[Annual Expenses for Limited Companies] What are the Annual Costs for Establishing a Limited Company in Hong Kong?
In Hong Kong, many aspiring entrepreneurs have questions about the annual fees associated with maintaining a limited company. This article aims to provide a breakdown of the annual expenses associated with operating a limited company in Hong Kong, helping individuals plan their budgets effectively.
The typical annual expenses for establishing and maintaining a limited company in Hong Kong include Business Registration Fees, Annual Return Filing Fees, Accounting, Audit, and Taxation Costs, as well as Profits Tax obligations.
Business Registration Fees
Starting from April 1, 2023, the Business Registration Certificate fee has been reinstated to $2,150. Below is the latest fee schedule for business registration (subject to potential future changes by the Hong Kong government):
Annual Return Government Fee
Under Hong Kong's Companies Ordinance, limited companies are required to submit an annual return each year, for which the government levies a fee of 105 Hong Kong dollars. Please note that the government fee mentioned here represents the situation as of the time of this publication, and it may be subject to changes by the Hong Kong government in the future. It is crucial to ensure timely submission to avoid penalties.
Accounting, Auditing, and Taxation Fees
As for the fees related to accounting, auditing, and taxation services, the charges vary for each accounting firm and depend on factors such as the size of the company, transaction volume, industry, and the completeness of relevant documents. In general, for small to medium-sized companies, these fees typically range from $6,000 to $12,000. If you require accounting, auditing, taxation, or related services, please feel free to contact us.
Under Hong Kong's tax regime, the profits tax rate for the first two million Hong Kong dollars of a company's profit is 8.25%, and any amount exceeding this is taxed at a rate of 16.5%. Typically, the Hong Kong government provides some tax concessions each year, and you can stay informed about these changes by visiting the Inland Revenue Department's official website or checking our accounting updates. Additionally, it's important to note that the government collects provisional taxes based on the profit for the assessment year, so please be mindful of this.
Establishing a limited company is a challenging and rewarding adventure, but it also requires careful financial planning. Having a comprehensive understanding of the maintenance costs for a company can help you budget effectively. If you would like to learn more about accounting services or need further information, please feel free to contact our professional team.
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