When should I file the annual return? What is the registration fee?

There is a lot of accounting work to be done by a limited company every year. Among them, the annual return filed with the Companies Registry is a matter that every manager needs to know. Failure to file on time could result in prosecution and a fine of nearly $4,000. Therefore, this article will summarize various points about the annual return.

What is an annual return?

The Hong Kong Companies Registry will understand and review the company’s financial and legal operations from the disclosed information through the annual return (NAR1 form) submitted by the company every year to ensure its legal compliance and will be kept in the Companies Registry as a public record.

A Hong Kong-registered private limited company is required to submit an annual return and annual registration fee to the Companies Registry by post or in person within a specified time limit; an unlimited company is not required to submit an annual return.

In the annual return, important company information, such as company office address, details of directors and company secretary, etc., will need to be reported and may be used as important supporting documents in financial statement audits, applications for government subsidies, or licenses, etc.

When is the annual return due?

The deadlines for annual returns vary by company type. Corporations need to deliver the form to the Registrar of Companies within 42 days (including Sundays and public holidays) after the establishment date of each year, otherwise, they will face fines, and even if the company is not in business, the annual filing is still required declaration form.

Following the implementation of the Companies Ordinance (Cap. 622) (3 March 2014), the deadlines for filing annual returns are:

• Private companies: delivery of the form within 42 days after the anniversary date of the company’s incorporation date;

• Public company: The form should be delivered within 42 days after the anniversary date of the company’s establishment date; if the company’s financial year starts on or after March 3, 2014, the form should be delivered within 42 days after the company’s “Return Date”. “Return Date” is 6 months after the end of the accounting reference period;

• Guarantee company: The form should be delivered within 42 days after the anniversary of the company’s establishment date; if the company’s financial year starts on or after March 3, 2014, the form should be delivered within 42 days after the company’s “Return Date”. The “Return Date” is 9 months after the end of the accounting reference period.

What is the annual return fee?

According to the Companies (Fees) (Amendment) Regulation 2020, the registration fee for annual returns delivered up to 30 September 2022 will be waived, but the waiver does not apply to the late delivery of annual returns.

For the registration fee for the annual return, the annual registration fee for a local limited company is HK$105, but if the annual return is not delivered within the prescribed time limit of 42 days, the registration fee may be significantly increased from HK$870 RMB to RMB 3,480.

Penalty for late filing of annual return

If the annual return is late due to various reasons, fines will be imposed as follows:

• More than 42 days from the company filing date, but within 3 months $870

• More than 3 months from the date of company filing, but within 6 months of $1,740

• More than 6 months from the date of company filing, but within 6 months of $2,610

• Over 9 months from the date of company filing $3,480

In addition, once the company continues to violate the law, the responsible person can be prosecuted, and the maximum fine is HK$50,000 and the maximum daily fine is HK$1,000, and the blame will be placed on the directors.

The above information is for reference only. If you have any questions about tax declaration and accounting, we welcome your inquiries.