On May 23, 2025, Hong Kong enacted the Companies (Amendment) (No. 2) Ordinance 2025, a significant piece of legislation that not only permits non-Hong Kong companies to re-domicile but also marks a pivotal development in the region’s business landscape by providing a streamlined and cost-effective pathway for global companies to establish a legal presence in one of the world’s most dynamic economies. This blog will explore the implications, benefits, and application process of the re-domiciliation regime, and explain how businesses can capitalize on this opportunity.
1. Introduction to Hong Kong's Re-domiciliation Regime
In May 2025, Hong Kong officially implemented the re-domiciliation regime for companies incorporated outside of Hong Kong. The regime permits foreign companies to transfer their legal domicile to Hong Kong without having to dissolve the existing company and start anew. This means that businesses can continue to operate as usual, but now under Hong Kong’s legal and regulatory framework.
For global businesses, this reform is highly attractive. Hong Kong offers a business-friendly environment with low tax rates, a strong legal system, and access to one of the world’s most dynamic financial markets. This new regime aligns Hong Kong with other jurisdictions, such as Singapore and the Cayman Islands, which have long provided re-domiciliation opportunities for international firms.
2. What is Re-domiciliation?
To understand the significance of this reform, it’s important to grasp the concept of re-domiciliation.
Re-domiciliation is the process by which a company changes its country of incorporation or legal domicile without needing to go through the process of dissolution and creating a new entity. The company retains its existing contracts, liabilities, assets, and employees, allowing it to continue operations as before, but under the jurisdiction of the new country.
Why Re-domicile?
There are several reasons why a company might choose to re-domicile to Hong Kong:
- Tax Efficiency: Hong Kong is known for its low corporate tax rates, and this can be highly beneficial for companies looking to reduce their overall tax burden.
- Market Access: By re-domiciling to Hong Kong, companies gain direct access to the Asia-Pacific market, one of the world’s fastest-growing regions.
- Favorable Legal and Regulatory Environment: Hong Kong offers a robust legal system based on common law, making it a secure and reliable place for business operations.
- Continuity of Operations: Unlike liquidation, re-domiciliation ensures that a company’s operations and identity remain unchanged.
How it Works
During re-domiciliation, the company maintains its legal identity, meaning its name, assets, contracts, and obligations remain intact. Instead of creating a new legal entity in Hong Kong, the company simply updates its legal domicile to the region. This process is simpler, faster, and more cost-effective than forming a new company from scratch.
Benefits of Re-domiciliation
- No Need to Start Over: The company retains its entire history, brand identity, and operational structure.
- Legal Continuity: Companies do not need to form a new legal entity, which could involve extensive paperwork, costs, and disruptions to business operations.
- Tax Advantages: Hong Kong’s low tax regime is a key incentive for many businesses, as the city offers favorable tax rates and potential relief from double taxation.
- Access to New Markets: Hong Kong serves as a strategic gateway to mainland China and the wider Asia-Pacific region, positioning it as an appealing destination for international companies aiming to broaden their market presence.
3. Eligibility Criteria for Re-domiciliation
Not all companies are eligible to re-domicile to Hong Kong, as specific criteria must be met to qualify for re-domiciliation. These criteria ensure that only businesses with the appropriate standing and operations can transfer their domicile to Hong Kong.
Qualifying Company Types
The following types of companies are eligible to re-domicile to Hong Kong:
- Private companies limited by shares.
- Public companies limited by shares.
- Private unlimited companies with share capital.
- Public unlimited companies with share capital.
Legal and Financial Requirements
In addition to being a qualifying company, the following legal and financial conditions must be met:
- Compliance with the laws of the original domicile: The company must have been legally operating in its current jurisdiction without any ongoing legal disputes.
- Financial solvency: The company must demonstrate financial stability and the ability to meet its debt obligations as they become due within the next 12 months.
- No ongoing liquidation proceedings: The company should not be involved in any liquidation, winding-up, or bankruptcy proceedings.
Member Consent
For the re-domiciliation process to proceed, at least 75% of the company’s members must agree to the move. This ensures that the decision to re-domicile reflects the will of the majority of the company’s shareholders.
4. Application Process
Once a company determines its eligibility for re-domiciliation, it must submit the necessary documentation to the Hong Kong Companies Registry; while the application process is straightforward, it requires careful attention to detail.
