What is the Re-domiciliation Regime? Advantages of Relocating Company Registration to Hong Kong
- 炒年糕的貓貓
- May 22
- 3 min read
Updated: May 26
As the global economic landscape evolves, businesses are increasingly seeking flexibility in their place of incorporation. To enhance its competitiveness, the Hong Kong government has introduced a “Re-domiciliation Regime,” allowing overseas companies to move their place of incorporation to Hong Kong without the need for liquidation.
What is the Re-domiciliation Regime?
Hong Kong’s Re-domiciliation Regime was first introduced in November 2021, applicable to Open-ended Fund Companies (OFCs) and Limited Partnership Funds (LPFs), aiming to attract overseas funds to register in Hong Kong. As of May 2024, the regime has been expanded to cover general commercial entities. It allows foreign-incorporated companies to retain their legal entity status and relocate their registration to Hong Kong without needing to establish a new company.
Why Does Hong Kong Need a Re-domiciliation Regime?
Leverage Hong Kong’s Business Advantages
Sound Legal System: A well-established legal framework that ensures contractual certainty and reduces legal risks.
Low Tax Environment: Profits tax is 8.25% on the first HKD 2 million and 16.5% thereafter, with no VAT.
International Professional Services: A mature ecosystem of financial, legal, and accounting services.
Gateway Role: Acts as a two-way bridge between Mainland China and global markets, facilitating cross-border financing.
Limitations of the Previous Mechanisms
Previously, companies wishing to relocate their place of incorporation to Hong Kong typically had to:
Liquidate the original company and re-incorporate in Hong Kong – a time-consuming and costly process, with risks of losing contracts or assets.
Use a court-sanctioned restructuring scheme – complicated procedures involving shareholder meetings and high legal expenses.
The Re-domiciliation Regime now offers a more streamlined alternative, enabling businesses to transfer their registration without business interruption.
4 Key Advantages of the Re-domiciliation Regime
Retention of Legal Entity: No need to re-incorporate, preserving corporate history, contracts, and assets.
Lower Costs and Administrative Burden: Avoids the expenses of liquidation or court proceedings.
Tax Certainty: Existing tax obligations remain unaffected, and the company can transition into Hong Kong’s profits tax regime.
Better Financing Opportunities: Easier access to Hong Kong’s capital markets, enhancing fundraising flexibility.
Approval Mechanism for Re-domiciliation in Hong Kong
The Companies Registry is responsible for reviewing applications, with key considerations including:
Type Matching: The company type must correspond with a category recognized in Hong Kong.
Legal Compliance: Completion of required procedures in the original jurisdiction.
Shareholder Consent: 75% shareholder approval is needed if not otherwise specified by the original jurisdiction.
Financial Soundness: Must be able to meet debt obligations for the next 12 months and not be at risk of liquidation.
Compliance and Integrity: The company must not be involved in unlawful activities or pose a threat to national security.
International Comparison: Hong Kong vs. Singapore vs. Cayman Islands
Hong Kong |
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Singapore |
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Cayman Islands |
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Hong Kong is ideal for China/Asia-focused businesses, offering the best tax benefits and convenience.
Conclusion: The Future Impact of Hong Kong’s Re-domiciliation Regime
Hong Kong’s Re-domiciliation Regime is a strategic tool for companies expanding into Asia or optimizing operational costs. Whether for Mainland enterprises going global or international firms restructuring their tax setup, this policy offers exceptional flexibility.
If you are planning to set up a company in Hong Kong, feel free to contact Oceanus Strategic. Our team is ready to provide professional guidance. Stay tuned for more insightful articles in the future.
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