kong — frequently asked questions
Yes. Unlike many jurisdictions, Hong Kong has no small-company audit exemption. Every limited company must have its annual financial statements audited by a Hong Kong CPA (Practising) and present them to shareholders. The only exception is a company that has formally declared itself dormant under section 5 of the Companies Ordinance.
Your first return arrives about 18 months after incorporation and must be filed within 3 months. After that, returns are issued every April. Under the block extension scheme for represented taxpayers, companies with a 31 March year-end have until mid-August and those with a 31 December year-end until mid-November. We apply for the extensions automatically.
Under the two-tiered regime, the first HK$2 million of assessable profits is taxed at 8.25% and anything above at 16.5%. Only one company in a group of connected entities may claim the lower tier. There is no VAT/GST, no capital gains tax and no withholding tax on dividends or interest paid to non-residents.
It depends on volume and complexity. A small company with a few dozen transactions a year can expect a combined bookkeeping, audit and tax filing package from around US$1,500. Active trading companies typically pay US$3,000–6,000 per year. We review your bank statements and give a fixed quote within 24 hours — with no hourly surprises.
If the company had no accounting transactions at all during the year, it can pass a special resolution to become dormant and be exempt from the audit requirement. If there was any activity — even paying the Business Registration fee from the company's bank account — a full audit is required. We offer a low-cost package for inactive companies.
Possibly. If the operations that generate your profits — negotiating and signing contracts, sourcing, delivery, service provision — take place entirely outside Hong Kong, you can lodge an offshore claim. The IRD will issue detailed enquiries, and the burden of proof is on the company. We assess eligibility first and, where appropriate, build the documentation so the claim withstands scrutiny.
Yes. We are experienced with Xero and QuickBooks Online and can set up bank feeds from most Hong Kong banks and fintech accounts. You get read-only (or full) access to your ledger, dashboards and reports at any time. For very small companies, annual bookkeeping from statements is also available at lower cost.