Required Documentation
- Re-domiciliation form (Form NNC6): This is the primary form that must be completed for re-domiciliation.
- Proposed Articles of Association: The company must submit its updated articles of association, which must comply with Hong Kong’s company laws.
- Legal opinion: A qualified legal practitioner from the company’s current jurisdiction must provide an opinion confirming that the company is eligible for re-domiciliation.
- Audited or unaudited financial statements: The company needs to submit financial statements, which may either be audited or unaudited, depending on the size and structure of the business.
- Notice to the Business Registration Office: The company must file the relevant forms with the Hong Kong Business Registration Office (Form IRBR5).
Submission Methods
Companies can submit their re-domiciliation application through the Hong Kong e-Services Portal or by submitting hard copies to the Companies Registry with the registration fee.
5. Post-Re-domiciliation Obligations
Once the re-domiciliation is approved, companies must adhere to certain post-domiciliation obligations:
Transition Period
Companies have a 120-day period to complete the deregistration process in their original jurisdiction after re-domiciling to Hong Kong.
Filing Requirements
- Return of particulars of members (Form NSC21): Companies are required to file member details with the Companies Registry.
- Consent to be a director (Form NNC3RD): Companies must file consent forms from their directors.
- Registration of charges: Any charges or debentures must be registered with the Companies Registry.
6. Regulatory and Tax Implications
Re-domiciled companies must be aware of the regulatory and tax implications that come with the transfer of their domicile to Hong Kong.
Regulatory Oversight
Certain industries, such as insurance and banking, require special regulatory approval from Hong Kong’s financial regulators before re-domiciling. Companies in these sectors must engage with the appropriate regulatory bodies to ensure compliance.
Tax Considerations
- Tax Credits: Companies that have paid taxes in their original jurisdiction may be eligible for unilateral tax credits to avoid double taxation.
- No Stamp Duty: Hong Kong does not levy stamp duty on the re-domiciliation process, which makes the move more affordable.
- Hong Kong Profits Tax: Re-domiciled companies are subject to Hong Kong’s favorable profits tax regime, which provides substantial tax advantages.
7. Strategic Benefits of Re-domiciliation
Re-domiciliation offers numerous strategic advantages to global businesses, including:
- Legal Identity Preservation: There is no need to establish a new legal entity, which helps the company preserve its history, contracts, and business relationships.
- Operational Continuity: The transition is seamless, with minimal disruption to the company’s daily operations.
- Regulatory Advantages: Hong Kong’s strong regulatory framework provides an attractive environment for companies looking for legal stability and protection.
8. Comparative Analysis
When compared to other jurisdictions, Hong Kong’s re-domiciliation regime stands out due to its efficiency and favorable legal environment. For instance, Singapore, the Cayman Islands, and Bermuda have long allowed re-domiciliation, but Hong Kong offers certain advantages such as:
- No economic substance requirements, which are often a burden in other jurisdictions.
- A comprehensive application process that integrates re-domiciliation with business registration.
9. Case Studies and Industry Applications
While the regime is still new, several sectors stand to benefit significantly. For example:
- Technology and FinTech: Companies looking to expand into the Asia-Pacific market can use re-domiciliation to base their operations in Hong Kong, a global hub for innovation and finance.
- Finance and Investment: Financial institutions looking to be closer to China’s massive investment market will find Hong Kong’s legal system and tax regime attractive.
10. Future Outlook
The introduction of the re-domiciliation regime places Hong Kong at the forefront of international business hubs. Over the next few years, as more companies take advantage of the regime, it is likely that the government will continue to refine and enhance the process based on feedback from the business community.
As the business landscape evolves, Hong Kong’s position as a global financial hub will continue to strengthen, making it an even more appealing location for international businesses seeking growth and opportunity.
Conclusion
The introduction of Hong Kong’s company re-domiciliation regime represents a pivotal opportunity for international businesses. By allowing companies to move their legal domicile to Hong Kong without losing operational continuity, Hong Kong has cemented its status as a leading destination for global business. For companies seeking to expand in Asia or streamline their operations in a world-class jurisdiction, re-domiciliation to Hong Kong offers substantial strategic, legal, and financial benefits.