As Hong Kong continues to strengthen its position as a global business hub, the introduction of a streamlined system for business identification becomes increasingly important. On December 27, 2023, the Hong Kong Companies Registry introduced the Unique Business Identifier (UBI) system, an initiative designed to simplify and enhance the efficiency of business registration and regulatory processes. The UBI system consolidates the Business Registration Number (BRN) and the Company Registration Number (CRN) into a single identifier. This change has significant implications for businesses in Hong Kong, helping improve transparency, ease of operation, and regulatory compliance.
What is the Unique Business Identifier (UBI) System?
The Unique Business Identifier (UBI) system, introduced by the Hong Kong Companies Registry, is a new way to identify businesses. It aims to combine the old Business Registration Number (BRN) and Company Registration Number (CRN) into one single identifier. This system was officially rolled out on December 27, 2023, to simplify the business registration process and improve efficiency in how businesses interact with government agencies, financial institutions, and other regulatory bodies.
Previously, businesses in Hong Kong were required to obtain two separate identification numbers: the BRN, issued by the Inland Revenue Department (IRD) for tax purposes, and the CRN, issued by the Companies Registry for incorporated entities. These two numbers served different functions, but there was often confusion about their roles, especially for business owners operating in both the tax and corporate sectors. By adopting the BRN as the UBI for all entities, the Hong Kong government has made it easier for businesses to comply with regulations, file taxes, and ensure their legal standing without needing to juggle multiple identifiers.
The UBI system reduces administrative complexity and ensures consistency across government departments. From a practical standpoint, businesses will only need to use their BRN (now acting as the UBI) for all dealings with government agencies, including filing tax returns, registering with the Companies Registry, and fulfilling other legal requirements.
What is the Business Registration Number (BRN)?
The Business Registration Number (BRN) has long been a fundamental element of business operations in Hong Kong. Issued by the Inland Revenue Department (IRD), the BRN serves as a tax identification number for businesses. It is a unique identifier assigned to every entity, whether a sole proprietorship, partnership, or limited company, that registers for tax purposes in Hong Kong.
Once a business has obtained its Business Registration Certificate (BRC) from the IRD, it is assigned a BRN. This number is used in all tax filings, such as corporate income tax returns, business registration renewals, and any communications with the IRD. Essentially, the BRN allows the government to track and regulate a business’s tax activities, ensuring that businesses pay the correct amount of taxes and maintain transparent financial records.
Before the introduction of the UBI system, businesses in Hong Kong were required to use the BRN for all tax-related matters and the CRN for legal identification and corporate governance purposes.
What is the Company Registration Number (CRN)?
The Company Registration Number (CRN) is another important identifier for businesses, specifically those that are incorporated as legal entities in Hong Kong. It is assigned to limited companies and other incorporated entities as part of the registration process under the Companies Ordinance.
The CRN is mainly utilized for legal reasons, such as corporate filings, governance of companies, and adherence to the Companies Ordinance. Every incorporated company in Hong Kong must have a CRN, and it must be used in all official documents filed with the Companies Registry.
One key difference between the CRN and the BRN is that the CRN is a public record, accessible through the Companies Registry. This allows anyone to verify the legal status of a company and its registration details. In contrast, the BRN is more private and is mainly used for tax purposes, with its details not typically available for public scrutiny.
The Shift from BRN and CRN to the UBI Framework
With the launch of the UBI system in December 2023, the BRN now serves as the official Unique Business Identifier for all businesses in Hong Kong, whether they are tax-paying sole proprietorships, partnerships, or incorporated companies. The primary goal of this transition is to simplify business identification and create a more unified regulatory system. Under the new system, businesses no longer need to use both the BRN and CRN; instead, the BRN will be used for all purposes, including both tax compliance and corporate governance.
For existing companies, moving to the UBI system doesn’t need major changes. Companies that already have a BRN will continue to use it as their UBI from now on. New companies will receive the BRN/UBI when they register with the IRD. This change also lets businesses use one unified identifier when submitting documents to the Companies Registry or the IRD, which makes the process smoother and helps avoid mistakes.
The Benefits of the UBI System
By using a single identifier across all business transactions and regulatory activities, the UBI system reduces the risk of errors and misunderstandings. Businesses will no longer need to navigate between multiple systems to update information, file taxes, or submit corporate documents. This streamlining is particularly beneficial for small and medium-sized enterprises (SMEs), which may lack the resources to manage complex regulatory frameworks.
By adopting the Business Registration Number (BRN) as the UBI, Hong Kong has eliminated the need for separate identifiers for tax and corporate purposes, providing businesses with a single, unified system for all regulatory matters. The UBI system improves efficiency, reduces errors, and enhances compliance, offering a more transparent and accessible business environment.